10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2017

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 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, Ohio	44406
(Address of principal executive offices)	(Zip Code)

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

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

Title of each class	Name of each exchange on which registered
Common Shares, no par value	The NASDAQ Stock Market LLC

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

None

(Title of Class)

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

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

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  ☒    No  ☐

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

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

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

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐	(Do not check if a smaller reporting company)
Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐ 

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

As of June 30, 2017, the estimated aggregate market value of the registrant’s common shares, no par value (the only common equity of the registrant), held by non-affiliates of the registrant was approximately $392.5 million based upon the last sales price as of June 30, 2017 reported on NASDAQ.  (The exclusion from such amount of the market value of the common shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant).

As of March 1, 2018, the registrant had outstanding 27,554,207 common shares, no par value.

DOCUMENTS INCORPORATED BY REFERENCE

Document	Part of Form 10-K into which Document is Incorporated
Portions of the registrant’s definitive proxy statement for the 2018	III
Annual Meeting of Shareholders

FARMERS NATIONAL BANC CORP.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

TABLE OF CONTENTS

	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosures	23
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	Selected Financial Data	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	45
Item 8.	Financial Statements and Supplementary Financial Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	106
Item 9A.	Controls and Procedures	106
Item 9B.	Other Information	106
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	107
Item 11.	Executive Compensation	109
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	109
Item 13.	Certain Relationships and Related Transactions, and Director Independence	110
Item 14.	Principal Accountant Fees and Services	110
	PART IV
Item 15.	Exhibits, Financial Statement Schedules.	110
Item 16.	Form 10-K Summary	110
SIGNATURES		114

PART I

Item 1. Business.

General

Farmers National Banc Corp.

Farmers National Banc Corp. (the “Company,” “Farmers,” “we,” “our” or “us”), is a financial holding company and was organized as a one-bank holding company in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”).  Amendments to the BHCA in 1999, allowed for a bank holding company to declare itself a financial holding company and thereby engage in financial activities, including securities underwriting and dealing, insurance agency and underwriting activities, and merchant banking activities.  The Company made the declaration to become a financial holding company in 2016.  For a bank holding company to be eligible to declare itself a financial holding company, all of the depository institution subsidiaries must be well-capitalized and well-managed and have satisfactory or better ratings under the Community Reinvestment Act.  The Company operates principally through its wholly-owned subsidiaries, The Farmers National Bank of Canfield (the “Bank” or “Farmers Bank”), Farmers Trust Company (“Trust” or “Farmers Trust”), National Associates, Inc. (“NAI”) and Farmers National Captive, Inc. (“Captive”).  Farmers National Insurance, LLC (“Insurance” or “Farmers Insurance”) and Farmers of Canfield Investment Co. (“Investments or “Farmers Investments”) are wholly-owned subsidiaries of the Bank.  The Company and its subsidiaries operate in the domestic banking, trust, retirement consulting, insurance and financial management industries.

The Company’s principal business consists of owning and supervising its subsidiaries.  Although Farmers directs the overall policies of its subsidiaries, including lending practices and financial resources, most day-to-day affairs are managed by their respective officers.  Farmers and its subsidiaries had 445 full-time equivalent employees at December 31, 2017.

The Company’s principal executive offices are located at 20 South Broad Street, Canfield, Ohio 44406, and its telephone number is (330) 533-3341.  Farmers’ common shares, no par value, are listed on the NASDAQ Capital Market (the “NASDAQ”) under the symbol “FMNB.”  Farmers’ business activities are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank segment, the Trust segment and the Retirement Planning/Consulting segment.  For a discussion of Farmers’ financial performance for the fiscal year ended December 31, 2017, see the Consolidated Financial Statements and Notes to the Consolidated Financial Statements found in Item 8 of this Annual Report on Form 10-K.

The Farmers National Bank of Canfield

During 2017, the Company acquired all outstanding stock of Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank.  Additional discussion about the acquisition can be found in the Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.  The Bank is a full-service national banking association engaged in commercial and retail banking mainly in Mahoning, Trumbull, Columbiana, Wayne, Holmes, Medina and Stark Counties in Ohio and two locations in Beaver County, Pennsylvania.  The Bank’s commercial and retail banking services include checking accounts, savings accounts, time deposit accounts, commercial, mortgage and installment loans, home equity loans, home equity lines of credit, night depository, safe deposit boxes, money orders, bank checks, automated teller machines, internet banking, travel cards, “E” Bond transactions, MasterCard and Visa credit cards, brokerage services and other miscellaneous services normally offered by commercial banks.

A discussion of the general development of the Bank’s business and information regarding its financial performance throughout 2017, is discussed in Item 7, Management Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K.

The Bank faces significant competition in offering financial services to customers.  Ohio has a high density of financial service providers, many of which are significantly larger institutions that have greater financial resources than the Bank, and all of which are competitors to varying degrees.  Competition for loans comes principally from savings banks, savings and loan associations, commercial banks, mortgage banking companies, credit unions, insurance companies and other financial service companies.  The most direct competition for deposits has

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historically come from savings and loan associations, savings banks, commercial banks and credit unions.  Additional competition for deposits comes from non-depository competitors such as the mutual fund industry, securities and brokerage firms and insurance companies.

Farmers Trust Company

During 2009, the Company acquired the Farmers Trust Company which offers a full complement of personal and corporate trust services in the areas of estate settlement, trust administration and employee benefit plans.  Farmers Trust operates four offices located in Boardman, Canton, Howland and Wooster, Ohio.

National Associates, Inc.

National Associates, Inc. of Cleveland, Ohio has been a part of the Company since the 2013 acquisition.  The acquisition was part of the Company’s plan to increase the levels of noninterest income and to complement the existing retirement services that were already being offered through the Trust company.  NAI operates from its office located in Fairview Park, Ohio

Farmers National Captive, Inc.

Farmers National Captive, Inc. was formed during 2016 and is a wholly-owned insurance subsidiary of the Company that provides property and casualty insurance coverage to the Company and its subsidiaries.  The Captive pools resources with thirteen other similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not currently available or economically feasible in today’s insurance market place.  The Captive does not account for a material portion of the revenue and, therefore, will not be discussed individually, but as part of the Company.

Farmers National Insurance, LLC

Farmers Insurance was formed during 2009 and offers a variety of insurance products through licensed representatives.  During 2016 the Bank completed the acquisition of the Bowers Insurance Agency, Inc. (“Bowers”).  The transaction involved both cash and stock.  All activity has been merged into Insurance.  Farmers Insurance is a subsidiary of Farmers Bank and does not account for a material portion of the revenue and, therefore, will not be discussed individually, but as part of the Bank.

Farmers of Canfield Investment Company

Farmers of Canfield Investment Company was formed during 2014, with the primary purpose of investing in municipal securities.  Farmers Investments is a subsidiary of Farmers Bank and does not account for a material portion of the revenue and, therefore, will not be discussed individually, but as part of the Bank.

Investor Relations

The Company maintains an Internet site at http://www.farmersbankgroup.com, which contains an Investor Relations section that provides access to the Company’s filings with the Securities and Exchange Commission (the “Commission”).  Farmers makes available free of charge on or through its website the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such documents filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after the Company has filed these documents with the Commission.  In addition, the Company’s filings with the Commission may be read and copied at the Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.  These filings are also available on the Commission’s web-site at http://www.sec.gov free of charge as soon as reasonably practicable after the Company has filed the above referenced reports.

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Supervision and Regulation

Introduction

The Company and its subsidiaries are subject to extensive regulation by federal and state regulatory agencies.  The regulation of financial holding companies and their subsidiaries is intended primarily for the protection of consumers, depositors, borrowers, the Deposit Insurance Fund and the banking system as a whole and not for the protection of shareholders.  This intensive regulatory environment, among other things, may restrict the Company’s ability to diversify into certain areas of financial services, acquire depository institutions in certain markets or pay dividends on its common shares.  It also may require the Company to provide financial support to its banking and other subsidiaries, maintain capital balances in excess of those desired by management and pay higher deposit insurance premiums as a result of the deterioration in the financial condition of depository institutions in general.

Significant aspects of the laws and regulations that have, or could have a material impact on Farmers and its subsidiaries are described below.  These descriptions are qualified in their entirety by reference to the full text of the applicable statutes, legislation, regulations and policies, as they may be amended or revised by the U.S. Congress or state legislatures and federal or state regulatory agencies, as the case may be.  Changes in these statutes, legislation, regulations and policies may have a material adverse effect on the Company and its business, financial condition or results of operations.

Regulatory Agencies

Financial Holding Company.  Farmers elected to be a financial holding company.  A bank holding company may elect to become a financial holding company if each of its subsidiary banks is well capitalized under the prompt corrective action regulations of the FDIC, is well managed, and has at least a satisfactory rating under the Community Reinvestment Act of 1977 (the "CRA").  Financial holding companies may engage in activities that are financial in nature, including affiliating with securities firms and insurance companies, which are not otherwise permissible for a bank holding company.

As a financial holding company, Farmers is subject to regulation under the BHCA and to inspection, examination and supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).  The Federal Reserve Board has extensive enforcement authority over financial and bank holding companies and may initiate enforcement actions for violations of laws and regulations and unsafe or unsound practices.  The Federal Reserve Board may assess civil money penalties, issue cease and desist or removal orders and may require that a bank holding company divest subsidiaries, including subsidiary banks.  Farmers is also required to file reports and other information with the Federal Reserve Board regarding its business operations and those of its subsidiaries.

Subsidiary Bank. The Bank is subject to regulation and examination primarily by the Office of the Comptroller of the Currency (the “OCC”) and secondarily by the Federal Deposit Insurance Corporation (the “FDIC”).  OCC regulations govern permissible activities, capital requirements, dividend limitations, investments, loans and other matters.  The OCC has extensive enforcement authority over Farmers Bank and may impose sanctions on Farmers Bank and, under certain circumstances, may place Farmers Bank into receivership.

Farmers Bank is also subject to certain restrictions imposed by the Federal Reserve Act and Federal Reserve Board regulations regarding such matters as the maintenance of reserves against deposits, extensions of credit to Farmers or any of its subsidiaries, investments in the stock or other securities of Farmers or its subsidiaries and the taking of such stock or securities as collateral for loans to any borrower.

Non-Banking Subsidiaries. Farmers’ non-banking subsidiaries are also subject to regulation by the Federal Reserve Board and other applicable federal and state agencies.  In particular, Farmers National Insurance is subject to regulation by the Ohio Department of Insurance, which requires, amongst other things, the education and licensing of agencies and individual agents and imposes business conduct rules.

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Securities and Exchange Commission and The NASDAQ Stock Market LLC. The Company is also under the regulation and supervision of the Commission and certain state securities commissions for matters relating to the offering and sale of its securities.  The Company is subject to disclosure and regulatory requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act, and the regulations promulgated thereunder.  Farmers common shares are listed on the NASDAQ under the symbol “FMNB” and the Company is subject to the rules for NASDAQ listed companies.

Federal Home Loan Bank. Farmers Bank is a member of the Federal Home Loan Bank of Cincinnati (the “FHLB”), which provides credit to its members in the form of advances.  As a member of the FHLB, the Bank must maintain an investment in the capital stock of the FHLB in a specified amount.  Upon the origination or renewal of a loan or advance, the FHLB is required by law to obtain and maintain a security interest in certain types of collateral.  The FHLB is required to establish standards of community investment or service that its members must maintain for continued access to long-term advances from the FHLB.  The standards take into account a member’s performance under the CRA and its record of lending to first-time home buyers.

The Federal Deposit Insurance Corporation. The FDIC is an independent federal agency that insures the deposits, up to prescribed statutory limits, of federally-insured banks and savings associations and safeguards the safety and soundness of the financial institution industry.  The Bank’s deposits are insured up to applicable limits by the Deposit Insurance Fund of the FDIC and subject to deposit insurance assessments to maintain the Deposit Insurance Fund.

The FDIC may terminate insurance coverage upon a finding that an insured depository institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the institution’s regulatory agency.

Dodd-Frank Act - Basel III

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, became 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.

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.

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• 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.

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.

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.

Financial Holding Company Regulation

As a financial holding company, Farmers’ activities are subject to extensive regulation by the Federal Reserve Board under the BHCA.  Generally, in addition to the BHCA limits of banking, managing or controlling banks and other activities that the Federal Reserve Board has determined to be closely related to banking, financial holding company activities may include securities underwriting and dealing, insurance agency and underwriting activities and merchant banking activities.  Under Federal Reserve Board policy, a financial holding company is expected to serve as a source of financial and managerial strength to each subsidiary and to commit resources to support those subsidiaries.  Under this policy, the Federal Reserve Board may require the company to contribute additional capital to an undercapitalized subsidiary and may disapprove of the payment of dividends to the holding company’s shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice.  The Dodd-Frank Act codified this policy as a statutory requirement.

The BHCA requires prior approval by the Federal Reserve Board for a bank holding company to directly or indirectly acquire more than a 5.0% voting interest in any bank or its parent holding company.  Factors taken into consideration in making such a determination include the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post-acquisition basis and the acquiring institution’s record of addressing the credit needs of the communities it serves.

The BHCA also governs interstate banking and restricts Farmers’ nonbanking activities to those determined by the Federal Reserve Board to be financial in nature, or incidental or complementary to such financial activity, without regard to territorial restrictions.  Transactions among the Bank and its affiliates are also subject to certain limitations and restrictions of the Federal Reserve Board, as described more fully under the caption “Dividends and Transactions with Affiliates” in this Item 1.

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The Gramm-Leach-Bliley Act of 1999 permits a qualifying bank holding company to elect to become a financial holding company and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature and not otherwise permissible for a bank holding company.  Farmers elected to become a financial holding company during 2016.

Regulation of Nationally-Chartered Banks

As a national banking association, Farmers Bank is subject to regulation under the National Banking Act and is periodically examined by the OCC.  OCC regulations govern permissible activities, capital requirements, dividend limitations, investments, loans and other matters.  Furthermore, Farmers Bank is subject, as a member bank, to certain rules and regulations of the Federal Reserve Board, many of which restrict activities and prescribe documentation to protect consumers.  Under the Bank Merger Act, the prior approval of the OCC is required for a national bank to merge with, or purchase the assets or assume the deposits of, another bank.  In reviewing applications to approve merger and other acquisition transactions, the OCC and other bank regulatory authorities may include among their considerations the competitive effect and public benefits of the transactions, the capital position of the combined organization, the applicant’s performance under the CRA and fair housing laws, and the effectiveness of the entities in restricting money laundering activities. In addition, the establishment of branches by Farmers Bank is subject to the prior approval of the OCC.  The OCC has the authority to impose sanctions on the Bank and, under certain circumstances, may place Farmers Bank into receivership.

The Bank is also an insured institution as a member of the Deposit Insurance Fund.  As a result, it is subject to regulation and deposit insurance assessments by the FDIC.

Dividends and Transactions with Affiliates

The Company is a legal entity separate and distinct from the Bank and its other subsidiaries.  The Company’s principal source of funds to pay dividends on its common shares and service its debt is dividends from Farmers Bank and its other subsidiaries.  Various federal and state statutory provisions and regulations limit the amount of dividends that Farmers Bank may pay to Farmers without regulatory approval.  Farmers Bank generally may not, without prior regulatory approval, pay a dividend in an amount greater than its undivided profits after deducting statutory bad debt in excess of the Bank’s allowance for loan losses.  In addition, prior approval of the OCC is required for the payment of a dividend if the total of all dividends declared in a calendar year would exceed the total of Farmers Bank’s net income for the year combined with its retained net income for the two preceding years.

In addition, Farmers and Farmers Bank are subject to other regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.  The federal banking agencies are authorized to determine under certain circumstances that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof.  The federal banking agencies have stated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsafe and unsound banking practice and that banking organizations should generally pay dividends only out of current operating earnings.  In addition, in the current financial and economic environment, the Federal Reserve Board has indicated that financial holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels, unless both asset quality and capital are very strong.  Thus, the ability of Farmers to pay dividends in the future is currently influenced, and could be further influenced, by bank regulatory policies and capital guidelines.

The Bank is subject to restrictions under federal law that limit the transfer of funds or other items of value to the Company and its nonbanking subsidiaries and affiliates, whether in the form of loans and other extensions of credit, investments and asset purchases or other transactions involving the transfer of value from a subsidiary to an affiliate or for the benefit of an affiliate.  These regulations limit the types and amounts of transactions (including loans due and extensions of credit) that may take place and generally require those transactions to be on an arm’s-length basis.  In general, these regulations require that any “covered transaction” by Farmers Bank with an affiliate must be secured by designated amounts of specified collateral and must be limited, as to any one of Farmers or its non-bank subsidiaries, to 10% of Farmers Bank’s capital stock and surplus, and, as to Farmers and all such non-bank subsidiaries in the aggregate, to 20% of Farmers Bank’s capital stock and surplus.  The Dodd-Frank Act significantly expanded the coverage and scope of the limitations on affiliate transactions within a banking

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organization including, for example, the requirement that the 10% capital limit on covered transactions apply to financial subsidiaries.  “Covered transactions” are defined by statute to include a loan or extension of credit, as well as a purchase of securities issued by an affiliate, a purchase of assets (unless otherwise exempted by the Federal Reserve Board) from the affiliate, certain derivative transactions that create a credit exposure to an affiliate, the acceptance of securities issued by the affiliate as collateral for a loan and the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

Capital loans from the Company to the Bank are subordinate in right of payment to deposits and certain other indebtedness of the Bank.  In the event of Farmers’ bankruptcy, any commitment by Farmers to a federal bank regulatory agency to maintain the capital of Farmers Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

The Federal Deposit Insurance Act of 1950, as amended, provides that, in the event of the “liquidation or other resolution” of an insured depository institution such as the Bank, the insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, nondeposit creditors, including the Company, with respect to any extensions of credit they have made to such insured depository institution.

Capital Adequacy

Both Farmers and Farmers Bank are subject to risk-based capital requirements imposed by their respective primary federal banking regulator.  The Federal Reserve Bank monitors the capital adequacy of Farmers and the FDIC monitors the capital adequacy of Farmers Bank. The revised risk-based capital requirements applicable to bank holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”) became effective for the Company and the Bank on January 1, 2015.  The Basel III Rules require the maintenance of minimum amounts and ratios of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets, and of tier 1 capital to adjusted quarterly average assets.

Under the Basel III Rules, common equity tier 1 capital consists of common stock and paid-in capital (net of treasury stock) and retained earnings.  Common equity tier 1 capital is reduced by goodwill, certain intangible assets, net of associated deferred tax liabilities, deferred tax assets that arise from tax credit and net operating loss carryforwards, net of any valuation allowance, and certain other items as specified by the Basel III Rules.

Tier 1 capital includes common equity tier 1 capital and certain additional tier 1 items as provided under the Basel III Rules.

Basel III Rules allow for insured depository institutions to make a one-time election not to include most elements of accumulated other comprehensive income in regulatory capital and instead effectively use the existing treatment under the general risk-based capital rules.  The Company and Bank made this opt-out election in the first quarter of 2015 to avoid significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of our investment securities portfolio.

The Basel III Rules also changed the risk-weights of assets in an effort to better reflect credit risk and other risk exposures.  These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and the unsecured portion of non-residential mortgage loans that are 90 days past due or otherwise on nonaccrual status; a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable; a 250% risk weight (up from 100%) for mortgage servicing rights and deferred tax assets that are not deducted from capital; and increased risk weights (from 0% to up to 600%) for equity exposures.

The Basel III Rules limit capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements.  The capital conservation buffer began being phased in on January 1, 2016, at 0.625% of risk-weighted assets, increasing each year by that amount until fully implemented at 2.5% on January 1, 2019.  When

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fully phased in on January 1, 2019, the Basel III Rules will require the Company and Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% capital conservation buffer, which effectively results in a minimum ratio of 7.0% upon full implementation, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, plus a 2.5% capital conservation buffer, which effectively results in a minimum ratio of 8.50% upon full implementation, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus a 2.5% capital conservation buffer, which effectively results in a minimum ratio of 10.5% upon full implementation and (iv) a minimum leverage ratio of 4.0%.

Prior to January 1, 2015, federal regulatory agencies required the Company and Bank to maintain minimum tier 1 and total capital to risk-weighted assets of 4.0% and 8.0%, respectively, and tier 1 capital to average assets (tier 1 leverage ratio) of at least 4.0%. In order to be considered well capitalized under the rules in effect prior to January 1, 2015, the Company had to maintain tier 1 and total capital to risk-weighted assets of 6.0% and 10.0%, respectively, and a leverage ratio of 5.0%.  Tier 1 capital consisted of common equity, retained earnings, certain types of preferred stock, qualifying minority interest and trust preferred securities, subject to limitations, and excluded goodwill and various intangible assets.

When fully phased in on January 1, 2019, Basel III will require banks to maintain: (i) as a newly adopted international standard, a minimum ratio of Common Equity Tier 1 (“CET1”) to risk-weighted assets of 4.5%, plus a 2.5% capital conservation buffer (the “CCB”) (which is added to the 4.5% CET1 ratio as that buffer is phased in, which will effectively result in a minimum ratio of CET1 to risk-weighted assets of 7.0%); (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the CCB (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% on full implementation); (iii) a minimum ratio of Total (Tier 1 plus Tier 2) capital to risk-weighted assets of at least 8.0%, plus the CCB (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation); and (iv) as a newly adopted international standard, a minimum leverage ratio of 3.0%, calculated as the ratio of Tier 1 capital to balance sheet exposures plus certain off-balance sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter).

The Basel III final framework provides for a number of new deductions from and adjustments to CET1, including the deduction of mortgage servicing rights, deferred tax assets dependent upon future taxable income and significant investments in non-consolidated financial entities if any one such category exceeds 10.0% of CET1 or if all such categories in the aggregate exceed 15.0% of CET1.

The following is a summary of the other major changes from the current general risk-based capital rule:

• replacement of the external credit ratings approach to standards of creditworthiness with a simplified supervisory formula approach;

• stricter limitations on the extent to which mortgage servicing assets, deferred tax assets and significant investments in unconsolidated financial institutions may be included in common equity tier 1 capital and the risk weight to be assigned to any amounts of such assets not deducted; and    

• increased risk weights for past-due loans, certain commercial real estate loans and some equity exposures, and selected other changes in risk weights and credit conversion factors.

Notwithstanding its release of the Basel III framework as a final framework, the Basel Committee is considering further amendments to Basel III, including imposition of additional capital surcharges on globally systemically important financial institutions.  In addition to Basel III, the Dodd-Frank Act requires or permits federal banking agencies to adopt regulations affecting capital requirements in a number of respects, including potentially more stringent capital requirements for systemically important financial institutions.  Accordingly, the regulations ultimately applicable to the Company may differ substantially from the currently published final Basel III framework.  Requirements of higher capital levels or higher levels of liquid assets could adversely impact the Company’s net income and return on equity.

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Volcker Rule

In December 2013, five federal agencies adopted a final regulation implementing the Volcker Rule provision of the Dodd-Frank Act (the "Volcker Rule").  The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions.  The trading activity includes a purchase or sale as principal of a security, derivative, commodity future or option on any such instrument in order to benefit from short-term price movements or to realize short-term profits.  The Volcker Rule exempts specified U.S. Government, agency and/or municipal obligations, and it exempts trading conducted in certain capacities, including as a broker or other agent, through a deferred compensation or pension plan, as a fiduciary on behalf of customers, to satisfy a debt previously contracted, repurchase and securities lending agreements and risk-mitigating hedging activities.  

The Volcker Rule also prohibits a banking entity from having an ownership interest in, or certain relationships with, a hedge fund or private equity fund, with a number of exceptions.

The Bank does not engage in any of the trading activities or own any of the types of funds prohibited by the Volcker Rule.

Prompt Corrective Action

The federal banking agencies have established a system of prompt corrective action to resolve certain of the problems of undercapitalized institutions.  This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.”

The federal banking agencies may (or in some cases must) take certain supervisory actions depending upon a bank’s capital level.  For example, the banking agencies must appoint a receiver or conservator for a bank within 90 days after it becomes “critically undercapitalized” unless the bank’s primary regulator determines, with the concurrence of the FDIC, that other action would better achieve regulatory purposes.  Banking operations otherwise may be significantly affected depending on a bank’s capital category.  For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable.

Federal law permits the OCC to order the pro rata assessment of shareholders of a national bank whose capital stock has become impaired, by losses or otherwise, to relieve a deficiency in such national bank’s capital stock.  This statute also provides for the enforcement of any such pro rata assessment of shareholders of such national bank to cover such impairment of capital stock by sale, to the extent necessary, of the capital stock owned by any assessed shareholder failing to pay the assessment.  As the sole shareholder of Farmers Bank, the Company is subject to such provisions.

Deposit Insurance

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

The FDIC assesses a quarterly deposit insurance premiums on each insured institution based on risk characteristics of the institution and may also impose special assessments in emergency situations.  The premiums fund the Deposit Insurance Fund ("DIF").  Pursuant to the Dodd-Frank Act, the FDIC has established 2.0% as the designated reserve ratio ("DRR"), which is the amount in the DIF as a percentage of all DIF insured deposits.  In

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March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35% by September 30, 2010, the deadline imposed by the Dodd-Frank Act.  The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.  Although the FDIC's new rules reduced assessment rates on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reaches 1.35%.  The rules also provide assessment credits to banks with assets of less than $1 billion for the portion of their assessments that contribute to the increase of the DRR to 1.35%.  The rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk.  

In addition, all FDIC-insured institutions are required to pay assessments to fund interest payments on bonds issued by the Financing Corporation, which was established by the government to recapitalize a predecessor to the DIF.  These assessments will continue until the Financing Corporation bonds mature in 2019.

As insurer, the FDIC is authorized to conduct examinations of and to require reporting by federally-insured institutions.  It also may prohibit any federally-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the Deposit Insurance Fund.  The FDIC also has the authority to take enforcement actions against insured institutions.  Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC or written agreement entered into with the FDIC.  The management of the Bank does not know of any practice, condition or violation that might lead to termination of deposit insurance.

Fiscal and Monetary Policies

The Company’s business and earnings are affected significantly by the fiscal and monetary policies of the federal government and its agencies.  The Company is particularly affected by the policies of the Federal Reserve Board, which regulates the supply of money and credit in the United States in order to influence general economic conditions, primarily through open market operations in U.S. government securities, changes in the discount rate on bank borrowings and changes in the reserve requirements against depository institutions’ deposits.  These policies and regulations significantly affect the overall growth and distribution of loans, investments and deposits, as well as interest rates charged on loans and paid on deposits.

The monetary policies of the Federal Reserve board have had a significant effect on operations and results of financial institutions in the past and are expected to have significant effects in the future.  In view of the changing conditions in the economy, the money markets and activities of monetary and fiscal authorities, Farmers can make no predictions as to future changes in interest rates, credit availability or deposit levels.

Community Reinvestment Act

The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.  Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low and moderate-income individuals and communities.  Depository institutions are periodically examined for compliance with the CRA and are assigned ratings.  In order for a bank holding company to commence any new activity permitted by the BHCA, or to acquire any company engaged in any new activity permitted by the BHCA, each insured depository institution subsidiary of the bank holding company must have received a rating of at least “satisfactory” in its most recent examination under the CRA.  Furthermore, banking regulators take into account CRA ratings when considering approval of a proposed transaction.  Farmers received a rating of “satisfactory” in its most recent CRA examination.

Customer Privacy

Farmers Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers to nonaffiliated third parties.  These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow customers to prevent disclosure of certain personal information to a nonaffiliated third party.  These regulations affect how consumer information is transmitted and conveyed to outside vendors.

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Anti-Money Laundering and the USA Patriot Act

The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”) and its related regulations require insured depository institutions, broker-dealers and certain other financial institutions to have policies, procedures and controls to detect, prevent, and report money laundering and terrorist financing.  The USA Patriot Act and its regulations also provide for information sharing, subject to conditions, between federal law enforcement agencies and financial institutions, as well as among financial institutions, for counter-terrorism purposes.  Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution.  In addition, federal banking agencies are required, when reviewing bank holding company acquisition and bank merger applications, to take into account the effectiveness of the anti-money laundering policies, procedures and controls of the applicants.

Corporate Governance

The Sarbanes-Oxley Act of 2002 effected broad reforms to areas of corporate governance and financial reporting for public companies under the jurisdiction of the Commission.  The Company’s corporate governance policies include an Audit Committee Charter, a Compensation Committee Charter, Corporate Governance and Nominating Committee Charter and Code of Business Conduct and Ethics.  The Board of Directors reviews the Company’s corporate governance practices on a continuing basis.  These and other corporate governance policies have been provided previously to shareholders and are available, along with other information on Farmers’ corporate governance practices, on the Company’s website at www.farmersbankgroup.com.

As directed by Section 302(a) of the Sarbanes-Oxley Act, the Company’s chief executive officer and chief financial officer are each required to certify that the Company’s Quarterly and Annual Reports do not contain any untrue statement of a material fact. The rules have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of the Company’s internal controls, they have made certain disclosures about the Company’s internal controls to its auditors and the audit committee of the Board of Directors and they have included information in the Company’s Quarterly and Annual Reports about their evaluation and whether there have been significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the evaluation.

Executive and Incentive Compensation

In June 2010, the Federal Reserve Board, OCC and FDIC issued joint interagency guidance on incentive compensation policies (the “Joint Guidance”) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.  This principles-based guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should: (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks; (ii) be compatible with effective internal controls and risk management; and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.

Pursuant to the Joint Guidance, the Federal Reserve Board will review as part of a regular, risk-focused examination process, the incentive compensation arrangements of financial institutions such as Farmers.  Such reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.  The findings of the supervisory initiatives will be included in reports of examination and deficiencies will be incorporated into the institution’s supervisory ratings, which can affect the institution’s ability to make acquisitions and take other actions.  Enforcement actions may be taken against an institution if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness, and prompt and effective measures are not being taken to correct the deficiencies.

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On February 7, 2011, the federal banking agencies initially issued jointly proposed rules on incentive-based compensation arrangements under applicable provisions of the Dodd-Frank Act (the “First Proposed Rules”).  The First Proposed Rules generally apply to financial institutions with $1.0 billion or more in assets that maintain incentive-based compensation arrangements for certain covered employees.  

In May 2016, the federal bank regulatory agencies issued a second joint notice of proposed rules (the “Second Proposed Joint Rules”) likewise designed to prohibit incentive-based compensation arrangements that encourage inappropriate risks at financial institutions.  The Second Proposed Joint Rules would also apply to covered financial institutions with total assets of $1 billion or more, but the rules would differ for each of three categories of financial institutions:

• Level 1 – institutions with assets of $250 billion or more;

• Level 2 – institutions with assets of at least $50 billion and less than $250 billion; and

• Level 3 – institutions with assets of at least $1 billion and less than $50 billion.

Farmers would be a Level 3 institution. Some of the requirements would apply only to Level 1 and Level 2 institutions.  For all covered institutions, including Level 3 institutions, the proposed rules would:

• prohibit incentive-based compensation arrangements that are “excessive” or “could lead to material financial loss;”

• require incentive based compensation that is consistent with a balance of risk and reward, effective management and control of risk, and effective governance; and

• require board oversight, recordkeeping and disclosure to the appropriate regulatory agency.  

Public companies will also be required, once stock exchanges impose additional listing requirements under the Dodd-Frank Act, to implement “clawback” procedures for incentive compensation payments and to disclose the details of the procedures which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating a restatement due to material noncompliance with financial reporting requirements.  This clawback policy is intended to apply to compensation paid within a three year look-back window of the restatement and would cover all executives who received incentive awards.

The Dodd-Frank Act also provides shareholders the opportunity to cast a non-binding vote on executive compensation practices, imposes new executive compensation disclosure requirements, and contains additional considerations of the independence of compensation advisors.

Future Legislation

Various and significant legislation affecting financial institutions and the financial industry is from time to time introduced in the U.S. Congress and state legislatures, as well as by regulatory agencies.  Such initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution regulatory system.  Such legislation could change the operating environment for Farmers and its subsidiaries in substantial and unpredictable ways, and could significantly increase or decrease the costs of doing business, limit or expand permissible activities or affect the competitive balance among financial institutions.  With the enactment of the Dodd-Frank Act and the continuing implementation of final rules and regulations thereunder, the nature and extent of future legislative and regulatory changes affecting financial institutions remains very unpredictable.  Farmers cannot predict the scope and timing of any such future legislation and, if enacted, the effect that it could have on its business, financial condition or results of operations.

Summary

To the extent that the foregoing information describes statutory and regulatory provisions applicable to the Company or its subsidiaries, it is qualified in its entirety by reference to the full text of those provisions or agreements.  Also, such statutes, regulations and policies are continually under review by the U.S. Congress and state legislatures as well as federal and state regulatory agencies and are subject to change at any time, particularly

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in the current economic and regulatory environment.  Any such change in applicable statutes, regulations or regulatory policies could have a material effect on Farmers and its business, financial condition or results of operations.

Item 1A. Risk Factors.

The following are certain risk factors that could materially and negatively affect our business, results of operations, cash flows or financial condition.  These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K because these factors could cause our actual results or financial condition to differ materially from those projected in forward-looking statements.  The risks that are discussed below are not the only ones we face.  If any of the following risks occur, our business, financial condition or results of operations could be negatively affected.  Additional risks that are not presently known or that we presently deem to be immaterial could also have a material, adverse impact on our business, financial condition or results of operations.

Risks Relating to Economic and Market Conditions

Changes in economic, political, and market conditions may adversely affect our industry and our business.

Our success depends in part on national and local economic, political, and market conditions as well as governmental monetary and other financial policies.  Conditions such as inflation, recession, unemployment, changes in interest rates, money supply, governmental fiscal policies and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings.  Because we have a significant amount of real estate loans, additional decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.  Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings.  If during a period of reduced real estate values we are required to liquidate the collateral securing loans to satisfy the debt or to increase our allowance for loan losses, it could materially reduce our profitability and adversely affect our financial condition.  Moreover, the Financial Accounting Standards Board may change its requirements for establishing the loan loss allowance.  The majority of our loans are to individuals and businesses in Northeast Ohio.  Consequently, further significant declines in the economy in the area could have a material adverse effect on our business, financial condition or results of operations.  It is uncertain when the negative credit trends in our market will reverse, and, therefore, future earnings are susceptible to further declining credit conditions in the market in which we operate.

Changes in interest rates could adversely affect our income and financial condition.

Our earnings and cash flow are dependent upon our net interest income.  Net interest income is the difference between the interest income generated by our interest-earning assets (consisting primarily of loans and, to a lesser extent, securities) and the interest expense generated by our interest-bearing liabilities (consisting primarily of deposits and wholesale borrowings).  Our level of net interest income is primarily a function of the average balance of our interest-earning assets, the average balance of our interest-bearing liabilities and the spread between the yield on such assets and the cost of such liabilities.  These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by external factors, such as the local economy, competition for loans and deposits, the monetary policy of the Federal Reserve Board and market interest rates.

Interest rates are beyond our control, and they fluctuate in response to general economic conditions and the policies of various governmental and regulatory agencies, in particular, the Federal Reserve Board.  Changes in monetary policy, including changes in interest rates, will influence the origination of loans, the purchase of investments, the generation of deposits and the rates received on loans and investment securities and paid on deposits.  While we have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will be effective in avoiding undue interest rate risk.  See additional interest rate risk discussion under the Market Risk section found in Item 7A of this Annual Report on Form 10-K.

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Defaults by another larger financial institution could adversely affect financial markets generally.

The commercial soundness of many financial institutions may be closely interrelated as a result of credit, trading, clearing or other relationships between institutions.  As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions.  This is sometimes referred to as “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which we and our subsidiaries interact on a daily basis, and therefore could adversely affect our business, financial condition or results of operations.

Risks Related to Our Business

We extend credit to a variety of customers based on internally set standards and judgment.  We manage credit risk through a program of underwriting standards, the review of certain credit decisions and an on-going process of assessment of the quality of credit already extended.  Our credit standards and on-going process of credit assessment might not protect us from significant credit losses.

We take credit risk by virtue of making loans, extending loan commitments and letters of credit and, to a lesser degree, purchasing non-governmental securities.  Our exposure to credit risk is managed through the use of consistent underwriting standards that emphasize “in-market” lending, while avoiding highly leveraged transactions as well as excessive industry and other concentrations.  Our credit administration function employs risk management techniques to ensure that loans adhere to corporate policy and problem loans are promptly identified.  While these procedures are designed to provide us with the information needed to implement policy adjustments where necessary, and to take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk.

We have significant exposure to risks associated with commercial real estate and residential real estate in our primary markets.

As of December 31, 2017, approximately 62.2% of our loan portfolio consisted of commercial real estate and residential real estate loans, including real estate development, construction and residential and commercial mortgage loans.  Consequently, real estate-related credit risks are a significant concern for us.  The adverse consequences from real estate-related credit risks tend to be cyclical and are often driven by national economic developments that are not controllable or entirely foreseeable by us or our borrowers.  General difficulties in our real estate markets have recently contributed to increases in our non-performing loans, charge-offs and decreases in our income.

Our business depends significantly on general economic conditions in Ohio.  Accordingly, the ability of our borrowers to repay their loans, and the value of the collateral securing such loans, may be significantly affected by economic conditions in the regions we serve or by changes in the local real estate markets.  A significant decline in general economic conditions caused by inflation, recession, unemployment, acts of terrorism or other factors beyond our control could have an adverse effect on our business, financial condition or results of operations.

Our indirect lending exposes us to increased credit risks.

A portion of our current lending involves the purchase of consumer automobile installment sales contracts from automobile dealers located in Northeastern Ohio.  These loans are for the purchase of new or late model used cars.  We serve customers over a broad range of creditworthiness, and the required terms and rates are reflective of those risk profiles.  While these loans have higher yields than many of our other loans, such loans involve significant risks in addition to normal credit risk.  Potential risk elements associated with indirect lending include the limited personal contact with the borrower as a result of indirect lending through dealers, the absence of assured continued employment of the borrower, the varying general creditworthiness of the borrower, changes in the local economy and difficulty in monitoring collateral.  While indirect automobile loans are secured, such loans are secured by depreciating assets and characterized by loan to value ratios that could result in us not recovering the full value of an outstanding loan upon default by the borrower.  Delinquencies, charge-offs and repossessions of vehicles in this portfolio are always concerns.  If general economic conditions worsen, we may experience higher levels of delinquencies, repossessions and charge-offs.

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Commercial and industrial loans may expose us to greater financial and credit risk than other loans.

As of December 31, 2017, approximately 13.9% of our loan portfolio consisted of commercial and industrial loans.  Commercial and industrial loans generally carry larger loan balances and can involve a greater degree of financial and credit risk than other loans.  Any significant failure to pay on time by our customers would hurt our earnings and cause a significant increase in non-performing loans.  The increased financial and credit risk associated with these types of loans are a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the size of loan balances, the effects of general economic conditions on income-producing properties and the increased difficulty of evaluating and monitoring these types of loans.  In addition, when underwriting a commercial or industrial loan, we may take a security interest in commercial real estate, and, in some instances upon a default by the borrower, we may foreclose on and take title to the property, which may lead to potential financial risks.  An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the provision for loan losses and an increase in loan charge-offs, all of which could have a material adverse effect on our business, financial condition or results of operations.

Our allowance for loan loss may not be adequate to cover actual future losses.

We maintain an allowance for loan losses to cover current, probable incurred loan losses.  Every loan we make carries a certain risk of non-repayment, and we make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans.  Through a periodic review and consideration of the loan portfolio, management determines the amount of the allowance for loan losses by considering general market conditions, credit quality of the loan portfolio, the collateral supporting the loans and performance of customers relative to their financial obligations with us.  The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates, which may be beyond our control, and these losses may exceed current estimates.  We cannot fully predict the amount or timing of losses or whether the loss allowance will be adequate in the future.  If our assumptions prove to be incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, which will require additions to the allowance.  Excessive loan losses and significant additions to our allowance for loan losses could have a material adverse impact on our business, financial condition or results of operations.

We are subject to certain risks with respect to liquidity.

“Liquidity” refers to our ability to generate sufficient cash flows to support our operations and to fulfill our obligations, including commitments to originate loans, to repay our wholesale borrowings and other liabilities and to satisfy the withdrawal of deposits by our customers.  Our primary source of liquidity is our core deposit base, which is raised through our retail branch system.  Core deposits – savings and money market accounts, time deposits less than $250 thousand and demand deposits—comprised approximately 96.4% of total deposits at December 31, 2017.  Additional available unused wholesale sources of liquidity include advances from the FHLB, issuances through dealers in the capital markets and access to certificates of deposit issued through brokers.  Liquidity is further provided by unencumbered, or unpledged, investment securities that totaled $123.7 million at December 31, 2017.  An inability to raise funds through deposits, borrowings, the sale or pledging as collateral of loans and other assets could have a substantial negative effect on our liquidity.  Our access to funding sources in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general.  Factors that could negatively affect our access to liquidity sources include a decrease in the level of our business activity due to a market downturn or negative regulatory action against us.  Our ability to borrow could also be impaired by factors that are not specific to us, such as severe disruption of the financial markets or negative news and expectations about the prospects for the financial services industry as a whole, as evidenced by recent turmoil in the domestic and worldwide credit markets.

Our business strategy includes continuing our growth plans. Our business, financial condition or results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

We intend to continue pursuing a profitable growth strategy both within our existing markets and in new markets.  Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in significant growth stages of development.  We cannot assure that we will be able to expand our market

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presence in our existing markets or successfully enter new markets or that any such expansion will not adversely affect our results of operations.  Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations and could adversely affect our ability to successfully implement our business strategy.  Also, if we grow more slowly than anticipated, our operating results could be materially adversely affected.

We may experience difficulties in integrating acquired businesses, or acquisitions may not perform as expected.

We completed the acquisition of Monitor in 2017 and Bowers in 2016.  The successful integration of these acquisitions depends on our ability to manage the operations and personnel of the acquired businesses.  Integrating operations is complex and requires significant efforts and expenses.  Potential difficulties we may encounter as part of the integration process include the following:

• employees may voluntarily or involuntarily exit the Company because of the acquisitions;

• our management team may have its attention diverted while trying to integrate the acquired companies;

• we may encounter obstacles when incorporating the acquired operations into our operations;

• differences in business backgrounds, corporate cultures and management philosophies;

• potential unknown liabilities and unforeseen increased expenses;

• previously undetected operational or other issues; and

• the acquired operations may not otherwise perform as expected or provide expected results.

Any of these factors could adversely affect each company’s ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the acquisition or could reduce each company’s earnings or otherwise adversely affect our business and financial results after the acquisition.

We may fail to realize all of the anticipated benefits of acquisitions, which could reduce our anticipated profitability.

We expect that our acquisitions will result in certain synergies, business opportunities and growth prospects, although we may not fully realize these expectations.  Our assumptions underlying estimates of expected cost savings may be inaccurate or general industry and business conditions may deteriorate.  In addition, our growth and operating strategies for acquired businesses may be different from the strategies that the acquired companies pursued.  If these factors limit our ability to integrate or operate the acquired companies successfully or on a timely basis, our expectations of future results of operations, including certain cost savings and synergies expected to result from acquisitions, may not be met.

We may not be able to attract and retain skilled people.

Our success depends, in large part, on our ability to attract and retain key people.  Competition for the best people in most activities in which we engage can be intense, and we may not be able to retain or hire the people we want or need.  In order to attract and retain qualified employees, we must compensate them at market levels.  If we are unable to continue to attract and retain qualified employees, or do so at rates necessary to maintain our competitive position, our performance, including our competitive position, could suffer, and, in turn, adversely affect our business, financial condition or results of operations.

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Strong competition within our markets could reduce our ability to attract and retain business.

We encounter significant competition from banks, savings and loan associations, credit unions, mortgage banks, and other financial service companies in our markets.  Some of our competitors offer a broader range of products and services than we can offer as a result of their size and ability to achieve economies of scale.  Such competition includes major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain more numerous banking locations and support extensive promotional and advertising campaigns.  Our ability to maintain our history of strong financial performance and return on investment to shareholders will depend in part on our continued ability to compete successfully in our market.  Our financial performance and return on investment to shareholders also depends on our ability to expand the scope of available financial services to our customers.  In addition to other banks, competitors include securities dealers, brokers, investment advisors and finance and insurance companies.  The increasingly competitive environment is, in part, a result of changes in regulation, changes in technology and product delivery systems and the accelerating pace of consolidation among financial service providers.

Consumers may decide not to use banks to complete their financial transactions.

Technology and other changes are allowing parties to utilize alternative methods to complete financial transactions that historically have involved banks.  For example, consumers can now maintain funds in brokerage accounts or mutual funds that would have historically been held as bank deposits.  Consumers can also complete transactions such as paying bills and/or transferring funds directly without the assistance of banks.  The process of eliminating banks as intermediaries could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.  The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our business, financial condition or results of operations.

We are exposed to operational risk.

Similar to any large organization, we are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems.

Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions and from actions taken by government regulators and community organizations in response to those activities.  Negative public opinion can adversely affect our ability to attract and keep customers, and can expose us to litigation and regulatory action.

Given the volume of transactions we process, certain errors may be repeated or compounded before they are discovered and successfully rectified.  Our necessary dependence upon automated systems to record and process our transaction volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect.  We may also be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (for example, computer viruses or electrical or telecommunications outages), which may give rise to disruption of service to customers and to financial loss of liability.  We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as we are) and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate.

Unauthorized disclosure of sensitive or confidential customer information, whether through a data breach of our computer systems by cyber-attack or otherwise, could severely harm our business.

As part of our financial institution business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties.  Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors or other similar events.  If information security is breached, information could be lost or misappropriated, resulting in

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financial loss or costs to us or damages to others.  Any security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information, whether by us or by our vendors, could severely damage our reputation, expose us to the risks of litigation and liability, or disrupt our operations, and have a material adverse effect on our business, financial condition or results of operations.  We have not experienced any material loss relating to a cyber-attack or other information security breach, but there can be no assurance that we will not suffer such attacks or attempted breaches, or incur resulting losses, in the future.  Our risks with respect to these threats remains heightened due to the evolving sophistication and frequency of such threats.  As cyber-attacks and other attempted information security threats continue to evolve, we may be required to spend significant additional resources in efforts to modify and enhance our protective measures or in investigating or remediating of security breaches or vulnerabilities.

We depend on our subsidiaries for dividends, distributions and other payments.

As a financial holding company, we are a legal entity separate and distinct from our subsidiaries.  Our principal source of funds to pay dividends on our common shares is dividends from these subsidiaries.  Federal and state statutory provisions and regulations limit the amount of dividends that our banking and other subsidiaries may pay to us without regulatory approval.  In the event our subsidiaries become unable to pay dividends to us, we may not be able to pay dividends on our outstanding common shares.  Accordingly, our inability to receive dividends from our subsidiaries could also have a material adverse effect on our business, financial condition and results of operations.  Further discussion of our ability to pay dividends can be found under the caption “Dividends and Transactions with Affiliates” in Item 1 of this Annual Report on Form 10-K.

We may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations.  Federal banking agencies have proposed extensive changes to their capital requirements, including raising required amounts and eliminating the inclusion of certain instruments from the calculation of capital.  The final form of such regulations and their impact on the Company is unknown at this time, but may require us to raise additional capital.  In addition, we may elect to raise capital to support our business or to finance acquisitions, if any, or for other anticipated reasons.  Our ability to raise additional capital, if needed, will depend on financial performance, conditions in the capital markets, economic conditions and a number of other factors, including the satisfaction or release of preemptive rights in the event of a common share offering, many of which are outside our control.  Therefore, there can be no assurance additional capital can be raised when needed or that capital can be raised on acceptable terms.  Impairment to our ability to raise capital may have a material adverse effect on our business, financial condition or results of operations.

Risks Related to the Legal and Regulatory Environment

Increases in FDIC insurance premiums may have a material adverse effect on our earnings.

The FDIC maintains the Deposit Insurance Fund to resolve the cost of bank failures.  Since late 2008, the FDIC has taken various actions intended to maintain a strong funding position and restore reserve ratios of the Deposit Insurance Fund.  Those actions included increasing assessment rates for all insured institutions, requiring riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels, and imposing special assessments. In addition, in 2011 the FDIC approved a final rule that changed the deposit insurance assessment base and assessment rate schedule, adopted a new large-bank pricing assessment scheme and set a target size for the Deposit Insurance Fund.  The rule, as mandated by the Dodd-Frank Act, finalized a target size for the Deposit Insurance Fund at 2 percent of insured deposits.  The FDIC recently adopted rules revising assessments in a manner that benefits banks with assets of less than $10 billion, although there can be no assurance that such assessments will not change in the future.

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We have a limited ability to control the amount of premiums we are required to pay for FDIC insurance.  If there are additional financial institution failures or other significant legislative or regulatory changes, the FDIC may be required to increase assessment rates or take actions similar to those taken after 2008.  Increases in FDIC insurance assessment rates may materially adversely affect our results of operations and our ability to continue to pay dividends on our common shares at the current rate or at all.

Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged.

The financial services industry is extensively regulated.  We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations.  Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors and the Deposit Insurance Fund, and not to benefit our shareholders.  The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us or our ability to increase the value of our business.  Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by an institution and the adequacy of an institution’s allowance for loan losses.  Additionally, actions by regulatory agencies or significant litigation against us could cause us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders.

In addition to laws, regulations and actions directed at the operations of banks, proposals to reform the housing finance market consider winding down Fannie Mae and Freddie Mac, which could negatively affect our sales of loans.

Even a reduction in regulatory restrictions could adversely affect our operations and our shareholders if less restrictive regulation increases competition within the industry generally or within our markets.

Our results of operations, financial condition or liquidity may be adversely impacted by issues arising in foreclosure practices, including delays in the foreclosure process, related to certain industry deficiencies, as well as potential losses in connection with actual or projected repurchases and indemnification payments related to mortgages sold into the secondary market.

Previous announcements of deficiencies in foreclosure documentation by several large seller/servicer financial institutions have raised various concerns relating to mortgage foreclosure practices.  The integrity of the foreclosure process is important to our business, as an originator and servicer of residential mortgages.  As a result of our continued focus of concentrating our lending efforts in our primary markets in Ohio, as well as servicing loans for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), we do not anticipate suspending any of our foreclosure activities.  We previously reviewed our foreclosure procedures and concluded they are generally conservative in nature and do not present the significant documentation deficiencies underlying other industry foreclosure problems.  Nevertheless, we could face delays and challenges in the foreclosure process arising from claims relating to industry practices generally, which could adversely affect recoveries and our financial results, whether through increased expenses of litigation and property maintenance, deteriorating values of underlying mortgaged properties or unsuccessful litigation results generally.

In addition, in connection with the origination and sale of residential mortgages into the secondary market, we make certain representations and warranties, which, if breached, may require us to repurchase such loans, substitute other loans or indemnify the purchasers of such loans for actual losses incurred in respect of such loans.  Although we believe that our mortgage documentation and procedures have been appropriate and are generally conservative in nature, it is possible that we will receive repurchase requests in the future and we may not be able to reach favorable settlements with respect to such requests.  It is therefore possible that we may increase our reserves or may sustain losses associated with such loan repurchases and indemnification payments.

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Environmental liability associated with commercial lending could have a material adverse effect on our business, financial condition or results of operations.

A significant portion of our loan portfolio is secured by real property.  During the ordinary course of business, we may foreclose on and take title to properties securing certain loans.  In doing so, there is a risk that hazardous or toxic substances could be found on these properties.  If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage.  In addition, we own and operate certain properties that may be subject to similar environmental liability risks.

Environmental laws may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or sell the affected property.  In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.  Although we have policies and procedures requiring the performance of an environmental site assessment before initiating any foreclosure action on real property, these assessments may not be sufficient to detect all potential environmental hazards.  The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition or results of operations.

Impairment of investment securities, goodwill, other intangible assets, or deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations.

In assessing the impairment of investment securities, we consider the length of time and extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuers, whether the market decline was affected by macroeconomic conditions and whether we have the intent to sell the debt security or will be required to sell the debt security before its anticipated recovery.  Under current accounting standards, goodwill and certain other intangible assets with indeterminate lives are no longer amortized but, instead, are assessed for impairment periodically or when impairment indicators are present.  Assessment of goodwill and such other intangible assets could result in circumstances where the applicable intangible asset is deemed to be impaired for accounting purposes.  Under such circumstances, the intangible asset’s impairment would be reflected as a charge to earnings in the period.  Deferred tax assets are only recognized to the extent it is more likely than not they will be realized.  Should management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a change to earnings would be reflected in the period.  This was realized as a result of the enactment on December 22, 2017, of H.R.1, known as the “Tax Cuts and Jobs Act” which, among other things, reduced the corporate income tax rate to 21% effective January 1, 2018.  As a result of passage of the new tax law, Farmers completed a revaluation of its net deferred tax assets.  The Company’s deferred tax assets, net of deferred tax liabilities, represent corporate tax benefits anticipated to be realized in the future.  The reduction in the federal corporate tax rate, effective January 1, 2018, reduces these benefits.  Farmers determined that its net deferred tax assets would be reduced by approximately $1.8 million in the fourth quarter of 2017, representing an impact on earnings per share of approximately $0.06 per diluted share based fourth quarter weighted average diluted shares outstanding of approximately 27.5 million.

Changes and uncertainty in tax laws, including the recently enacted Tax Cuts and Jobs Act, could adversely affect our performance.

We are subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, financial institutions tax, withholding and ad valorem taxes.  Changes to our taxes could have a material adverse effect on our results of operations and, as described in the above risk discussion and below, the fair value of net deferred tax assets.  In addition, our customers are subject to a wide variety of federal, state and local taxes.  Changes in taxes paid by our customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for our loans and deposit products.  In addition, such negative effects on our customers could result in defaults on the loans we have made and decrease the value of mortgage-backed securities in which we have invested.

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The Tax Cuts and Jobs Act, among other changes, imposes additional limitations on the federal income tax deductions individual taxpayers may take for mortgage loan interest payments and for payments of state and local taxes, including real property taxes. The Tax Cuts and Jobs Act also imposes additional limitations on the deductibility of business interest expense and eliminates other deductions in their entirety, including deductions for certain home equity loan interest payments. Such limits and eliminations may result in customer defaults on loans we have made and decrease the value of mortgage-backed securities in which we have invested.

Anti-takeover provisions could delay or prevent an acquisition or change in control by a third party.

Provisions of the Ohio General Corporation Law, our Amended Articles of Incorporation, and our Amended Code of Regulations, including a staggered board and supermajority voting requirements, could make it more difficult for a third party to acquire control of us or could have the effect of discouraging a third party from attempting to acquire control of us.

We may be a defendant from time to time in the future in a variety of litigation and other actions, which could have a material adverse effect on our business, financial condition or results of operations.

We and our subsidiaries may be involved from time to time in the future in a variety of litigation arising out of our business.  Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.  Should the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our business, financial condition or results of operations.  In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all.

Item 1B. Unresolved Staff Comments.

There are no matters of unresolved staff comments from the Commission staff.

Item 2. Properties.

Farmers National Banc Corp.’s Properties

The Company does not own any property.  The Company’s operations are conducted at Farmers Bank’s main office, which is located at 20 and 30 South Broad Street, Canfield, Ohio.

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Farmers National Bank Property

The Bank’s main office is located at 20 and 30 S. Broad Street, Canfield, Ohio.  The other locations of Farmers Bank are:

Office Building	40 & 46 S. Broad St., Canfield, Ohio
Austintown Office	22 N. Niles-Canfield Rd., Youngstown, Ohio
Lake Milton Office	17817 Mahoning Avenue, Lake Milton, Ohio
Cornersburg Office	3619 S. Meridian Rd., Youngstown, Ohio
Colonial Plaza Office	401 E. Main St. Canfield, Ohio
Western Reserve Office	102 W. Western Reserve Rd., Youngstown, Ohio
Salem Office	2424 East State Street, Salem, Ohio
Columbiana Office	340 State Rt. 14, Columbiana, Ohio
Damascus Office	29053 State Rt. 62 Damascus, Ohio
Poland Office	106 McKinley Way West, Poland, Ohio
Niles Office	1 South Main Street, Niles, Ohio
Niles Drive Up	170 East State Street, Niles, Ohio
Girard Office	121 North State Street, Girard, Ohio
Eastwood Office	5845 Youngstown-Warren Rd, Niles, Ohio
Niles Operation Center	51 South Main Street, Niles, Ohio
Canton Office	4518 Fulton Dr., Canton, Ohio
McClurg Road Office	42 McClurg Rd., Boardman, Ohio
Howland Office	1625 Niles-Cortland Rd., Warren, Ohio
Fairlawn Office	2820 W. Market St., Suite 120, Akron, Ohio
Wealth Management Bldg.	2 S. Broad Street, Canfield, Ohio
Alliance Office	310 West State St., Alliance, Ohio
Midway Office	7227 East Lincoln Way, Apple Creek, Ohio
Dalton Office	12 West Main St., Dalton, Ohio
Calcutta Office	15703 State Rt. 170, Calcutta, Ohio
East Liverpool Office	617 Bradshaw Ave., East Liverpool, Ohio
Kidron Office	4950 Kidron Rd., Kidron, Ohio
Lisbon Office	131 East Lincoln Way, Lisbon, Ohio
Lodi Office	106 Ainsworth, Lodi, Ohio
Massillon Office	211 Lincoln Way East, Massillon, Ohio
Mayflower Office	2312 Lincoln Way NW, Massillon, Ohio
Mount Eaton Office	15974 East Main St., Mount Eaton, Ohio
Orrville Main Office	112 W. Market St., Orrville, Ohio
West High Street Office	1320 W. High St., Orrville, Ohio
Seville Office	4885 Atlantic Dr., Seville, Ohio
Smithville Office	153 East Main St., Smithville, Ohio
Burbank Road Office	4192 Burbank Rd., Wooster, Ohio
Downtown Wooster Office	305 West Liberty Street, Wooster, Ohio
Midland Office	629 Midland Ave., Midland, Pennsylvania
Beachwood Lending Office	27600 Chagrin Blvd., Suite 300, Woodmere, Ohio
Big Prairie Office	13210 State Route 226, Big Prairie, Ohio
Beaver Lending Office	501 3rd Street, Beaver, Pennsylvania

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The Bank owns all locations except the Colonial Plaza, Canton, Alliance, East Liverpool, Fairlawn, Downtown Wooster, Beaver lending office and the Beachwood lending office, which are leased.

Farmers Trust Company Property

Farmers Trust Company operates from four locations owned and leased by the Bank:

Boardman Office	42 McClurg Rd., Boardman, Ohio
Howland Office	1625 Niles-Cortland Rd., Warren, Ohio
Canton Office	4518 Fulton Dr. NW, Canton, Ohio
Downtown Wooster Office	305 West Liberty St., Wooster, Ohio

The bank owns the Boardman and Howland offices and leases space to the Trust Company. The Canton and Wooster locations are leased from third parties.

Farmers National Insurance, LLC Property

Farmers National Insurance operates from two locations which are owned by the Bank:

Wealth Management Building	2 S. Broad Street, Canfield, Ohio
Bowers Group Building	339 North High Street, Cortland, Ohio

National Associates, Inc. Property

National Associates, Inc. operates from one location which is leased:

Fairview Park 22720 Fairview Center Dr., Suite 100, Fairview Park, Ohio

Item 3. Legal Proceedings.

In the normal course of business, the Company and its subsidiaries are at times subject to pending and threatened legal actions, some for which the relief or damages sought are substantial.  Although Farmers is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, would not have a material adverse effect on the results of operations or stockholders’ equity of the Company.  However, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not known.

Item 4. Mine Safety Disclosures

Not applicable.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities

Market Information regarding the Company’s Common Shares.

Farmers’ common shares currently trade under the symbol “FMNB” on the Nasdaq Capital Market.  Farmers had 27,554,207 common shares outstanding and approximately 3,451 holders of record of common shares at March 1, 2018.  The following table sets forth price ranges and dividend information for Farmers’ common shares for the calendar quarters indicated.  Quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.  Certain limitations and restrictions on the ability of Farmers to continue to pay quarterly dividends are described under the caption “Capital Resources” in Item 7 of this Part II, and under the caption “Dividends and Transactions with Affiliates” in Item 1 of Part I.

Quarter Ended	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017
High	$	14.90	$	15.25	$	15.65	$	15.95
Low	$	12.13	$	12.65	$	12.90	$	13.35
Cash dividends paid per share	$	0.05	$	0.05	$	0.06	$	0.06

Quarter Ended	March 31, 2016		June 30, 2016		September 30, 2016		December 31, 2016
High	$	9.03	$	9.68	$	11.82	$	15.50
Low	$	8.00	$	8.54	$	8.66	$	9.98
Cash dividends paid per share	$	0.04	$	0.04	$	0.04	$	0.04

Purchases of Common Shares by Farmers.

In September 2012, the Company announced that its Board of Directors approved a share repurchase program under which the Company was authorized to repurchase up to 920,000 shares of its common stock in the open market or in privately negotiated transactions, subject to market and other conditions (the “Program”).  The Program may be modified, suspended or terminated by the Company at any time.  There were no shares repurchased during the course of 2017. 19,900 shares of its common stock were repurchased by the Company in 2016 and 26,800 shares in 2015.

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Item 6. Selected Financial Data.

SELECTED FINANCIAL DATA

(Table Dollar Amounts in Thousands except Per Share Data)

For the Years Ending December 31,	2017			2016			2015			2014			2013
Summary of Earnings
Total Interest and Dividend Income    (including fees on loans)	$	80,527		$	72,498		$	53,827		$	40,915		$	40,959
Total Interest Expense		6,881			4,378			4,090			4,579			5,063
Net Interest Income		73,646			68,120			49,737			36,336			35,896
Provision for Loan Losses		3,350			3,870			3,510			1,880			1,290
Noninterest Income (1)		24,051			23,244			18,306			15,303			13,914
Noninterest Expense		61,567			59,452			53,979			38,162			39,057
Income Before Income Taxes		32,780			28,042			10,554			11,597			9,463
Income Taxes		10,069			7,485			2,499			2,632			1,683
NET INCOME	$	22,711		$	20,557		$	8,055		$	8,965		$	7,780
Per Share Data
Basic Earnings Per Share	$	0.82		$	0.76		$	0.36		$	0.48		$	0.41
Diluted Earnings Per Share		0.82			0.76			0.36			0.48			0.41
Cash Dividends Paid		0.22			0.16			0.12			0.12			0.12
Book Value at Year-End		8.79			7.88			7.35			6.71			6.02
Tangible Book Value (2)	7.14			6.21			5.76			6.23			5.47
Balances at Year-End
Total Assets	$	2,159,069		$	1,966,113		$	1,869,902		$	1,136,967		$	1,137,326
Earning Assets		1,998,245			1,819,455			1,735,843			1,074,434			1,076,073
Total Deposits		1,604,719			1,524,756			1,409,047			915,703			915,216
Short-Term Borrowings		289,565			198,460			225,832			59,136			81,617
Long-Term Borrowings		6,994			15,036			22,153			28,381			19,822
Loans Held for Sale		272			355			1,769			511			158
Net Loans		1,565,066			1,416,783			1,287,887			656,220			623,116
Total Stockholders' Equity		242,074			213,216			198,047			123,560			113,007
Average Balances
Total Assets	$	2,082,447		$	1,924,914		$	1,482,527		$	1,141,047		$	1,141,770
Total Stockholders' Equity		228,963			211,408			162,086			120,352			116,735
Significant Ratios
Return on Average Assets (ROA)		1.09	%		1.07	%		0.54	%		0.79	%		0.68	%
Return on Average Equity (ROE)		9.92			9.72			4.97			7.45			6.66
Average Earning Assets/Average Assets		92.35			91.49			91.91			93.02			92.90
Average Equity/Average Assets		10.99			10.98			10.93			10.55			10.22
Loans/Deposits		98.30			93.63			92.04			72.50			68.91
Allowance for Loan Losses/Total Loans		0.78			0.76			0.69			1.15			1.20
Allowance for Loan    Losses/Nonperforming Loans		160.04			132.83			85.96			89.99			83.25
Efficiency Ratio (On tax equivalent basis)		59.66			61.59			75.26			70.24			74.82
Net Interest Margin		3.99			4.01			3.81			3.59			3.58
Dividend Payout Rate		26.47			21.03			33.32			24.95			28.89
Tangible Common Equity Ratio (3)		9.31			8.75			8.50			10.17			9.11

(1) Noninterest income includes a securities impairment charge of $3 thousand for the year ended December 31, 2013

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(2) Tangible book value per share is Total Stockholders’ Equity minus goodwill and other intangible assets divided by the number of shares outstanding.

(3) 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 our capital levels.  Since there is no authoritative requirement to calculate the tangible common equity ratio, our 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 December 31, 2017, 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:

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

December 31,	2017		2016		2015		2014		2013
Stockholders' Equity	$	242,074	$	213,216	$	198,047	$	123,560	$	113,007
Less Goodwill and other intangibles		45,369		45,154		42,911		8,813		10,343
Tangible Common Equity	$	196,705	$	168,062	$	155,136	$	114,747	$	102,664

Reconciliation of Total Assets to Tangible Assets

December 31,	2017		2016		2015		2014		2013
Total Assets	$	2,159,069	$	1,966,113	$	1,869,902	$	1,136,967	$	1,137,326
Less Goodwill and other intangibles		45,369		45,154		42,911		8,813		10,343
Tangible Assets	$	2,113,700	$	1,920,959	$	1,826,991	$	1,128,154	$	1,126,983

Acquisitions have occurred during the five year periods represented above that makes comparability difficult.  The current year impact of enacted federal tax reform makes comparability difficult too.  See Note 2 – Business Combinations and Note 16 – Income Taxes for additional details.

Reconciliation of Net Income, Excluding Merger Related Expenses and Deferred Tax Asset Adjustment

December 31,	2017		2016		2015		2014		2013
Net income	$	22,711	$	20,557	$	8,055	$	8,965	$	7,780
Acquisition related costs - tax equated		283		412		4,831		0		214
Deferred tax asset adjustment		1,793		0		0		0		0
Net income - adjusted		24,787		20,969		12,886		8,965		7,994
Average shares outstanding		27,568		27,000		22,678		18,675		18,773
EPS excluding acquisition costs and deferred tax asset adjustment	$	0.90	$	0.78	$	0.57	$	0.48	$	0.43

Reconciliation of Return on Average Assets and Average Equity, Excluding Merger Related Expenses and Deferred Tax Asset Adjustment

December 31,	2017			2016			2015			2014			2013
ROA excluding merger related expenses (5)		1.19	%		1.09	%		0.87	%		0.79	%		0.71	%
ROE excluding merger related expenses (6)		10.83	%		9.92	%		7.95	%		7.45	%		6.93	%

(5) Net income - adjusted divided by average assets

(6) Net income - adjusted divided by average equity

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Average Balance Sheets and Related Yields and Rates

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,	2017								2016								2015
	AVERAGE								AVERAGE								AVERAGE
	BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE			BALANCE			INTEREST		RATE
EARNING ASSETS
Loans (1) (3) (5)	$	1,493,550		$	70,573		4.73	%	$	1,344,308		$	63,757		4.74	%	$	955,415		$	45,242		4.74	%
Taxable securities (2)		213,634			4,899		2.29			240,087			5,058		2.11			279,808			5,903		2.11
Tax-exempt securities (2) (5)		167,824			7,293		4.35			132,550			5,581		4.21			103,947			4,510		4.34
Equity securities (4) (5)		10,285			537		5.22			9,613			515		5.36			6,561			287		4.37
Federal funds sold and other cash		37,880			394		1.04			34,579			166		0.48			16,855			29		0.17
Total earning assets		1,923,173			83,696		4.35			1,761,137			75,077		4.26			1,362,586			55,971		4.11
NONEARNING ASSETS
Cash and due from banks		32,696								32,833								24,862
Premises and equipment		22,953								23,927								21,007
Allowance for Loan Losses		(11,567	)							(9,728	)							(7,976	)
Unrealized gains on securities		(781	)							4,576								1,788
Other assets (1)		115,973								112,169								80,260
Total Assets	$	2,082,447							$	1,924,914							$	1,482,527
INTEREST-BEARING LIABILITIES
Time deposits	$	242,650		$	2,565		1.06	%	$	245,384		$	1,835		0.75	%	$	227,412		$	2,610		1.15	%
Savings deposits		521,099			728		0.14			540,626			685		0.13			468,123			534		0.11
Demand deposits		405,062			1,197		0.30			333,712			701		0.21			219,257			345		0.16
Short term borrowings		270,949			2,167		0.80			211,713			689		0.33			107,850			177		0.16
Long term borrowings		9,739			224		2.30			19,886			468		2.35			34,799			424		1.22
Total Interest-Bearing Liabilities		1,449,499			6,881		0.47			1,351,321			4,378		0.32			1,057,441			4,090		0.39
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits		390,230								348,003								250,628
Other Liabilities		13,755								14,182								12,372
Stockholders' equity		228,963								211,408								162,086
Total Liabilities and
Stockholders' Equity	$	2,082,447							$	1,924,914							$	1,482,527
Net interest income and interest rate spread				$	76,815		3.88	%				$	70,699		3.94	%				$	51,881		3.72	%
Net interest margin							3.99	%							4.01	%							3.81	%

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

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

(3) Interest on loans includes fee income of $3.7 million, $3.9 million and $3.0 million for 2017, 2016 and 2015, respectively, and is reduced by amortization of $2.7 million, $2.5 million and $2.3 million for 2017, 2016 and 2015, respectively.

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

(5) For 2017, adjustments of $639 thousand and $2.5 million were made to tax equate income on tax exempt loans and tax exempt securities.  For 2016, adjustments of $648 thousand and $1.9 million were made to tax equate income on tax exempt loans and tax exempt securities.  For 2015, adjustments of $585 thousand and $1.6 million were 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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RATE AND VOLUME ANALYSIS

(Table Dollar Amounts in Thousands except Per Share Data)

The following table analyzes by rate and volume the dollar amount of changes in the components of the interest differential:

	2017 change from 2016									2016 change from 2015
	Net			Change Due			Change Due			Net			Change Due			Change Due
	Change			To Volume			To Rate			Change			To Volume			To Rate
Tax Equivalent Interest Income
Loans	$	6,816		$	7,078		$	(262	)	$	18,515		$	18,415		$	100
Taxable securities		(159	)		(557	)		398			(845	)		(838	)		(7	)
Tax-exempt securities		1,712			1,485			227			1,071			1,241			(170	)
Equity securities		22			36			(14	)		228			134			94
Funds sold and other cash		228			16			212			137			30			107
Total interest income	$	8,619		$	8,058		$	561		$	19,106		$	18,982		$	124
Interest Expense
Time deposits	$	730		$	(20	)	$	750		$	(776	)	$	206		$	(982	)
Savings deposits		43			(25	)		68			151			83			68
Demand deposits		496			150			346			356			180			176
Short term borrowings		1,478			193			1,285			512			170			342
Long term borrowings		(244	)		(239	)		(5	)		44			(182	)		226
Total interest expense	$	2,503		$	59		$	2,444		$	287		$	457		$	(170	)
Increase (decrease) in tax equivalent net interest income	$	6,116		$	7,999		$	(1,883	)	$	18,819		$	18,525		$	294

The amount of change not solely due to rate or volume changes was allocated between the change due to rate and the change due to volume based on the relative size of the rate and volume changes.

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

The following presents a discussion and analysis of Farmers’ financial condition and results of operations by its management. The review highlights the principal factors affecting earnings and the significant changes in balance sheet items for the years 2017, 2016 and 2015.  Financial information for prior years is presented when appropriate.  The objective of this financial review is to enhance the reader’s understanding of the accompanying tables and charts, the consolidated financial statements, notes to financial statements and financial statistics appearing elsewhere in this Annual Report on Form 10-K.  Where applicable, this discussion also reflects management’s insights of known events and trends that have or may reasonably be expected to have a material effect on Farmers’ business, financial condition or results of operations.

Cautionary Note Regarding Forward Looking Statements

Discussions in this Annual Report on Form 10-K 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 Farmers’ filings with the Securities and Exchange Commission, including without limitation the risk factors disclosed in Item 1A, “Risk Factors” of this Annual Report on Form 10-K.

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 Farmers conducts 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 Farmers conducts 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 similar items.

Other factors not currently anticipated may also materially and adversely affect Farmers’ business, financial condition, results of operations or cash flows.  There can be no assurance that future results will meet expectations.  While the Company believes that the forward-looking statements in this Annual Report on Form 10-K 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.  Farmers 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.

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Results of Operations

Comparison of Operating Results for the Years Ended December 31, 2017 and 2016.

The Company’s net income totaled $22.7 million during 2017, compared to $20.6 million for 2016.  On a per share basis, diluted earnings per share were $0.82 as compared to $0.76 diluted earnings per share for 2016.  Return on average assets and return on average equity were 1.09% and 9.92%, respectively, for the year ending December 31, 2017, compared to 1.07% and 9.72% for 2016.  Excluding a $1.8 million adjustment of the net deferred tax asset resulting from the Tax Cuts and Jobs Act that became law in December 2017 and $524 thousand in expenses related to acquisition activities, net income for 2017 would have been $24.8 million or $0.90 per diluted share, and the return on average assets and return on average equity would have been 1.19% and 10.83%, while the return on average tangible equity would have been 13.48%.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law.  H.R.1, among other things, reduces the corporate income tax rate to 21%, effective January 1, 2018.  As a result of passage of the new tax law, Farmers completed a revaluation of its net deferred tax assets.  The Company’s deferred tax assets, net of deferred tax liabilities, represent corporate tax benefits anticipated to be realized in the future.  The reduction in the federal corporate tax rate, effective January 1, 2018, reduces these benefits.  Farmers determined that its net deferred tax assets would be reduced by approximately $1.8 million in the fourth quarter of 2017, representing an impact on earnings per share of approximately $0.06 per diluted share based fourth quarter weighted average diluted shares outstanding of approximately 27.5 million.

On August 15, 2017, the Company completed the acquisition of Monitor Bancorp, Inc. (“Monitor”), the holding company for Monitor Bank.  The transaction involved both cash and 465,787 shares of stock totaling $7.5 million.  Pursuant to the terms of the merger agreement, common shareholders of Monitor were entitled to elect to receive consideration in cash or in common shares, without par value, of the Farmers National Banc Corp., subject to an overall limitation of 85% of the Monitor common shares being exchanged for Farmers common shares and 15% exchanged for cash.  The per share cash consideration of $769.38 is equal to Monitor’s March 31 tangible book value multiplied by 1.25.  Based on the volume weighted average closing price of Farmers common shares for the 20 trading days ended August 11, 2017 of $14.04, the final stock exchange ratio was 54.80, resulting in an implied value per Monitor common share of $769.38.

On June 1, 2016, the Bank completed the acquisition of Bowers Insurance Agency, Inc. (Bowers), and merged Bowers with Insurance, the Bank’s wholly-owned insurance agency subsidiary.  Bowers will continue to operate out of its Cortland, Ohio location and will enhance the Company’s current product lineup, and offer broader options of commercial, farm, home, and auto property/casualty insurance carriers to meet all the needs of all the Company’s customers.  The transaction involved both cash and 123,280 shares of stock totaling $3.2 million, including up to $1.2 million of future payments, contingent upon Bowers meeting performance targets.  Goodwill of $1.8 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $1.6 million is related to client relationships, company name and noncompetition agreements.

Net Interest Income

Net interest income, the principal source of the Company’s earnings, represents the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities.  For 2017, taxable equivalent net interest income increased $6.1 million, or 8.7%, from 2016.  Interest-earning assets averaged $1.923 billion during 2017, increasing $162.0 million compared to 2016.  The Company’s interest-bearing liabilities increased 7.3% from $1.351 billion in 2016 to $1.449 billion in 2017.  The previously mentioned acquisition of Monitor increased interest-earning assets by $38.1 million and interest-bearing liabilities by $17.8 million at the completion date.

The Company finances its earning assets with a combination of interest-bearing and interest-free funds.  The interest-bearing funds are composed of deposits, short-term borrowings and long-term debt.  Interest paid for the use of these funds is the second factor in the net interest income equation.  Interest-free funds, such as demand deposits and stockholders’ equity, require no interest expense and, therefore, contribute significantly to net interest income.

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The profit margin, or spread, on invested funds is a key performance measure.  The Company monitors two key performance indicators - net interest spread and net interest margin.  The net interest spread represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities.  The net interest spread in 2017 was 3.88%, decreasing from 3.94% in 2016.  The net interest margin represents the overall profit margin – net interest income as a percentage of total interest-earning assets.  This performance indicator gives effect to interest earned for all investable funds including the substantial volume of interest-free funds.  For 2017, the net interest margin, measured on a fully taxable equivalent basis, decreased to 3.99%, compared to 4.01% in 2016.  The net interest margin, excluding the impact of amortization and accretion from acquisitions, improved one basis point to 3.96% for the year ended December 31, 2017.  The accretion added $49.6 thousand per month during 2017 and will continue over the next several years.

The slight decrease in net interest margin is mainly due to pressure on increasing deposit rates as the Federal Reserve Bank continues to raise the federal funds interest rate.  Total taxable equivalent interest income was $83.7 million for 2017, which is $8.6 million more than the $75.1 million reported in 2016.  In comparing the years ending December 31, 2017 and 2016, yields on earning assets increased 9 basis points while the cost of interest bearing liabilities increased 15 basis points.  Average loans increased $149.2 million, or 11.1%, in 2017, and the loan yield decreased one basis point to 4.73%.  Tax equated income from securities, federal funds and other increased $1.8 million, or 15.9%, in 2017.  Farmers saw its yields on these assets increase from 2.72% in 2016 to 3.05% in 2017 and the average balance of investment securities and federal funds sold also increased from $416.8 million in 2016 to $429.6 million in 2017.

Total interest expense amounted to $6.9 million for 2017, a 57.2% increase from $4.4 million reported in 2016.  The increase in 2017 is the result of a $49.1 million or 4.4% increase in interest-bearing deposits and a $49.1 million or 21.2% increase in other borrowings.  The cost of interest-bearing liabilities increased from 0.32% in 2016 to 0.47% in 2017.

Management will continue to evaluate future changes in interest rates and the shape of the treasury yield curve so that assets and liabilities may be priced accordingly to minimize the impact on the net interest margin.

Noninterest Income

Total noninterest income increased by $807 thousand or 3.5% in 2017.  The increase in noninterest income is due to several factors.  Gains on the sale of mortgage loans increased from $2.8 million to $3.1 million, representing an increase of $300 thousand or 8%.  Insurance agency commissions also increased to $2.4 million compared to $1.6 million in 2016 and service charges on deposit accounts increased from $4.0 million in 2016 to $4.1 million in 2017, reflecting the size of the company of after the two bank acquisitions.  Debit card interchange fees also increased $430 thousand or 16.1%.  These increases were offset by a decrease in other operating income of $478 thousand and a decrease in investment commissions of $291 thousand.  The Bank and Company expect these amounts to increase during 2018 as management continues to focus on growing the various sources of noninterest income.

Noninterest Expenses

Noninterest expense for 2017 was $61.6 million, compared to $59.5 million in 2016, representing an increase of $2.1 million, or 3.6%.  Most of the increase was from salaries and employee benefits, which increased $2.9 million or 8.9%, mainly due to an increase in salaries, as the previously mentioned acquisition of Bowers was completed on June 1, 2016 which resulted in seven months of expense in 2016 compared to a full year in 2017.  The Company also experienced an increase in employee health care insurance expense in 2017.  The Company’s full time equivalent employees (“FTE”) increased by 1.0% from December 31, 2016 to December 31, 2017.  Other operating expenses decreased by $1.0 million as a result of increased efficiencies gained as the Company grew in 2017.  Excluding expenses related to acquisition activities, noninterest expenses measured as a percentage of average assets decreased from 3.06% in 2016 to 2.93% in 2017.

The Company’s tax equivalent efficiency ratio for the twelve month period ended December 31, 2017 was 59.66%, compared to 61.59% for the same period in 2016.  Excluding expenses related to acquisition activities, the efficiency ratio for the year ended December 31, 2017 improved to 58.79% compared to 60.99% in 2016.  The main factors leading to the improvement in the efficiency ratio was the increase in net interest income and noninterest

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income, along with the stabilized level of noninterest expenses relative to average assets as explained in the preceding paragraph.  The efficiency ratio is calculated as follows: non-interest expense divided by the sum of tax equivalent net interest income plus non-interest income, excluding security gains and losses and intangible amortization.  This ratio is a measure of the expense incurred to generate a dollar of revenue.  Management will continue to closely monitor and keep the increases in other expenses to a minimum.

Income Taxes

Income tax expense totaled $10.1 million for 2017 and $7.5 million in 2016.  Income taxes are computed using the appropriate effective tax rates for each period.  The increase in the current year tax expense is a result of a 16.9% increase in income before income taxes, from $28 million in 2016 to $32.8 million in 2017.  The previously mentioned Tax Cuts and Jobs Act also added $1.8 million to the current year’s income tax expense as a result of the write-down of the Company’s deferred tax asset from 35% to 21%.  The effective tax rates are less than the statutory tax rate primarily due to nontaxable interest and dividend income.  The effective income tax rate was 30.7% for 2017 and 26.7% for 2016. Based on early projections, we anticipate that the new effective tax rate in 2018 could be in the range of 15% to 19%. Refer to Note 16 to the consolidated financial statements for additional information regarding the effective tax rate.

Comparison of Operating Results for the Years Ended December 31, 2016 and 2015.

The Company’s net income totaled $20.6 million during 2016, compared to $8.1 million for 2015. On a per share basis, diluted earnings per share were $0.76 as compared to $0.36 diluted earnings per share for 2015.  Excluding expenses related to acquisition activities, net income for 2016 would have been $21.0 million, or $0.78 per share and net income for 2015 would have been $12.9 million or $0.57 per share.  Common comparative ratios for results of operations include the return on average assets and return on average stockholders’ equity.  For 2016, the return on average equity was 9.72%, compared to 4.97% for 2015. The return on average assets was 1.07% for 2016 and 0.54% for 2015.   Excluding expenses related to acquisition activities, the return on average assets and return on average stockholders’ equity were 1.09% and 9.92% in 2016, compared to 0.87% and 7.95% in 2015, respectively.

The results for 2016 included $73 thousand in gains on sales of securities, compared to $94 thousand in 2015.

Net Interest Income

For 2016, taxable equivalent net interest income increased $18.8 million, or 36.3%, from 2015. Interest-earning assets averaged $1.761 billion during 2016, increasing $398.6 million compared to 2015.  The Company’s interest-bearing liabilities increased 27.8% from $1.057 billion in 2015 to $1.351 billion in 2016.  The NBOH and Tri-State acquisitions increased interest-earning assets by $647.5 million and interest-bearing liabilities by $605.5 million at their respective completion dates.

Total taxable equivalent interest income was $75.1 million for 2016, which is $19.1 million more than the $56.0 million reported in 2015.  In comparing the years ending December 31, 2016 and 2015, yields on earning assets increased 15 basis points while the cost of interest bearing liabilities decreased similarly at seven basis points.  Average loans increased $388.9 million, or 40.7%, in 2016, and the loan yield remained unchanged at 4.74%.  Tax equated income from securities, federal funds and other increased $591 thousand, or 5.50%, in 2016.  Farmers saw its yields on these assets increase slightly from 2.64% in 2015 to 2.72% in 2016.  The average balance of investment securities and federal funds sold also increased from $407.2 million in 2015 to $416.8 million in 2016.

Total interest expense amounted to $4.4 million for 2016, a 7.0% increase from $4.1 million reported in 2015.  The increase in 2016 is the result of a $204.9 million increase in interest-bearing deposits and an $89.0 million increase in other borrowings.  The cost of interest-bearing liabilities decreased from 0.39% in 2015 to 0.32% in 2016.

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Noninterest Income

Total noninterest income increased by $4.9 million in 2016.  The increase in noninterest income is due to several factors.  Gains on the sale of mortgage loans increased from $1.1 million to $2.8 million, representing an increase of $1.7 million.  Insurance agency commissions also increased to $1.6 million compared to $569 thousand in 2015 and service charges on deposit accounts increased from $3.3 million in 2015 to $4.0 million in 2016, reflecting the size of the company after the two bank acquisitions.  Debit card interchange fees also increased $780 thousand or 41.5%.  Other operating income also increased $599 thousand, primarily as a result of the positive impact from account level transaction volumes from the merger related growth.  

Noninterest Expenses

Noninterest expense for 2016 was $59.5 million, compared to $54.0 million in 2015, representing an increase of $5.5 million, or 10.1%.  Most of the increase was from salaries and employee benefits, which increased $5.3 million or 19.8%, mainly due to an increase in the number of employees resulting from the mergers.  The Company’s full time equivalent employees (“FTE”) increased by 8.5% from December 31, 2015 to December 31, 2016.  Occupancy and equipment costs also increased $1.2 million due to additional banking locations resulting from the mergers.  Excluding expenses related to acquisition activities, noninterest expenses measured as a percentage of average assets decreased from 3.21% in 2015 to 3.06% in 2016.

The Company’s tax equivalent efficiency ratio for the 12 month period ended December 31, 2016 was 61.59%, compared to 75.26% for the same period in 2015.  Excluding expenses related to acquisition activities, the efficiency ratio for the year ended December 31, 2016 improved to 60.99%.  The main factors leading to the improvement in the efficiency ratio was the increase in net interest income and noninterest income, along with the stabilized level of noninterest expenses relative to average assets as explained in the preceding paragraph.  The efficiency ratio is calculated as follows: non-interest expense divided by the sum of tax equivalent net interest income plus non-interest income, excluding security gains and losses and intangible amortization.  This ratio is a measure of the expense incurred to generate a dollar of revenue.  Management will continue to closely monitor and keep the increases in other expenses to a minimum.  

Income Taxes

Income tax expense totaled $7.5 million for 2016 and $2.5 million in 2015.  The increase in the current year tax expense can be mainly attributed to the $17.5 million increase in income before taxes.  The effective tax rates are less than the statutory tax rate primarily due to nontaxable interest and dividend income.  The effective income tax rate was 26.7% for 2016 and 23.7% for 2015.

Liquidity

Farmers 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.

Principal sources of liquidity include assets considered relatively liquid, such as short-term investment securities, federal funds sold and cash and due from banks.

Along with its liquid assets, Farmers has additional sources of liquidity available which help to insure 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 three major domestic banks.  At December 31, 2017, Farmers had not borrowed against these lines of credit.  Management feels that its liquidity position is more than adequate and will continue to monitor the position on a monthly basis.  The Company also has additional borrowing capacity with the FHLB, as well as access to the Federal Reserve Discount Window, which provides an additional source of funds.  The Company views its membership in the FHLB as a solid source of liquidity.  As of December 31, 2017, the Bank is eligible to borrow an additional $60 million from the FHLB under various fixed rate and variable rate credit facilities.  Advances outstanding from the FHLB at December 31, 2017 amounted to $219.8 million.

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Farmers’ primary investing activities are originating loans and purchasing securities.  During 2017, net cash used by investing activities amounted to $137.1 million, compared to $115.4 million used in 2016.  Net increases in loans were $132.3 million in 2017, compared to $133.2 million in 2016.  The cash used by lending activities during 2017 can be attributed to the activity in the commercial real estate, residential real estate, and agricultural loan portfolios.  Purchases of securities available for sale were $114.6 million in 2017, compared to $52.6 million in 2016, and proceeds from maturities and sales of securities available for sale were $97.6 million in 2017, compared to $71.4 million in 2016.  Net cash of $16.3 million was received as a result of the acquisition of Monitor in 2017.

Farmers’ primary financing activities are obtaining deposits, repurchase agreements and other borrowings.  Net cash provided by financing activities amounted to $122.4 million for 2017, compared to $76.7 million in 2016.  The majority of this increase can be attributed to the net change in short-term borrowings as the Company increased their short-term borrowings by $91.1 million in 2017 compared to a $27.4 million decrease in 2016.  The increase in short-term borrowings is mainly a result of loan growth outpacing deposit growth during 2017.  Deposits increased $45.4 million in 2017, compared to a $115.7 million increase in 2016.  

Loan Portfolio

Maturities and Sensitivities of Loans to Interest Rates

The following schedule shows the composition of loans and the percentage of loans in each category at the dates indicated. Balances include unamortized loan origination fees and costs.

Years Ended December 31,	2017				2016				2015				2014				2013
Commercial Real Estate	$	512,502	32.5	%	$	445,966	31.2	%	$	408,534	31.5	%	$	222,573	33.5	%	$	217,362	34.4	%
Commercial		219,973	13.9			204,359	14.3			199,457	15.4			120,139	18.1			105,011	16.7
Residential Real Estate		468,884	29.7			430,195	30.1			394,582	30.4			183,853	27.7			170,151	27.0
Consumer		212,935	13.5			218,100	15.3			185,077	14.3			137,276	20.7			138,148	21.9
Agricultural		163,087	10.4			129,015	9.1			109,215	8.4			11	0.0			12	0.0
Total Loans	$	1,577,381	100.0	%	$	1,427,635	100.0	%	$	1,296,865	100.0	%	$	663,852	100.0	%	$	630,684	100.0	%

The following schedule sets forth maturities based on remaining scheduled repayments of principal for commercial and commercial real estate loans listed above as of December 31, 2017:

Types of Loans	1 Year or less		1 to 5 Years		Over 5 Years
Commercial	$	18,553	$	105,964	$	95,456
Commercial Real Estate	$	33,628	$	78,650	$	400,224
Agricultural	$	3,056	$	23,871	$	136,160

The amounts of commercial, commercial real estate and agricultural loans as of December 31, 2017, based on remaining scheduled repayments of principal, are shown in the following table:

Loan Sensitivities	1 Year or less		Over 1 Year		Total
Floating or Adjustable Rates of Interest	$	34,619	$	589,883	$	624,502
Fixed Rates of Interest		20,618		250,442		271,060
Total Loans	$	55,237	$	840,325	$	895,562

Total loans were $1.6 billion at year-end 2017, compared to $1.4 billion at year-end 2016.  Loans grew 9% organically during the past twelve months.  The organic increase in loans is a direct result of Farmers’ 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, agricultural, residential real estate and commercial loan

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portfolios.  Loans comprised 77.7% of the Bank’s average earning assets in 2017, compared to 76.3% in 2016.  The Company has also experienced growth in its originated loans portfolio as a result of loans previously acquired from earlier bank mergers being renewed and recorded into the originated book.The product mix in the loan portfolio includes commercial loans comprising 13.9%, residential real estate loans 29.7%, commercial real estate loans 32.5%, consumer loans 13.5% and agricultural loans 10.4% at December 31, 2017, compared with 14.3%, 30.1%, 31.2%, 15.3% and 9.1%, respectively, at December 31, 2016.

Loans contributed 84.3% of total taxable equivalent interest income in 2017 and 84.9% in 2016.  Loan yields were 4.73% in 2017, 38 basis points greater than the average rate for total earning assets.  Management recognizes that while the loan portfolio holds some of the Bank’s’ highest yielding assets, it is inherently the most risky portfolio.  Accordingly, management attempts to balance credit risk versus return with conservative credit standards.  Management has developed and maintains comprehensive underwriting guidelines and a loan review function that monitors credits during and after the approval process.  To minimize risks associated with changes in the borrower’s future repayment capacity, the Bank generally requires scheduled periodic principal and interest payments on all types of loans and normally requires collateral. Commercial loans at December 31, 2017 increased 7.6% from year-end 2016 with outstanding balances of $220.0 million.  The Bank’s commercial loans are granted to customers within the immediate trade area of the Bank.  The mix is diverse, covering a wide range of borrowers, business types and local municipalities.  The Bank monitors and controls concentrations within a particular industry or segment of the economy.  These loans are made for purposes such as equipment purchases, capital and leasehold improvements, the purchase of inventory, general working capital and small business lines of credit.

Residential real estate mortgage loans increased to $468.9 million at December 31, 2017, compared to $430.2 million in 2016.  Farmers originated both fixed rate and adjustable rate mortgages during 2017.  Fixed rate terms are generally limited to fifteen year terms while adjustable rate products are offered with maturities up to thirty years.

Commercial real estate loans increased from $446.0 million at December 31, 2016 to $512.5 million at December 31, 2017, an increase of $66.5 million or 14.9%.  The Company’s commercial real estate loan portfolio includes loans for owner occupied and non-owner occupied real estate.  These loans are made to finance properties such as office and industrial buildings, hotels and retail shopping centers.

The growth in the commercial and commercial real estate loan portfolios was consistent with the improvements in the local economy.  Several new projects announced in the Company’s market area, along with decreased levels of unemployment have led small business owners to expand or make additional investments in their operations.

Agricultural loans increased from $129.0 million in 2016 to $163.1 million in 2017, an increase of $34.1 million or 26.4%.  The Company’s agricultural loan portfolio contains a diverse mix of dairy, crops, land, poultry and cattle loans.  

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Summary of Loan Loss Experience

The following is an analysis of the allowance for loan losses for the periods indicated:

Years Ended December 31,	2017			2016			2015			2014			2013
Balance at Beginning of Year	$	10,852		$	8,978		$	7,632		$	7,568		$	7,629
Charge-Offs:
Commercial Real Estate		(207	)		(349	)		(536	)		(151	)		(505	)
Commercial		(375	)		(245	)		(290	)		(185	)		(99	)
Residential Real Estate		(162	)		(188	)		(320	)		(585	)		(326	)
Consumer		(2,542	)		(2,019	)		(2,058	)		(2,213	)		(1,723	)
Total Charge-Offs		(3,286	)		(2,801	)		(3,204	)		(3,134	)		(2,653	)
Recoveries on Previous Charge-Offs:
Commercial Real Estate		592			15			130			125			171
Commercial		66			45			9			29			262
Residential Real Estate		100			112			122			77			47
Consumer		641			633			779			1,087			822
Total Recoveries		1,399			805			1,040			1,318			1,302
Net Charge-Offs		(1,887	)		(1,996	)		(2,164	)		(1,816	)		(1,351	)
Provision For Loan Losses		3,350			3,870			3,510			1,880			1,290
Balance at End of Year	$	12,315		$	10,852		$	8,978		$	7,632		$	7,568
Ratio of Net Charge-offs to Average Loans Outstanding		0.13	%		0.15	%		0.22	%		0.28	%		0.23	%
Allowance for Loan Losses/Total Loans		0.78			0.76			0.69			1.15			1.20

Provisions charged to operations amounted to $3.4 million in 2017, compared to $3.9 million in 2016, a decrease of $520 thousand.  This decrease is primarily due to the lower level of net charge-offs in 2017 and the decrease in past due and nonperforming loans.  Net charge-offs for the year ended December 31, 2017 were $1.9 million, $109 thousand less than net charge-offs for the year ended December 31, 2016.  The allowance for loan losses to total loans increased from 0.76% at December 31, 2016 to 0.78% at December 31, 2017.  When the acquired loans from the NBOH and Tri-State mergers are excluded the ratio is 0.97% at December 31, 2017 and 1.03% at December 31, 2016, and compares similarly with the periods prior to 2015 presented in the above table.  Additionally, when loans collectively evaluated for impairment, which excludes acquired loans, are compared to the allowance for loan losses for loans collectively evaluated for impairment the ratio is 0.96% for the year ended December 31, 2017, compared to 1.01% for the year ended December 31, 2016.  Nonperforming loans to total loans decreased from 0.57% at December 31, 2016 to 0.49% at December 31, 2017.  In determining the estimate of the allowance for loan losses, management computes the historical loss percentage based upon the loss history of the past 12 quarters.  The Company believes that using a loss history of the previous 12 quarters helps mitigate volatility in the timing of charge-offs and better reflects probable incurred losses.

The provision for loan losses charged to operating expense 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 charge-off 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.

The allowance for loan losses increased $1.5 million during the year.  Aside from the various credit quality metrics discussed above, another reason for the increase in the current year allowance for loan losses was an increase in the size of the loan portfolio.  Loan growth in 2017 amounted to 10.5%.  

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At December 31, 2017, commercial loans collectively evaluated for impairment totaled $225.3 million with an allowance allocation of $2.0 million compared to commercial loans collectively evaluated for impairment of $195.1 million with an allowance for loan losses of $1.8 million at December 31, 2016.  The commercial loan portfolio experienced a provision of $446 thousand, compared to a $701 thousand provision in 2016.  Impaired loans are carried at the fair value of the underlying collateral, less estimated disposition costs, if repayment of the loan is expected to be solely dependent on the sale of the collateral.  Otherwise, impaired loans are carried at the present value of expected cash flows.

Typically, commercial and commercial real estate loans are identified as impaired when they become ninety days past due, or earlier if management believes it is probable that the Company will not collect all amounts due under the terms of the loan agreement.  When Farmers identifies a loan as impaired and also concludes that the loan is collateral dependent, Farmers performs an internal collateral valuation as an interim measure.  Farmers typically obtains an external appraisal to validate its internal collateral valuation as soon as is practical and adjusts the associated specific loss reserve, if necessary.

The ratio of the allowance for loan losses to non-performing loans at December 31, 2017 improved to 160.04%, compared to 132.83% at December 31, 2016.  Increases in nonaccrual loans in the residential real estate loan and consumer loan portfolios were offset by decreases in the commercial real estate and agricultural loan portfolios.  The balance in the allowance for loan losses increased in 2017, with the increased loan portfolio size, to $12.3 million compared to $10.9 million in 2016.  

Nonperforming Assets
December 31,	2017			2016			2015			2014			2013
Nonaccrual loans:
Commercial Real Estate	$	717		$	1,410		$	3,803		$	3,273		$	3,117
Commercial		1,192			1,361			1,609			1,645			1,993
Residential Real Estate		4,038			2,636			3,116			2,881			2,864
Consumer		660			396			457			126			363
Agricultural		56			686			73			83			94
Total Nonaccrual Loans	$	6,663		$	6,489		$	9,058		$	8,008		$	8,431
Loans Past Due 90 Days or More		1,032			1,681			1,387			473			646
Total Nonperforming Loans	$	7,695		$	8,170		$	10,445		$	8,481		$	9,077
Other Real Estate Owned		171			482			942			148			171
Total Nonperforming Assets	$	7,866		$	8,652		$	11,387		$	8,629		$	9,248
Loans modified in troubled debt restructurings	$	4,980		$	7,007		$	9,325		$	8,110		$	8,280
TDRs included in Nonaccrual Loans	$	2,624		$	3,113		$	4,733		$	1,436		$	1,957
Percentage of Nonperforming Loans to Total Loans		0.49	%		0.57	%		0.81	%		1.28	%		1.44	%
Percentage of Nonperforming Assets to Total Assets		0.36	%		0.44	%		0.61	%		0.76	%		0.81	%
Loans Delinquent 30-89 days		10,191			12,746			9,129			5,426			3,658
Percentage of Loans Delinquent 30-89 days to    Total Loans		0.65	%		0.89	%		0.70	%		0.82	%		0.58	%

The Company has forgone interest income of approximately $264 thousand from nonaccrual loans as of December 31, 2017 that would have been earned, over the life of the loans, if all loans had performed in accordance with their original terms.

Net charge-offs as a percentage of average loans outstanding decreased from 0.15% for 2016 to 0.13% for 2017 as a result of the larger loan portfolio and improved loan quality.  Net charge-offs decreased from $2.0 million in 2016 to $1.9 million in 2017.  An increase in gross charge-offs was experienced in the consumer and commercial loan portfolios of $523 thousand and $130 thousand respectively, but those were offset by decreases in the commercial real estate and residential real estate loan portfolios of $142 thousand and $26 thousand, respectively.

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The following table summarizes the Company’s allocation of the allowance for loan losses for the past five years:

December 31,	2017					2016					2015					2014					2013
			Loansto					Loans to					Loans to					Loans to					Loans to
	Amount		Total Loans			Amount		Total Loans			Amount		Total Loans			Amount		Total Loans			Amount		Total Loans
Commercial Real Estate	$	4,260		40.0	%	$	3,577		37.4	%	$	3,127		37.5	%	$	2,676		33.5	%	$	2,752		34.4	%
Commercial		2,011		16.8			1,874		17.2			1,373		17.8			1,420		18.1			1,219		16.7
Residential Real Estate		2,521		29.7			2,205		30.1			1,845		30.4			1,689		27.7			1,964		27.0
Consumer		2,848		13.5			2,766		15.3			2,160		14.3			1,663		20.7			1,419		21.9
Unallocated		675		0			430		0			473		0			184		0			214		0
	$	12,315		100.0	%	$	10,852		100.0	%	$	8,978		100.0	%	$	7,632		100.0	%	$	7,568		100.0	%

The allowance allocated to each of the four loan categories should not be interpreted as an indication that charge-offs in 2017 will occur in the same proportions or that the allocation indicates future charge-off trends.  The allowance allocated to the one-to-four family real estate loan category and the consumer loan category is based upon the Company’s allowance methodology for homogeneous loans, and increases and decreases in the balances of those portfolios.  In previous years, the indirect installment loan category has represented the largest percentage of loan losses.  The consumer loan category represents approximately 13.5% of total loans and in 2017, the gross charge-offs accounted for 77.4% of the losses of the entire loan portfolio.  For the commercial loan category, which represents 16.8% of the total loan portfolio, management relies on the Bank’s internal loan review procedures and allocates accordingly based on loan classifications.  The gross charge-offs in the commercial real estate portfolio, which represents 40.0% of the total portfolio, was $207 thousand for 2017.

There were no loans other than those identified above, that management has known information about possible credit problems of borrowers and their ability to comply with the loan repayment terms.  Management is actively monitoring certain borrowers’ financial condition and loans which management wants to more closely monitor due to special circumstances.  These loans and their potential loss exposure have been considered in management’s analysis of the adequacy of the allowance for loan losses.

Loan Commitments and Lines of Credit

In the normal course of business, the Bank has extended various commitments for credit. Commitments for mortgages, revolving lines of credit and letters of credit generally are extended for a period of one month up to one year.  Normally, no fees are charged on any unused portion, but an annual fee of two percent is charged for the issuance of a letter of credit.

As of December 31, 2017, there were no concentrations of loans exceeding 10% of total loans that are not disclosed as a category of loans.  As of that date, there were also no other interest-earning assets that are either nonaccrual, past due, restructured or non-performing.

Investment Securities

The investment securities portfolio increased $23.3 million in 2017.  This increase is a result of maintaining the security portfolio’s at a constant level, as a percentage of total assets, during 2017’s growth in assets.  The Company’s investment strategy is to maintain a diverse investment security portfolio with a higher concentration in tax-free municipal securities and mortgage-backed securities that are issued by U.S. Government sponsored enterprises.  Farmers sold $54.5 million in securities in 2017, resulting in net security gains of $4 thousand.  Farmers recognized market appreciation on faster paying mortgage-backed securities and lower rated municipal securities, and reinvested in new mortgage-backed securities and higher rated municipal securities to further diversify the securities portfolio.  During 2014, the Company created the Investment subsidiary to hold municipal securities and take advantage of more favorable tax treatment.  At December 31, 2017, the Investment entity had a balance of $95.5 million in municipal securities.

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Farmers’ objective in managing the investment portfolio is to preserve and enhance corporate liquidity through investment in primarily short and intermediate term securities which are readily marketable and of the highest credit quality.  In general, investment in securities is limited to those funds the Bank feels it has in excess of funds used to satisfy loan demand and operating considerations.

The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions.  The Bank does not engage in any of the trading activities or own any of the types of funds regulated by the Volcker Rule.

Mortgage-backed securities are created by the pooling of mortgages and issuance of a security.  Mortgage-backed securities typically represent a participation interest in a pool of single-family or multi-family mortgages.  Prepayment estimates for mortgage-backed securities are performed at purchase to ensure that prepayment assumptions are reasonable considering the underlying collateral for the mortgage-backed securities at issue and current mortgage interest rates and to determine the yield and estimated maturity of the mortgage-backed security portfolio.  Prepayments that are faster than anticipated may shorten the life of the security and may result in faster amortization of any premiums paid and thereby reduce the net yield on such securities.  During periods of declining mortgage interest rates, refinancing generally increases and accelerates the prepayment of the underlying mortgages and the related security.  All holdings of mortgage-backed securities were issued by U.S. Government sponsored enterprises.

The following table shows the carrying value of investment securities by type of obligation at the dates indicated:

Type

December 31,	2017		2016		2015
U.S. Treasury securities	$	4,278	$	1,211	$	1,192
U.S. government sponsored enterprise debt securities		4,639		4,710		9,914
Mortgage-backed securities - residential and collateralized    mortgage obligations		177,571		190,375		223,752
Small Business Administration		14,212		16,706		19,299
Obligations of states and political subdivisions		191,003		155,303		138,723
Equity securities		394		351		298
Corporate bonds		1,234		1,339		1,134
	$	393,331	$	369,995	$	394,312

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A summary of debt securities held at December 31, 2017 classified according to maturity and including weighted average yield for each range of maturities is set forth below:

Type and Maturity Grouping	December 31, 2017
	Fair Value		Weighted Average Yield (1)
U.S. Treasury securities
Maturing within one year	$	3,070		1.07	%
Maturing after one year but within five years		693		1.74	%
Maturing after five years but within ten years		515		1.94	%
Total U.S. Treasury securities	$	4,278		1.29	%
U.S. government sponsored enterprise debt securities
Maturing within one year	$	748		1.37	%
Maturing after one year but within five years		3,123		1.68	%
Maturing after five years but within ten years		675		2.73	%
Maturing after ten years		93		2.25	%
Total U.S. government sponsored enterprise debt securities	$	4,639		1.80	%
Mortgage-backed securities - residential and collateralized mortgage    obligations (2)
Maturing within one year	$	24,318		2.37	%
Maturing after one year but within five years		70,713		2.39	%
Maturing after five years but within ten years		49,044		2.43	%
Maturing after ten years		33,496		2.70	%
Total mortgage-backed securities	$	177,571		2.45	%
Small Business Administration
Maturing within one year	$	16		3.49	%
Maturing after one year but within five years		15		3.42	%
Maturing after five years but within ten years		14,181		2.08	%
Total small business administration	$	14,212		2.08	%
Obligations of states and political subdivisions
Maturing within one year	$	14,861		2.62	%
Maturing after one year but within five years		43,090		3.10	%
Maturing after five years but within ten years		120,473		3.93	%
Maturing after ten years		12,579		3.78	%
Total obligations of states and political subdivisions	$	191,003		3.62	%
Corporate bonds
Maturing within one year	$	350		1.72	%
Maturing after one year but within five years		679		1.94	%
Maturing after five years but within ten years		205		2.71	%
Total other securities	$	1,234		1.99	%

(1) The weighted average yield has been computed by dividing the total contractual interest income adjusted for amortization of premium or accretion of discount over the life of the security by the par value of the securities outstanding.  The weighted average yield of tax-exempt obligations of states and political subdivisions has been calculated on a fully taxable equivalent basis.  The amounts of adjustments to interest which are based on the new statutory tax rate of 21% as written in the Tax Cuts and Jobs Act were $81 thousand, $263 thousand, $931 and $101 thousand for the four ranges of maturities.

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(2) Payments based on contractual maturity.

Premises and Equipment

Premises and equipment had a net decrease of $939 thousand in 2017 as a result of the sale of land and bank premises amounting to $439 thousand and depreciation of $1.6 million.  This was offset by new additions of premises and equipment amounting to $1.1 million.

Deposits

Deposits represent the Company’s principal source of funds.  The deposit base consists of demand deposits, savings and money market accounts and other time deposits.  During the year, the Company’s average total deposits increased from $1.468 billion in 2016 to $1.559 billion in 2017, representing an increase of 6.2%.  Noninterest demand deposits increased $42.2 million in 2017.  Average interest bearing demand deposits increased $71.4 million, which was offset by a decrease in savings deposits of $19.5 million since December 31, 2016.  With interest rates continuing to be low in 2017, customers have little incentive to commit funds to term deposit accounts.  Average time deposits had a modest decrease of $2.7 million in 2017.  The Company’s focus is on core deposit growth and Farmers will continue to price deposit rates to remain competitive within the market and to retain customers.  At December 31, 2017, core deposits – savings and money market accounts, time deposits less than $250 thousand, demand deposits and interest bearing demand deposits represented approximately 96.4% of total deposits.

Bank Owned Life Insurance

Farmers’ owns bank owned life insurance policies on the lives of certain members of management.  The purpose of this investment is to help fund the costs of employee benefit plans.  The cash surrender value of these policies was $33.9 million at December 31, 2017, compared to $30.0 million at December 31, 2016.

Borrowings

Average short-term borrowings increased $59.2 million or 28.0% since December 31, 2016 as a result of loan growth outpacing deposit growth in 2017.  Most of the increase was in short-term Federal Home Loan Advances (the “FHLB”).  Average Long-term borrowings decreased $10.1 million or 51.0%, as maturing FHLB advances were refinanced with short-term advances to capitalize on the favorable interest rates.  See Note 10 and 11 within Item 8 of this Annual report on Form 10-K for additional detail.

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Contractual Obligations, Commitments, Contingent Liabilities and Off-Balance Sheet Arrangements

The following table presents, as of December 31, 2017, the Company’s significant fixed and determinable contractual obligations by payment date.  The payment amounts represent those amounts contractually due to the recipient and do not include any unamortized premiums or discounts or other similar carrying value adjustments.  Further discussion of the nature of each obligation is included in the referenced note to the consolidated financial statements.

Commitments
12/31/2017
	Note
	Ref.	2018		2019		2020		2021		2022		Thereafter
Deposits without maturity		$	1,340,814
Certificates of deposit	9		92,678		46,243		35,619		55,086		20,424		13,855
Repurchase agreements	10		74,215
Short-term borrowed funds	10		350
Short-term FHLB advances	10		215,000
Long-term borrowings	11		1,075		931		860		792		729		2,607
Operating leases	7		425		419		384		380		270		973

There is also a $3 million additional commitment to SBIC investment funds over the next several years.  The payments have no predetermined due dates at year end 2017.  Note 12 to the consolidated financial statements discusses in greater detail other commitments and contingencies and the various obligations that exists under those agreements.  Examples of these commitments and contingencies include commitments to extend credit and standby letters of credit.

At December 31, 2017, the Company did not engage in derivatives or hedging contracts that may expose the Company to liabilities greater than the amounts recorded on the consolidated balance sheet.  Management’s policy is to not engage in derivatives contracts for speculative trading purposes.  The Company does utilize interest-rate swaps as a way of helping manage interest rate risk and not as derivatives for trading purposes.  See Note 20 within Item 8 of this Annual report on Form 10-K for additional detail.

Capital Resources

Total Stockholders’ Equity increased 13.5% from $213.2 million at December 31, 2016 to $242.1 million in 2017.  The increase is due to the net income addition to retained earnings less the amount of dividends paid and issuance of stock for the Monitor acquisition.  During the year, shareholders received a total of $0.22 per share cash dividends paid in the past four quarters, a 38% increase compared to the $0.16 cash dividend per share paid in 2016.  Book value increased 11.6% from $7.88 per share at December 31, 2016 to $8.79 per share at December 31, 2017.  The Company’s tangible book value also increased from $6.21 per share at December 31, 2016 to $7.14 per share at December 31, 2017, an increase of 15.0%.    

The Bank, as a national chartered bank, is subject to the dividend restrictions set forth by the OCC.  The OCC must approve declaration of any dividends in excess of the sum of profits for the current year and retained net profits for the preceding two years (as defined).  Farmers and Farmers Bank are required to maintain minimum amounts of capital to total “risk weighted” assets, as defined by the banking regulators.  At December 31, 2017, under the new minimum capital requirements associated with the Basel Committee on capital and liquidity regulation (Basel III), Farmers Bank and Farmers are required to have minimum capital ratios.  Actual and minimum ratios are detailed in Note 14 of the Consolidated Financial Statements.  Farmers Bank and Farmers had capital ratios above the minimum levels at December 31, 2017 and 2016. At year-end 2017 and 2016, the most recent regulatory notifications categorized Farmers Bank as well capitalized under the regulatory framework for prompt corrective action.

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During 2013, the Federal banking regulators approved a final rule to implement 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, became 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.  The Bank has retained, through a one-time election, the prior treatment for most accumulated other comprehensive income, such that unrealized gains and losses on securities available for sale that did not affect regulatory capital amounts and ratios.  As mentioned in the prior paragraph, the Bank falls within the new regulatory capital ratio guidelines.

Critical Accounting Policies

The Company follows financial accounting and reporting policies that are in accordance with generally accepted accounting principles in the United States of America and conform to general practices within the banking industry.  Some of these accounting policies are considered to be critical accounting policies.  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 three accounting policies that are critical accounting policies and an understanding of these policies is necessary to understand the financial statements.  These policies relate to determining the adequacy of the allowance for loan losses, if there is any impairment of goodwill and other intangibles, and estimating the fair value of assets acquired and liabilities assumed in connection with any merger activity.  Additional information regarding these policies is included in the notes to the consolidated financial statements, including Note 1 (Summary of Significant Accounting Policies), Note 4 (Loans) and Note 2 (Business Combinations), and the section above captioned “Loan Portfolio.”  Management believes that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.

Farmers maintains an allowance for loan losses.  The allowance for loan losses is presented as a reserve against loans on the balance sheets.  Loan losses are charged off against the allowance for loan losses, while recoveries of amounts previously charged off are credited to the allowance for loan losses.  A provision for loan losses is charged to operations based on management’s periodic evaluation of adequacy of the allowance.  The provision for credit losses provides for probable losses on loans.

Estimating the amount of the allowance for loan losses requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change.  The loan portfolio represents the largest asset category on the consolidated balance sheets.  Management’s assessment of the adequacy of the allowance for loan losses considers individually impaired loans, pools of homogeneous loans with similar risk characteristics and other environmental risk factors.

Pools of homogeneous loans with similar risk characteristics are assessed for probable losses.  Probable losses are estimated through application of historical loss experience.  Historical loss experience data used to establish loss estimates may not precisely correspond to the current portfolio.  As a result, the historical loss experience used in the allowance analysis may not be representative of actual unrealized losses inherent in the portfolio.

Management also evaluates the impact of environmental factors which pose additional risks that may not adequately be addressed in the analyses described above.  Such environmental factors could include: levels of, and trends in, delinquencies and impaired loans, charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in lending policies and procedures including those for underwriting, collection, charge-off and recovery; experience, ability, and depth of lending management and staff; national and local economic trends and conditions; industry and geographic conditions; concentrations of credit such as, but not limited to, local industries, their employees and suppliers; or any other common risk factor that might affect loss experience across one or more components of the portfolio.  The determination of this component of the allowances requires considerable management judgment.  To the extent actual outcomes differ from management estimates, additional provision for credit losses could be required that could adversely affect earnings or financial position in future periods.  The “Loan Portfolio” section of this financial review includes a discussion of the factors driving changes in the allowance for loan losses during the current period.

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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 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 is estimated by reviewing the past and projected operating results for the subsidiaries and comparable industry information.  At December 31, 2017, on a consolidated basis, Farmers had intangibles of $7.2 million subject to amortization and $38.2 million of goodwill, which was not subject to periodic amortization.

Recent Accounting Pronouncements and Developments

Note 1 to the consolidated financial statements discusses new accounting policies adopted by Farmers during 2017 and the expected impact of accounting policies recently issued or proposed but not yet required to be adopted.  To the extent the adoption of new accounting standards materially affects financial condition, results of operations or liquidity, the impacts are discussed in the applicable sections of this financial review and notes to the consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Important considerations in asset/liability management are liquidity, the balance between interest rate sensitive assets and liabilities and the adequacy of capital.  Interest rate sensitive assets and liabilities are those which have yields on rates subject to change within a future time period due to maturity of the instrument or changes in market rates.  While liquidity management involves meeting the funds flow requirements of the Company, the management of interest rate sensitivity focuses on the structure of these assets and liabilities with respect to maturity and repricing characteristics.  Balancing interest rate sensitive assets and liabilities provides a means of tempering fluctuating interest rates and maintaining net interest margins through periods of changing interest rates.  The Company monitors interest rate sensitive assets and liabilities to determine the overall interest rate position over various time frames.

45

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 and 100 basis point decrease in market interest rates.  The assumptions and predictions include inputs to compute baseline net interest income, growth rates, expected changes in rates on interest bearing deposit accounts and loans, competition and various other factors that are difficult to accurately predict.

	2017			2016			ALCO
Changes In Interest Rate (basis points)	Result			Result			Guidelines
Net Interest Income Change
+300		-1.9	%		-0.1	%		15	%
+200		-1.0	%		0.2	%		10	%
+100		-0.5	%		0.3	%		5	%
-100		-3.3	%		-3.4	%		5	%
Net Present Value Of Equity Change
+300		-7.5	%		-1.3	%		20	%
+200		-3.7	%		0.6	%		15	%
+100		0.3	%		1.4	%		10	%
-100		-7.2	%		-4.0	%		10	%

All interest rate change results fall within policy limits for the year ended December 31, 2017 and 2016.  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.

With the largest amount of interest sensitive assets and liabilities maturing within twelve months, the Company monitors this area most closely.  Early withdrawal of deposits, prepayments of loans and loan delinquencies are some of the factors that can impact actual results in comparison to our simulation analysis.  In addition, changes in rates on interest sensitive assets and liabilities may not be equal, which could result in a change in net interest margin.

Interest rate sensitivity management provides some degree of protection against net interest income volatility.  It is not possible or necessarily desirable to attempt to eliminate this risk completely by matching interest sensitive assets and liabilities.  Other factors, such as market demand, interest rate outlook, regulatory restraint and strategic planning also have an effect on the desired balance sheet structure.

46

Item 8. Financial Statements and Supplementary Financial Data.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Farmers National Banc Corp. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(1) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of; our principal executive and principal financial officers and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control-Integrated Framework.  Based on that assessment, we believe that, as of December 31, 2017, our internal control over financial reporting is effective based on those criteria.

Crowe Horwath LLP has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017, as stated in their report dated March 6, 2018.

/s/ Kevin J. Helmick	/s/ Carl D. Culp
Kevin J. Helmick	Carl D. Culp
President and Chief Executive Officer	Senior Executive Vice President and Treasurer

47

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors of

Farmers National Banc Corp.

Canfield, Ohio

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Farmers National Banc Corp. (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.  We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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.  A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

48

with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Crowe Horwath LLP

Crowe Horwath LLP

We have served as the Company's auditor since 2003.

Cleveland, Ohio

March 6, 2018

49

CONSOLIDATED BALANCE SHEETS

(Table Dollar Amounts in Thousands except Per Share Data)

December 31,		2017			2016
ASSETS
Cash and due from banks	$	17,785		$	19,678
Federal funds sold and other		39,829			22,100
TOTAL CASH AND CASH EQUIVALENTS		57,614			41,778
Securities available for sale		393,331			369,995
Loans held for sale		272			355
Loans		1,577,381			1,427,635
Less allowance for loan losses		12,315			10,852
NET LOANS		1,565,066			1,416,783
Premises and equipment, net		22,286			23,225
Goodwill		38,201			37,164
Other intangibles		7,168			7,990
Bank owned life insurance		33,877			30,048
Other assets		41,254			38,775
TOTAL ASSETS	$	2,159,069		$	1,966,113
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	412,346		$	366,870
Interest-bearing		1,192,373			1,157,886
TOTAL DEPOSITS		1,604,719			1,524,756
Short-term borrowings		289,565			198,460
Long-term borrowings		6,994			15,036
Other liabilities		15,717			14,645
TOTAL LIABILITIES		1,916,995			1,752,897
Commitments and contingent liabilities (Note 12)
Stockholders' equity
Common Stock - Authorized 35,000,000 shares; issued 28,179,598 in   2017 and 27,713,811 in 2016		186,903			178,317
Retained earnings		59,208			42,547
Accumulated other comprehensive income (loss)		596			(2,791	)
Treasury stock, at cost; 635,550 shares in 2017 and 666,147 shares   in 2016		(4,633	)		(4,857	)
TOTAL STOCKHOLDERS' EQUITY		242,074			213,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,159,069		$	1,966,113

See accompanying notes

50

CONSOLIDATED STATEMENTS OF INCOME

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,		2017		2016		2015
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	69,934	$	63,109	$	44,657
Taxable securities		4,899		5,058		5,903
Tax exempt securities		4,763		3,650		2,951
Dividends		537		515		287
Federal funds sold and other interest income		394		166		29
TOTAL INTEREST AND DIVIDEND INCOME		80,527		72,498		53,827
INTEREST EXPENSE
Deposits		4,490		3,221		3,489
Short-term borrowings		2,167		689		177
Long-term borrowings		224		468		424
TOTAL INTEREST EXPENSE		6,881		4,378		4,090
NET INTEREST INCOME		73,646		68,120		49,737
Provision for loan losses		3,350		3,870		3,510
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		70,296		64,250		46,227
NONINTEREST INCOME
Service charges on deposit accounts		4,077		4,010		3,253
Bank owned life insurance income, including death benefits		831		814		702
Trust fees		6,431		6,235		6,156
Insurance agency commissions		2,407		1,560		569
Security gains		4		73		94
Retirement plan consulting fees		1,857		1,990		2,130
Investment commissions		919		1,210		1,172
Net gains on sale of loans		3,066		2,843		1,101
Debit card and EFT fees		3,089		2,661		1,882
Other operating income		1,370		1,848		1,247
TOTAL NONINTEREST INCOME		24,051		23,244		18,306
NONINTEREST EXPENSE
Salaries and employee benefits		34,759		31,908		26,638
Occupancy and equipment		6,292		6,615		5,452
State and local taxes		1,663		1,544		1,171
Professional fees		2,891		2,757		3,180
Merger related costs		888		563		6,392
Advertising		1,527		1,462		1,479
FDIC insurance		869		1,055		937
Intangible amortization		1,494		1,461		983
Core processing charges		2,880		2,699		2,176
Telephone and data		973		930		676
Other operating expenses		7,331		8,458		4,895
TOTAL NONINTEREST EXPENSE		61,567		59,452		53,979
INCOME BEFORE INCOME TAXES		32,780		28,042		10,554
INCOME TAXES		10,069		7,485		2,499
NET INCOME	$	22,711	$	20,557	$	8,055
EARNINGS PER SHARE:
Basic and Diluted	$	0.82	$	0.76	$	0.36

See accompanying notes.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,		2017			2016			2015
NET INCOME	$	22,711		$	20,557		$	8,055
Other comprehensive income (loss):
Net unrealized holding gains (losses) on available for sale    securities		5,107			(4,270	)		(1,403	)
Reclassification adjustment for gains realized in income		(4	)		(73	)		(94	)
Net unrealized holding gains (losses)		5,103			(4,343	)		(1,497	)
Income tax effect		(1,786	)		1,520			524
Unrealized holding gains (losses), net of reclassification and    tax		3,317			(2,823	)		(973	)
Change in funded status of post-retirement health plan		(55	)		(156	)		20
Income tax effect		19			55			(7	)
Change in funded status of post-retirement health plan, net of    tax		(36	)		(101	)		13
Other comprehensive income (loss), net of tax		3,281			(2,924	)		(960	)
TOTAL COMPREHENSIVE INCOME	$	25,992		$	17,633		$	7,095

See accompanying notes.

52

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,		2017			2016			2015
COMMON STOCK
Balance at beginning of year	$	178,317		$	176,287		$	106,021
Issued 18,928 treasury shares under the Long Term    Incentive Plan		(133	)		0			0
Issued 465,787 shares in 2017,  123,280 in 2016 and 8,559,472    in 2015 as part of business combinations		6,358			1,138			69,780
Stock compensation expense for unvested shares		2,361			892			486
Balance at end of year		186,903			178,317			176,287
RETAINED EARNINGS
Balance at beginning of year		42,547			26,316			20,944
Net income		22,711			20,557			8,055
Decrease as a result of shares issued under the Long Term    Incentive Plan		(5	)		0			0
Increase as a result of a contingent payment as part of a    business combination		73			0			0
Reclassification of disproportionate tax effects		(106	)		0			0
Dividends declared:
$.22 cash dividends per share in 2017, $.16 per share in    2016 and $.12 per share 2015		(6,012	)		(4,326	)		(2,683	)
Balance at end of year		59,208			42,547			26,316
ACCUMULATED OTHER COMPREHENSIVE INCOME    (LOSS)
Balance at beginning of year		(2,791	)		133			1,093
Reclassification of disproportionate tax effects		106			0			0
Other comprehensive income (loss)		3,281			(2,924	)		(960	)
Balance at end of year		596			(2,791	)		133
TREASURY STOCK, AT COST
Balance at beginning of year		(4,857	)		(4,689	)		(4,498	)
Issued 11,669 shares in contingent payments as part of a    business combination		85			0			0
Reissued 18,928 and 3,000 shares in 2017 and 2015 under the    Long Term Incentive Plan		139			0			22
Purchased 19,900 shares in 2016 and 26,800 shares in 2015		0			(168	)		(213	)
Balance at end of year		(4,633	)		(4,857	)		(4,689	)
TOTAL STOCKHOLDERS' EQUITY AT END OF YEAR	$	242,074		$	213,216		$	198,047

See accompanying notes.

53

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,	2017			2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	22,711		$	20,557		$	8,055
Adjustments to reconcile net income to net cash from operating    activities:
Provision for loan losses		3,350			3,870			3,510
Depreciation and amortization		3,139			3,667			2,751
Net amortization of securities		1,823			2,216			2,275
Security gains		(4	)		(73	)		(94	)
Loss (gain) on land and building sales, net		53			(238	)		0
Stock compensation expense		2,361			892			486
Loss on sale of other real estate owned		20			277			286
Earnings on bank owned life insurance		(831	)		(814	)		(702	)
Origination of loans held for sale		(56,810	)		(64,599	)		(46,201	)
Proceeds from loans held for sale		59,959			68,856			46,455
Net gains on sale of loans		(3,066	)		(2,843	)		(1,101	)
Net change in other assets and liabilities		(2,139	)		(7,273	)		(9,397	)
NET CASH FROM OPERATING ACTIVITIES		30,566			24,495			6,323
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for    sale		43,104			59,904			63,243
Proceeds from sales of securities available for sale		54,497			11,493			102,257
Purchases of securities available for sale		(114,600	)		(52,628	)		(72,683	)
Purchases of restricted stock		(842	)		(200	)		0
Loan originations and payments, net		(132,597	)		(133,248	)		(139,656	)
Proceeds from sale of other real estate owned		643			665			553
Purchase of bank owned life insurance		(3,000	)		0			(6,000	)
Proceeds from land and building sales		439			479			723
Additions to premises and equipment		(956	)		(788	)		(1,299	)
Net cash (paid) received in business combinations		16,203			(1,073	)		29,749
NET CASH FROM INVESTING ACTIVITIES		(137,109	)		(115,396	)		(23,113	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		45,377			115,709			(44,659	)
Net change in short-term borrowings		91,105			(27,372	)		91,159
Repayments of long-term borrowings		(8,091	)		(7,178	)		(3,228	)
New advances for long term borrowing		0			0			5,000
Cash dividends paid		(6,012	)		(4,326	)		(2,683	)
Repurchase of common shares		0			(168	)		(213	)
NET CASH FROM FINANCING ACTIVITIES		122,379			76,665			45,376
NET CHANGE IN CASH AND CASH EQUIVALENTS		15,836			(14,236	)		28,586
Beginning cash and cash equivalents		41,778			56,014			27,428
Ending cash and cash equivalents	$	57,614		$	41,778		$	56,014
Supplemental cash flow information:
Interest paid	$	6,754		$	4,316		$	4,047
Income taxes paid	$	8,800		$	9,410		$	2,620
Supplemental noncash disclosures:
Transfer of loans and property to other real estate owned	$	279		$	482		$	888
Issuance of stock for business combinations	$	6,358		$	1,138		$	69,780
Contingent consideration for business combination	$	85		$	880		$	0
Security purchases not settled	$	0		$	927		$	1,338

See accompanying notes.

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Table Dollar Amounts In Thousands except Per Share Data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include the accounts of Farmers National Banc Corp. and its wholly-owned subsidiaries, The Farmers National Bank of Canfield (“Bank”), Farmers Trust Company (“Trust”), National Associates, Inc. (“NAI”) and Farmers National Captive, Inc. (“Captive”).  Captive was formed during 2016 and is a wholly-owned insurance subsidiary of the Company.  The consolidated financial statements also include the accounts of the Farmers National Bank of Canfield’s subsidiaries; Farmers National Insurance (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”).  The Company acquired Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank in 2017 and First National Bank of Orrville (“First National Bank”) a subsidiary of National Bancshares Corporation (“NBOH”) and 1^st National Community Bank (“FNCB”) a subsidiary of Tri-State 1^st Banc, Inc. (“Tri-State”) during 2015 and consolidated all activity of these acquisitions within the Bank.  The Bank acquired Bowers Insurance Agency, Inc. (“Bowers”) and consolidated the activity of Bowers with Farmers National Insurance (“Insurance”) during 2016, see Note 2.  Together all entities are referred to as “the Company.” All significant intercompany balances and transactions have been eliminated in consolidation.

Nature of Operations: The Company provides full banking services, including wealth management services and mortgage banking activity, through the Bank.  As a national bank, the Bank is subject to regulation of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.  The primary area served by the Bank is the northeastern region of Ohio through thirty nine (39) locations and two branch location in southwestern Pennsylvania.  The Company provides trust services through its Trust subsidiary, retirement consulting services through its NAI subsidiary and insurance services through the Bank’s Insurance subsidiary.  Trust has a state-chartered bank license to conduct trust business from the Ohio Department of Commerce – Division of Financial Institutions.  The primary purpose of Investments is to invest in municipal securities.  Captive provides property and casualty insurance coverage to the Company and its subsidiaries.  Captive pools resources with thirteen other similar insurance subsidiaries of financial institutions to spread a limited amount of risk among the pool members and to provide insurance where not currently available or economically feasible in today’s insurance market place.

Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

Cash Flows: Cash and cash equivalents include cash on hand, deposits with other financial institutions and federal funds sold.  Generally, federal funds are purchased and sold for one-day periods.  Net cash flows are reported for loan and deposit transactions, short term borrowings and other assets and liabilities.

Securities Available for Sale: Debt securities are classified as available for sale when they might be sold before maturity.  Equity securities with readily determinable fair values are classified as available for sale.  Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount.  Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated.  Gains and losses on sales are recorded on the trade date and determined using the specific identification method.  Purchases are recorded on the trade date.

Management evaluates securities for other-than-temporary impairment (OTTI) on at least a quarterly basis, and more frequently when economic or market conditions warrant.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value

55

is recognized as impairment through earnings.  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) other-than-temporary impairment (OTTI) related to other factors, which is recognized in other comprehensive income.  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.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors.  Net unrealized losses, if any, are charged to earnings.

Mortgage loans held for sale are sold with or without servicing rights released.  Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses.  Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate.

Interest income is accrued on the unpaid principal balance.  Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.  Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection.  Consumer loans are typically charged off no later than 120 days past due.  Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

For all classes of loans, when interest accruals are discontinued, interest accrued but not received for loans placed on non-accrual is reversed against interest income.  Interest on such loans is thereafter recorded on a cash-basis or cost-recovery method, until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Credit Impaired Loans: The Company purchased loans that have shown evidence of credit deterioration since origination through the acquisition of First National Bank.  These loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses.  The Company estimates the amount and timing of expected cash flows for each loan, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan.  The excess of the loan’s contractual principal and interest over expected cash flows is not recorded.

Over the life of the loan, expected cash flows continue to be estimated.  If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses.  If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value.  The Company’s derivatives are interest-rate swap agreements, which are used as part of its asset and liability management strategy to help manage its interest rate risk position.  The Company does not use derivatives for trading or balance sheet hedging purposes.  The derivative transactions are considered instruments with no hedging designation, otherwise known as stand-alone derivatives.  Changes in the fair value of the derivatives are reported currently in earnings, as other noninterest income.

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Concentration of Credit Risk: There are no significant concentrations of loans to any one industry or customer.  However, most of the Company’s business activity is with customers located within Northeastern Ohio.  Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy of a ninecounty area.  Loans secured by real estate represent 69.8% of the total portfolio and changes related to the real estate markets are monitored by management.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred loan losses, increased by the provision for loan losses and decreased by charge-offs less recoveries.  The allowance is based on management’s judgment taking into consideration past loss experience, reviews of individual loans, current economic conditions and other factors considered relevant by management at the financial statement date.  While management uses the best information available to establish the allowance, future adjustments to the allowance may be necessary, which may be material, if economic conditions differ substantially from the assumptions used in estimating the allowance.  If additions to the original estimate of the allowance for loan losses are deemed necessary, they will be reported in earnings in the period in which they become reasonably estimable and probable.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

Acquired loans are individually evaluated and for those purchased loans without evidence of credit deterioration, management evaluates each reviewed loan using an internal grading system with a grade assigned to each loan at the date of acquisition.  To the extent that any purchased loan is not specifically reviewed, such loan is assumed to have characteristics similar to the characteristics of the acquired portfolio of purchased loans.  The grade for each purchased loan without evidence of credit deterioration is reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to the Company that provides material insight regarding the loan’s performance, the status of the borrower or the quality or value of the underlying collateral.  To the extent that current information indicates it is probable that the Company will collect all amounts according to the contractual terms thereof, such loan is not considered impaired and is not individually considered in the determination of the required allowance for loan losses.  To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered impaired and is considered in the determination of the required level of allowance.

In determining the day one fair values of purchased loans without evidence of credit deterioration at the date of acquisition, management includes (i) no carry-over of any previously recorded allowance for loan losses and (ii) an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest, given the risk profile and grade assigned to each loan.  This adjustment is accreted into earnings as a yield adjustment, using the effective yield method, over the remaining life of each loan.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

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Impairment is measured on a loan by loan basis for commercial and commercial real estate loans over $750 thousand, individually or in the aggregate, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures.  Non-real estate secured consumer loans in bankruptcy where debt has not been reaffirmed are considered troubled debt restructurings and are evaluated individually to ensure that accurate accounting treatment is in place.

The Company considers the guidance on troubled debt restructuring for individual consumer and residential loans when evaluating for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flow using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced for the most recent twelve quarters.  The formula for calculating the allowance for loan losses requires that the historical loss percentage be applied to homogeneous and all risk rated loans.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:

Commercial Loans. Commercial credit is extended to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other projects.  The majority of these borrowers are customers doing business within our geographic regions.  These loans are generally underwritten individually and secured with the assets of the company and the personal guarantee of the business owners.  Commercial loans are made based primarily on the historical and projected cash flow of the borrower and the underlying collateral provided by the borrower.

Commercial Real Estate Loans. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans.  These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property.  Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and property type.

Consumer Loans. Consumer loans are primarily comprised of loans made directly to consumers and indirectly through automobile dealerships.  These loans have a specific matrix which consists of several factors including debt to income, type of collateral and loan to collateral value, credit history and relationship with the borrower.  Consumer lending uses risk-based pricing in the underwriting process.

Residential Real Estate Loans. Residential mortgage loans represent loans to consumers for the purchase or refinance of a residence.  These loans are generally financed up to 15 years and in most cases, are extended to borrowers to finance their primary residence.  Real estate market values at the time of origination directly affect the amount of credit extended and, in the event of default, subsequent changes in these values may impact the severity of losses.

Servicing Rights:When mortgage loans are sold and servicing rights are retained, the servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.  Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.  The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service,

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the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses.  The Company compares the valuation model inputs and results to published industry data to validate the model results and assumptions.  All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non‑interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.  Servicing assets are evaluated for impairment based upon the fair value of the assets compared to carrying amount.  Any impairment is reported as a valuation allowance, to the extent that fair value is less than the capitalized amount for a grouping.  There was no valuation allowance impairment against servicing assets as of December 31, 2017 or 2016.

Servicing fee income is recorded when earned for servicing loans based on a contractual percentage of the outstanding principal or a fixed amount per loan.  The amortization of mortgage servicing rights is netted against loan servicing fee income.  Servicing fees, late fees and ancillary fees related to loan servicing are not considered significant for financial reporting.

Foreclosed Assets: 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.  If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  These assets are recorded in other assets on the balance sheets as other real estate owned (“OREO”).  OREO totaled $171 thousand at December 31, 2017 and $482 thousand at December 31, 2016.  Operating costs after acquisition are expensed.

Premises and Equipment: Land is carried at cost.  Premises and equipment are stated at cost, less accumulated depreciation.  Buildings and related components are depreciated using the straight-line method with useful lives ranging from 5 to 40 years.  Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 10 years.

Restricted Stock: The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  The Bank is also a member of and owns stock in the Federal Reserve Bank.  These stocks are carried at cost, classified as restricted securities included in other assets, and periodically evaluated for impairment based on ultimate recovery of par value.  Restricted stock totaled $10.5 million at December 31, 2017 and $9.6 million at December 31, 2016.  Both cash and stock dividends are reported as income.

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key officers.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows.  If impaired, the assets are recorded at fair value.

Goodwill and Other Intangible Assets: Goodwill resulting from a business combination is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but tested for impairment at least annually.  The Company has selected September 30 as the date to perform the annual goodwill impairment tests associated with the acquisition of the Trust, NAI, First National Bank, FNCB, Bowers and Monitor.  Intangible assets with definite useful lives are amortized over their estimated useful lives.  Goodwill is the only intangible asset with an indefinite life on the balance sheet.  Core deposit intangible assets arising from bank acquisitions are amortized over their estimated useful lives of 7 to 8 years.  Non-compete contracts are amortized on a straight line basis, over the term of the agreements.  Customer relationship and trade name intangibles are amortized over a range of 13 to 15 years on an accelerated method.

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Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees, based on the fair value of these awards at the date of grant.  The market price of the Company’s common stock at the grant date is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Retirement Plans: Employee 401(k) and profit sharing plan expense is the amount of matching and discretionary contributions.  Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service.

Earnings per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock equity awards.  Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss).  Other comprehensive income (loss) 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.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any matters currently that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank (“FRB”) was required to meet regulatory reserve and clearing requirements.  The Company had deposits with the FRB of $30.0 million at December 31, 2017 and $16.4 million at December 31, 2016.

Equity: Treasury stock is carried at cost.

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank and Trust to the holding company or by the holding company to shareholders.

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Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions as more fully disclosed in Note 6.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments: Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank, Trust and Retirement Consulting segments.  The Company discloses segment information in Note 21.

Adoption of New Accounting Standards and Newly Issued, Not Yet Effective Accounting Standards: During February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income(Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects and will improve the usefulness of information reported to financial statement users.  However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The standard takes effect for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  Early adoption of the amendments in this Update is permitted for public business entities for reporting periods for which financial statements have not yet been issued and for all other entities for reporting periods for which financial statements have not yet been made available for issuance.  The Company early adopted this ASU and the result was a reclass of $106 thousand from accumulated other comprehensive income to retained earnings and is reflected in the Consolidated Financial Statements as of December 31, 2017.

During April of 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.  Under current U.S. GAAP, a premium is typically amortized to the maturity date when a callable debt security is purchased at a premium, even if the holder is certain the call will be exercised.  As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.  The new standard shortens the amortization period for the premium to the earliest call date to more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument.  The standard takes effect for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  The Company does not plan to early adopt this ASU, which is permitted, including adoption in an interim period.  The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test.  Instead, under the new guidance, an entity is to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not plan on early adoption of this ASU.  The adoption of this guidance is not expected to have an impact on the Company's Consolidated Financial Statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.  Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.  Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.  Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances.  Additionally, the ASU amends the accounting for

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credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  ASU 2016-13 is effective for public companies for annual periods beginning after December 15, 2019, including interim periods within those fiscal years.  Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.  The Company has begun to accumulate historical credit information, established an internal committee and engaged a software provider in preparation for testing of the systems during 2019.  Adoption of ASU 2016-13 will happen on January 1, 2020.  Management has not determined the full impact the new standard will have on the Consolidated Financial Statements.

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09: Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted.  The Company adopted the ASU 2016-09 on January 1, 2017 which had no material impact on its Consolidated Financial Statements and disclosures.

In February 2016, FASB issued ASU 2016-02 (Topic 842): Leases.  The main objective of ASU 2016-02 is to provide users with useful, transparent and complete information about leasing transactions.  ASU 2016-02 requires the rights and obligations associated with leasing arrangements be reflected on the balance sheet to increase transparency and comparability among organizations.  Under the updated guidance, lessees will be required to recognize a right-to-use asset and a liability to make a lease payment and disclose key information about leasing arrangements.  ASU 2016-02 is effective for public companies for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.  The Company will adopt this ASU when required.  As disclosed in footnote 7, certain leases that the Company has in place could require the capitalization of $2.9 million on the balance sheet as an asset and a related liability in the same amount with no income statement effect.  Therefore the Company does not expect the adoption of this ASU to have a material impact to its Consolidated Financial Statements.

In January 2016, FASB issued ASU 2016-01: Financial Instruments – Overall (Subtopic 825-10):  Recognition and Measurement of Financial Assets and Financial Liabilities.  The main objective of ASU 2016-01 is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information.  ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments.  Some of the amendments in ASU 2016-01  include the following: 1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others.  The amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The Company adopted this ASU 2016-01 on January 1, 2018 and realized no material impact on its Consolidated Financial Statements.

In May 2014, FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606).  The ASU creates a new topic, Topic 606, to provide guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017.  The new guidance will be effective for the Company's year ending December 31, 2018 and has been adopted as of January 1, 2018. The use of the modified retrospective approach will be used for implementing this standard. Interest income is outside of the scope of the new standard and will not be impacted by the adoption of the standard. A review of the Company’s noninterest income has not

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resulted in a change in revenue recognition since adoption, nor is it expected to change revenue recognition prospectively in a significant way.

NOTE 2 - BUSINESS COMBINATIONS

On August 15, 2017, the Company completed the acquisition of Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank.  The transaction involved both cash and 465,787 shares of stock totaling $7.5 million.  Pursuant to the terms of the merger agreement, common shareholders of Monitor were entitled to elect to receive consideration in cash or in common shares, without par value, of the Farmers National Banc Corp., subject to an overall limitation of 85% of the Monitor common shares being exchanged for Farmers common shares and 15% exchanged for cash.  The per share cash consideration of $769.38 was equal to Monitor’s March 31 tangible book value multiplied by 1.25.  Based on the volume weighted average closing price of Farmers common shares for the 20 trading days ended August 11, 2017 of $14.04, the final stock exchange ratio was 54.80, resulting in an implied value per Monitor common share of $769.38.

Goodwill of $1.0 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $673 thousand is related to core deposits.

The following table summarizes the consideration paid for Monitor and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,154
Stock		6,358
Fair value of total consideration transferred	$	7,512
Fair value of assets acquired
Cash and due from financial institutions	$	17,673
Securities available for sale		3,057
Loans, net		19,315
Premises and equipment		192
Core deposit intangible		673
Other assets		272
Total assets acquired		41,182
Fair value of liabilities assumed
Deposits		34,586
Accrued interest payable and other liabilities		121
Total liabilities		34,707
Net assets acquired	$	6,475
Goodwill created		1,037
Total net assets acquired	$	7,512

Valuation of some assets acquired or created including but not limited to net loans and goodwill are preliminary and could be subject to change.  Any changes are not expected to be material.

On June 1, 2016, the Bank completed the acquisition of the Bowers, and merged all activity of Bowers with Insurance, the Bank’s wholly-owned insurance agency subsidiary.  The Bowers group is engaged in selling insurance, including commercial, farm, home, and auto property/casualty insurance and will help to meet the needs of all the Company’s customers.  The transaction involved both cash and 123,280 shares of stock totaling $3.2 million, including up to $1.2 million of future payments, contingent upon Bowers meeting performance targets, with an estimated fair value at the acquisition date of $880 thousand. The first of three contingent payments were made during 2017, totaling $316 thousand, which reduced the earnout payable to $564 thousand.  Subsequent to the

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payment, management conducted a valuation of the contingent consideration and found it necessary to reduce the future payment liability associated with the remaining two payments down to $200 thousand at year end 2017.  The $364 thousand was recorded as a reduction to acquisition related costs in the current year on the Consolidated Statements of Income as of December 31, 2017.  The Company conducts this valuation work annually.  The acquisition is part of the Company’s plan to increase the levels of noninterest income and to complement the existing insurance services currently being offered.

Goodwill of $1.8 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $1.6 million is related to client relationships, company name and noncompetition agreements.

The following table summarizes the consideration paid for Bowers and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,137
Stock		1,138
Contingent consideration		880
Fair value of total consideration transferred	$	3,155
Fair value of assets acquired
Cash	$	64
Premises and equipment		290
Other assets		34
Total assets		388
Fair value of liabilities assumed		124
Net assets acquired	$	264
Assets and liabilities arising from acquisition
Identified intangible assets		1,630
Deferred tax liability		(588	)
Goodwill created		1,849
Total net assets acquired	$	3,155

The following table presents pro forma information as if the above acquisitions that occurred in 2016 and 2017 actually took place at the beginning of 2016.  The pro forma information includes adjustments for merger related costs, amortization of intangibles arising from the transaction and the related income tax effects.  The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effective on the assumed date.

	2017		2016
Net interest income	$	74,409	$	69,341
Net income	$	22,776	$	20,661
Basic and diluted earnings per share	$	0.83	$	0.77

On October 1, 2015, the Company completed the acquisition of Tri-State, the parent company of FNCB.  The transaction involved both cash and 1,296,517 shares of stock totaling $14.3 million.  Pursuant to the terms of the merger agreement, common shareholders of Tri-State received 1.747 common shares, without par value, of the Company or $14.20 in cash, for each common share of Tri-State, subject to proration provisions specified in the merger agreement that provide for a targeted aggregate split of total consideration consisting of 75% shares of

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Farmers’ common stock and 25% cash.  Preferred shareholders of Tri-State received $13.60 in cash for each share of Series A Preferred Stock, without par value, of Tri-State.

Goodwill of $3.0 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $1.2 million is related to core deposits.

On June 19, 2015, the Company completed the acquisition of all outstanding stock of NBOH, the parent company of First National Bank of Orrville.  The transaction involved both cash and 7,262,955 shares of stock totaling $74.8 million.  First National Bank of Orrville branches became branches of Farmers Bank.  Pursuant to the Agreement, each shareholder of NBOH received 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 NBOH being exchanged for stock and 20% for cash.

Goodwill of $26.7 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $4.4 million is related to core deposits.

NOTE 3 - SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2017 and 2016 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2017	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	8,986	$	0	$	(69	)	$	8,917
State and political subdivisions			188,032		3,614		(643	)		191,003
Corporate bonds			1,238		4		(8	)		1,234
Mortgage-backed securities - residential			161,635		419		(1,604	)		160,450
Collateralized mortgage obligations			17,898		0		(777	)		17,121
Small Business Administration			14,608		0		(396	)		14,212
Equity securities			179		216		(1	)		394
Totals		$	392,576	$	4,253	$	(3,498	)	$	393,331

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2016	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	5,970	$	5	$	(54	)	$	5,921
State and political subdivisions			157,014		1,049		(2,760	)		155,303
Corporate bonds			1,343		4		(8	)		1,339
Mortgage-backed securities - residential			171,215		1,019		(2,552	)		169,682
Collateralized mortgage obligations			21,397		1		(705	)		20,693
Small Business Administration			17,236		0		(530	)		16,706
Equity securities			168		185		(2	)		351
Totals		$	374,343	$	2,263	$	(6,611	)	$	369,995

65

The proceeds from sales of available-for-sale securities and the associated gains and losses were as follows:

		2017			2016			2015
Proceeds	$	54,497		$	11,493		$	102,257
Gross gains		727			389			908
Gross losses		(723	)		(316	)		(814	)

The tax provision related to these net realized gains was $2 thousand, $26 thousand and $33 thousand respectively.

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.

Available for sale		December 31, 2017
		Amortized
Maturity		Cost		Fair Value
Within one year		$	19,061	$	19,030
One to five years			47,277		47,585
Five to ten years			119,195		121,866
Beyond ten years			12,723		12,673
Mortgage-backed securities, collateralized mortgage obligations and    Small Business Administration			194,141		191,783
	Totals	$	392,397	$	392,937

Securities with a carrying amount of $269 million at December 31, 2017 and $242 million at December 31, 2016 were pledged to secure public deposits and repurchase agreements. Trust had securities, with a carrying amount of $100 thousand, at year-end 2017 and 2016, pledged to qualify as a fiduciary in the State of Ohio.

In each year, there were no holdings of any other issuer that exceeded 10% of stockholders’ equity, other than the U.S. Government, its agencies and its sponsored entities.

The following table summarizes the investment securities with unrealized losses at December 31, 2017 and 2016 aggregated by major security type and length of time in a continuous unrealized loss position.

2017
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	3,970	$	(34	)	$	1,912	$	(35	)	$	5,882	$	(69	)
State and political subdivisions		33,188		(220	)		25,721		(423	)		58,909		(643	)
Corporate bonds		397		(3	)		383		(5	)		780		(8	)
Mortgage-backed securities - residential		40,072		(400	)		53,760		(1,204	)		93,832		(1,604	)
Collateralized mortgage obligations		1,701		(22	)		15,420		(755	)		17,121		(777	)
Small Business Administration		0		0			14,182		(396	)		14,182		(396	)
Equity securities		22		(1	)		0		0			22		(1	)
Total temporarily impaired	$	79,350	$	(680	)	$	111,378	$	(2,818	)	$	190,728	$	(3,498	)

66

2016
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	4,015	$	(54	)	$	502	$	0		$	4,517	$	(54	)
State and political subdivisions		92,560		(2,745	)		286		(15	)		92,846		(2,760	)
Corporate bonds		786		(8	)		0		0			786		(8	)
Mortgage-backed securities - residential		98,348		(1,823	)		29,743		(729	)		128,091		(2,552	)
Collateralized mortgage obligations		7,956		(108	)		10,972		(597	)		18,928		(705	)
Small Business Administration		8,770		(205	)		7,890		(325	)		16,660		(530	)
Equity securities		44		(2	)		0		0			44		(2	)
Total temporarily impaired	$	212,479	$	(4,945	)	$	49,393	$	(1,666	)	$	261,872	$	(6,611	)

The Company’s equity securities include local and regional bank holdings.   No other-than-temporary impairments were recognized during 2017, 2016 or 2015.  If an other-than-temporary impairment were to occur, the amount of the impairment recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it would be required to sell the security before recovery of its amortized cost basis.  The previous amortized cost basis less the impairment recognized in earnings becomes the new amortized cost basis of the investment.

As of December 31, 2017, the Company’s security portfolio consisted of 550 securities, 184 of which were in an unrealized loss position.  The majority of unrealized losses are related to the Company’s holdings in securities issued by state and political subdivisions, mortgage-backed securities - residential, collateralized mortgage obligations and Small Business Administration, as discussed below:

Securities issued by State and Political subdivisions

Unrealized losses on debt securities issued by state and political subdivisions have not been recognized into income.  At December 31, 2017 and 2016 all securities issued by state and political subdivisions have 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.

Mortgage-backed securities - residential

All of the Company’s holdings of mortgage-backed securities—residential at year end 2017 and 2016 were issued by U.S. Government sponsored enterprises.  Unrealized losses on mortgage-backed securities—residential have not been recognized into income.  Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities—residential 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 other-than-temporarily impaired at December 31, 2017 and 2016.

Collateralized mortgage obligations

The Company’s portfolio includes collateralized mortgage obligations issued by U.S. Government sponsored enterprises.  The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality.  The Company does not have the intent to sell these collateralized mortgage obligations and it is likely that it will not be required to sell the securities before their anticipated recovery.  The Company monitors all securities to ensure adequate credit support and as of December 31, 2017 and 2016, the Company believes there is no other-than-temporary impairment.

67

Small Business Administration

The Company’s holdings of Small Business Administration securities are issued and backed by the full faith and credit of the U.S. Government.  Unrealized losses on these Small Business Administration securities have not been recognized into income.  The Company does not consider these securities to be other-than-temporarily impaired at December 31, 2017 and 2016 because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

NOTE 4 - LOANS

Loans at year end were as follows:

	2017			2016
Originated loans:
Commercial real estate
Owner occupied	$	140,321		$	109,750
Non-owner occupied		199,080			165,861
Farmland		70,534			34,155
Other		89,025			70,823
Commercial
Commercial and industrial		193,347			171,145
Agricultural		32,587			24,598
Residential real estate
1-4 family residential		272,421			224,222
Home equity lines of credit		71,507			59,642
Consumer
Indirect		155,950			156,633
Direct		28,519			26,663
Other		8,876			7,611
Total originated loans	$	1,262,167		$	1,051,103
Acquired loans:
Commercial real estate
Owner occupied	$	53,031		$	60,928
Non-owner occupied		20,286			24,949
Farmland		47,754			54,204
Other		11,964			14,665
Commercial
Commercial and industrial		27,094			33,626
Agricultural		12,206			16,024
Residential real estate
1-4 family residential		96,759			112,015
Home equity lines of credit		28,755			34,795
Consumer
Direct		14,378			21,681
Other		128			247
Total acquired loans		312,355			373,134
Net deferred loan costs		2,859			3,398
Allowance for loan losses		(12,315	)		(10,852	)
Net loans	$	1,565,066		$	1,416,783

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Purchased credit impaired loans

As part of the NBOH acquisition in 2015 the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected.  The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

	2017		2016
Commercial real estate
Owner occupied	$	670	$	689
Non-owner occupied		387		436
Commercial
Commercial and industrial		1,072		1,213
Total outstanding balance	$	2,129	$	2,338
Carrying amount, net of allowance of $0 in 2017 and 2016	$	1,733	$	2,181

Accretable yield, or income expected to be collected, is shown in the table below:

	2017			2016
Beginning balance	$	247		$	323
New loans purchased		0			0
Accretion of income		(77	)		(76	)
Ending balance	$	170		$	247

The key assumptions considered include probability of default and the amount of actual prepayments after the acquisition date.  Prepayments affect the estimated life of the loans and could change the amount of interest income and principal expected to be collected.  In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary.  There were no adjustments to forecasted cash flows that impacted the allowance for loan losses for the years ended December 31, 2017 and 2016.

The following tables present the activity in the allowance for loan losses by portfolio segment for years ended December 31, 2017, 2016 and 2015:

December 31, 2017	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430	$	10,852
Provision for loan losses		298			446			378			1,983			245		3,350
Loans charged off		(207	)		(375	)		(162	)		(2,542	)		0		(3,286	)
Recoveries		592			66			100			641			0		1,399
Total ending allowance balance	$	4,260		$	2,011		$	2,521		$	2,848		$	675	$	12,315

December 31, 2016	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473		$	8,978
Provision for loan losses		784			701			436			1,992			(43	)		3,870
Loans charged off		(349	)		(245	)		(188	)		(2,019	)		0			(2,801	)
Recoveries		15			45			112			633			0			805
Total ending allowance balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430		$	10,852

69

December 31, 2015	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		857			234			354			1,776			289		3,510
Loans charged off		(536	)		(290	)		(320	)		(2,058	)		0		(3,204	)
Recoveries		130			9			122			779			0		1,040
Total ending allowance balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473	$	8,978

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of December 31, 2017 and 2016.  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:

December 31, 2017	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	0	$	4	$	158	$	0	$	0	$	162
Collectively evaluated for impairment		4,214		1,993		2,322		2,844		675		12,048
Acquired loans collectively evaluated    for impairment		46		14		41		4		0		105
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	4,260	$	2,011	$	2,521	$	2,848	$	675	$	12,315
Loans:
Loans individually evaluated for    impairment	$	658	$	260	$	4,559	$	59	$	0	$	5,536
Loans collectively evaluated for    impairment		497,168		225,312		339,143		198,370		0		1,259,993
Acquired loans		131,926		38,503		125,182		14,507		0		310,118
Acquired with deteriorated credit    quality		948		786		0		0		0		1,734
Total ending loans balance	$	630,700	$	264,861	$	468,884	$	212,936	$	0	$	1,577,381

70

December 31, 2016	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	86	$	111	$	52	$	0	$	0	$	249
Collectively evaluated for impairment		3,491		1,763		2,153		2,766		430		10,603
Acquired loans collectively evaluated    for impairment		0		0		0		0		0		0
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	3,577	$	1,874	$	2,205	$	2,766	$	430	$	10,852
Loans:
Loans individually evaluated for    impairment	$	3,457	$	477	$	3,308	$	96	$	0	$	7,338
Loans collectively evaluated for    impairment		376,632		195,146		280,215		196,081		0		1,048,074
Acquired loans		153,228		48,536		146,672		21,923		0		370,359
Acquired with deteriorated credit    quality		968		896		0		0		0		1,864
Total ending loans balance	$	534,285	$	245,055	$	430,195	$	218,100	$	0	$	1,427,635

71

The following tables present information related to impaired loans by class of loans as of and for years ended December 31, 2017, 2016 and 2015.  The recorded investment in loans excludes accrued interest receivable due to immateriality.

December 31, 2017	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	659	$	658	$	0	$	767	$	10
Non-owner occupied		0		0		0		68		2
Farmland		0		0		0		12		0
Commercial
Commercial and industrial		214		192		0		184		4
Agricultural		0		0		0		10		0
Residential real estate
1-4 family residential		2,923		2,697		0		2,343		138
Home equity lines of credit		341		319		0		299		15
Consumer		145		59		0		74		11
Subtotal		4,282		3,925		0		3,757		180
With an allowance recorded:
Commercial real estate
Owner occupied		0		0		0		134		6
Non-owner occupied		0		0		0		640		28
Farmland		0		0		0		63		0
Commercial
Commercial and industrial		68		68		4		71		4
Agricultural		0		0		0		50		0
Residential real estate
1-4 family residential		1,409		1,387		84		837		29
Home equity lines of credit		159		156		74		95		3
Consumer		0		0		0		2		0
Subtotal		1,636		1,611		162		1,892		70
Total	$	5,918	$	5,536	$	162	$	5,649	$	250

72

December 31, 2016	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,974	$	1,456	$	0	$	1,601	$	70
Non-owner occupied		332		331		0		334		5
Commercial
Commercial and industrial		205		184		0		641		15
Residential real estate
1-4 family residential		2,650		2,403		0		2,302		145
Home equity lines of credit		195		179		0		221		10
Consumer		205		96		0		97		13
Subtotal		5,561		4,649		0		5,196		258
With an allowance recorded:
Commercial real estate
Owner occupied		173		173		14		874		29
Non-owner occupied		1,118		1,118		30		1,283		67
Farmland		380		379		42		127		0
Commercial
Commercial and industrial		75		75		4		103		4
Agricultural		219		218		107		73		0
Residential real estate
1-4 family residential		661		642		51		828		36
Home equity lines of credit		84		84		1		85		4
Consumer		0		0		0		1		0
Subtotal		2,710		2,689		249		3,374		140
Total	$	8,271	$	7,338	$	249	$	8,570	$	398

73

December 31, 2015	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,956	$	2,436	$	0	$	2,080	$	106
Non-owner occupied		343		342		0		372		30
Commercial
Commercial and industrial		834		631		0		433		23
Residential real estate
1-4 family residential		2,575		2,310		0		2,174		147
Home equity lines of credit		283		268		0		260		15
Consumer		214		103		0		81		14
Subtotal		7,205		6,090		0		5,400		335
With an allowance recorded:
Commercial real estate
Owner occupied		1,597		1,595		379		2,008		70
Non-owner occupied		1,480		1,480		50		1,511		79
Commercial
Commercial and industrial		81		81		5		540		4
Residential real estate
1-4 family residential		769		749		61		919		39
Home equity lines of credit		87		87		2		96		4
Subtotal		4,014		3,992		497		5,074		196
Total	$	11,219	$	10,082	$	497	$	10,474	$	531

Cash basis interest income recognized and interest income recognized was materially equal for 2017, 2016 and 2015.

74

Nonaccrual loans and loans past due 90 days 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 December 31, 2017 and 2016:

	2017				2016
	Nonaccrual		LoansPastDue 90DaysorMore Still Accruing		Nonaccrual		LoansPastDue 90DaysorMore Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	501	$	0	$	958	$	0
Non-owner occupied		0		0		343		0
Farmland		45		0		58		0
Commercial
Commercial and industrial		249		0		400		0
Agricultural		2		0		12		0
Residential real estate
1-4 family residential		2,653		393		1,929		295
Home equity lines of credit		602		8		202		118
Consumer
Indirect		457		361		298		438
Direct		63		153		9		65
Other		0		14		0		16
Total originated loans	$	4,572	$	929	$	4,209	$	932
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	85	$	0
Non-owner occupied		216		0		0		0
Other		0		0		24		0
Farmland		0		0		380		0
Commercial
Commercial and industrial		943		19		961		0
Agricultural		9		0		236		0
Residential real estate
1-4 family residential		613		69		386		545
Home equity lines of credit		170		0		119		109
Consumer
Direct		140		15		89		95
Total acquired loans	$	2,091	$	103	$	2,280	$	749
Total loans	$	6,663	$	1,032	$	6,489	$	1,681

75

The following tables present the aging of the recorded investment in past due loans as of December 31, 2017 and 2016 by class of loans:

December 31, 2017	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
Originated loans:
Commercial real estate
Owner occupied	$	4	$	340	$	501	$	845	$	139,081	$	139,926
Non-owner occupied		0		0		0		0		198,588		198,588
Farmland		0		0		45		45		70,398		70,443
Other		0		0		0		0		88,703		88,703
Commercial
Commercial and industrial		292		3		249		544		192,335		192,879
Agricultural		74		0		2		76		32,605		32,681
Residential real estate
1-4 family residential		2,044		403		3,046		5,493		266,338		271,831
Home equity lines of credit		155		18		610		783		70,754		71,537
Consumer
Indirect		2,429		829		818		4,076		156,772		160,848
Direct		632		250		216		1,098		27,608		28,706
Other		115		11		14		140		8,736		8,876
Total originated loans:	$	5,745	$	1,854	$	5,501	$	13,100	$	1,251,918	$	1,265,018
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	0	$	0	$	53,051	$	53,051
Non-owner occupied		0		0		216		216		20,042		20,258
Farmland		454		0		0		454		47,301		47,755
Other		0		0		0		0		11,976		11,976
Commercial
Commercial and industrial		327		96		962		1,385		25,709		27,094
Agricultural		87		0		9		96		12,111		12,207
Residential real estate
1-4 family residential		858		77		682		1,617		95,144		96,761
Home equity lines of credit		161		0		170		331		28,424		28,755
Consumer
Direct		380		151		155		686		13,692		14,378
Other		0		1		0		1		127		128
Total acquired loans	$	2,267	$	325	$	2,194	$	4,786	$	307,577	$	312,363
Total loans	$	8,012	$	2,179	$	7,695	$	17,886	$	1,559,495	$	1,577,381

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December 31, 2016	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
Originated loans:
Commercial real estate
Owner occupied	$	0	$	0	$	958	$	958	$	108,475	$	109,433
Non-owner occupied		0		0		343		343		165,105		165,448
Farmland		0		0		58		58		34,057		34,115
Other		0		0		0		0		70,542		70,542
Commercial
Commercial and industrial		90		0		400		490		170,242		170,732
Agricultural		0		29		12		41		24,632		24,673
Residential real estate
1-4 family residential		3,368		356		2,224		5,948		217,752		223,700
Home equity lines of credit		77		37		320		434		59,248		59,682
Consumer
Indirect		2,844		696		736		4,276		157,437		161,713
Direct		744		213		74		1,031		25,815		26,846
Other		92		28		16		136		7,476		7,612
Total originated loans:	$	7,215	$	1,359	$	5,141	$	13,715	$	1,040,781	$	1,054,496
Acquired loans:
Commercial real estate
Owner occupied	$	8	$	205	$	85	$	298	$	60,630	$	60,928
Non-owner occupied		134		0		0		134		24,815		24,949
Farmland		83		0		380		463		53,741		54,204
Other		0		0		24		24		14,642		14,666
Commercial
Commercial and industrial		278		0		961		1,239		32,387		33,626
Agricultural		21		0		236		257		15,767		16,024
Residential real estate
1-4 family residential		1,556		504		931		2,991		109,027		112,018
Home equity lines of credit		152		9		228		389		34,406		34,795
Consumer
Direct		938		184		184		1,306		20,376		21,682
Other		100		0		0		100		147		247
Total acquired loans	$	3,270	$	902	$	3,029	$	7,201	$	365,938	$	373,139
Total loans	$	10,485	$	2,261	$	8,170	$	20,916	$	1,406,719	$	1,427,635

Troubled Debt Restructurings:

Total troubled debt restructurings were $5.0 million and $7.0 million at December 31, 2017 and 2016 respectively.  The Company has allocated $68 thousand and $101 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2017 and 2016, respectively.  There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at December 31, 2017 and 2016.  

During the years ending December 31, 2017, 2016 and 2015, 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 permanent increase of the recorded investment in the loan due to a protective advance to pay delinquent real estate taxes or advance new monies; an extension of an interest only period; a deferral of principal payments; or a legal concession.

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Troubled debt restructuring modifications involved a reduction of the notes stated interest rate in the range of 0.49% to 11.51%.  There were also extensions of the maturity dates on these and other troubled debt restructurings in the range of six months to 132 months.

The following tables present loans by class modified as troubled debt restructurings that occurred during the years ending December 31, 2017, 2016 and 2015:

			Pre- Modification		Post- Modification
December 31, 2017	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	910	$	917
Home equity lines of credit		10		234		234
Indirect		29		161		161
Total originated loans		54	$	1,305	$	1,312
Acquired loans:
Commercial
Commercial and industrial		1	$	13	$	13
Residential real estate
1-4 family residential		3		85		85
Home equity lines of credit		1		57		57
Consumer		2		55		55
Total acquired loans		7	$	210	$	210
Total loans		61	$	1,515	$	1,522

The troubled debt restructurings described above increased the allowance for loan losses by $75 thousand and resulted in charge offs of $75 thousand during the year ended December 31, 2017.

			Pre- Modification		Post- Modification
December 31, 2016	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	436	$	437
Home equity lines of credit		1		40		40
Indirect		26		182		182
Consumer		2		12		12
Total originated loans		44	$	670	$	671
Acquired loans:
Residential real estate
1-4 family residential		4		153		153
Home equity lines of credit		1		18		18
Consumer		2		40		40
Total acquired loans		7	$	211	$	211
Total loans		51	$	881	$	882

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The troubled debt restructurings described above increased the allowance for loan losses by $43 thousand and resulted in charge offs of $344 thousand during the year ended December 31, 2016.

			Pre- Modification		Post- Modification
December 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Commercial real estate
Owner occupied		2	$	801	$	801
Commercial
Commercial and industrial		1		8		8
Residential real estate
1-4 family residential		13		760		760
Home equity lines of credit		2		60		60
Indirect		12		104		104
Consumer		1		8		8
Total originated loans		31	$	1,741	$	1,741
Acquired loans:
Commercial
Commercial and industrial		2		957		957
Total loans		33	$	2,698	$	2,698

The troubled debt restructurings described above increased the allowance for loan losses by $101 thousand and resulted in charge offs of $129 thousand during the year ended December 31, 2015.

There were no loans for which there were payment defaults within twelve months following the modification of the troubled debt restructuring during the year December 31, 2017.  A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There were two commercial real estate loans for $1.2 million, one residential real estate loan for $1 thousand and one home equity line of credit for $10 thousand modified as troubled debt restructurings for which there were payment defaults within twelve months following the modification during the year December 31, 2016.  None of the loans were past due at December 31, 2016.  There was no effect on the provision for loan losses as a result of this default during 2016.

There was one commercial real estate loan for $40 thousand, one residential real estate loan for $1 thousand and one home equity line of credit for $11 thousand modified as troubled debt restructurings for which there were payment defaults within twelve months following the modification during the year December 31, 2015.  All three loans were past due at December 31, 2015.  There was no effect of the provision for loan losses as a result of this default during 2015.

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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.  They 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.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

December 31, 2017	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	137,913	$	442	$	1,571	$	139,926
Non-owner occupied		198,043		419		126		198,588
Farmland		70,354		44		45		70,443
Other		88,421		36		246		88,703
Commercial
Commercial and industrial		184,444		5,326		3,109		192,879
Agricultural		32,291		192		198		32,681
Total originated loans	$	711,466	$	6,459	$	5,295	$	723,220
Acquired loans:
Commercial real estate
Owner occupied	$	51,133	$	466	$	1,452	$	53,051
Non-owner occupied		19,823		63		372		20,258
Farmland		43,694		3,304		757		47,755
Other		11,299		567		110		11,976
Commercial
Commercial and industrial		25,286		2		1,806		27,094
Agricultural		11,200		554		453		12,207
Total acquired loans	$	162,435	$	4,956	$	4,950	$	172,341
Total loans	$	873,901	$	11,415	$	10,245	$	895,561

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December 31, 2016	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	106,448	$	490	$	2,495	$	109,433
Non-owner occupied		162,465		522		2,461		165,448
Farmland		34,057		0		58		34,115
Other		69,947		325		270		70,542
Commercial
Commercial and industrial		167,062		2,720		950		170,732
Agricultural		24,395		253		25		24,673
Total originated loans	$	564,374	$	4,310	$	6,259	$	574,943
Acquired loans:
Commercial real estate
Owner occupied	$	58,655	$	707	$	1,566	$	60,928
Non-owner occupied		23,577		1,195		177		24,949
Farmland		53,039		0		1,165		54,204
Other		14,060		464		142		14,666
Commercial
Commercial and industrial		30,543		311		2,772		33,626
Agricultural		14,856		685		483		16,024
Total acquired loans	$	194,730	$	3,362	$	6,305	$	204,397
Total loans	$	759,104	$	7,672	$	12,564	$	779,340

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses.  For residential, consumer and indirect 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 and indirect auto loans based on payment activity.  Nonperforming loans are loans past due 90 days and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
December 31, 2017	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	268,785	$	70,927	$	160,030	$	28,490	$	8,862
Nonperforming		3,046		610		818		216		14
Total originated loans	$	271,831	$	71,537	$	160,848	$	28,706	$	8,876
Acquired loans:
Performing		96,079		28,585		0		14,223		128
Nonperforming		682		170		0		155		0
Total acquired loans	$	96,761	$	28,755	$	0	$	14,378	$	128
Total loans	$	368,592	$	100,292	$	160,848	$	43,084	$	9,004

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	Residential Real Estate				Consumer
December 31, 2016	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	221,476	$	59,362	$	160,977	$	26,772	$	7,596
Nonperforming		2,224		320		736		74		16
Total originated loans	$	223,700	$	59,682	$	161,713	$	26,846	$	7,612
Acquired loans:
Performing		111,087		34,567		0		21,498		247
Nonperforming		931		228		0		184		0
Total acquired loans	$	112,018	$	34,795	$	0	$	21,682	$	247
Total loans	$	335,718	$	94,477	$	161,713	$	48,528	$	7,859

NOTE 5 – LOAN SERVICING

The Company began servicing loans upon the acquisition of First National Bank’s servicing portfolio in June 2015.  Mortgage loans serviced for others are not reported as assets.  The principal balances of these loans at year-end are as follows:

	2017		2016
Mortgage loan portfolio serviced for:
FHLMC	$	179,253	$	121,274

Custodial escrow balances maintained in connection with serviced loans were $1.4 million at December 31, 2017 and $961 thousand at December 31, 2016. 

Mortgage servicing rights is recorded on the balance sheets as other assets.  Activity for mortgage servicing rights for years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
Servicing rights:
Beginning balance	$	854		$	453		$	347
Additions		701			611			166
Amortization to expense		(313	)		(210	)		(60	)
Ending balance	$	1,242		$	854		$	453

There was no valuation allowance required for mortgage servicing rights at December 31, 2017, 2016 and 2015.

NOTE 6 - 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 used 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 years ended December 31, 2017 and 2016 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

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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 are summarized below:

	Fair Value Measurements at December 31, 2017 Using:
	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	$	8,917	$	0	$	8,917	$	0
State and political subdivisions		191,003		0		191,003		0
Corporate bonds		1,234		0		1,234		0
Mortgage-backed securities-residential		160,450		0		160,442		8
Collateralized mortgage obligations		17,121		0		17,121		0
Small Business Administration		14,212		0		14,212		0
Equity securities		394		394		0		0
Total investment securities	$	393,331	$	394	$	392,929	$	8
Loan yield maintenance provisions	$	653	$	0	$	653	$	0
Financial Liabilities
Interest rate swaps	$	653	$	0	$	653	$	0

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	Fair Value Measurements at December 31, 2016 Using:
	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	$	5,921	$	0	$	5,921	$	0
State and political subdivisions		155,303		0		155,303		0
Corporate bonds		1,339		0		1,339		0
Mortgage-backed securities-residential		169,682		0		169,670		12
Collateralized mortgage obligations		20,693		0		20,693		0
Small Business Administration		16,706		0		16,706		0
Equity securities		351		351		0		0
Total investment securities	$	369,995	$	351	$	369,632	$	12
Loan yield maintenance provisions	$	685	$	0	$	685	$	0
Financial Liabilities
Interest rate swaps	$	685	$	0	$	685	$	0

There were no significant transfers between Level 1 and Level 2 during 2017 or 2016.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31:

	Investment Securities Available-for-sale (Level 3)
	2017			2016			2015
Beginning Balance	$	12		$	15		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0			0
Repayments, calls and maturities		(4	)		(3	)		(1	)
Acquired and/or purchased		0			0			6
Ending Balance	$	8		$	12		$	15

There is no impact to earnings as a result of fair value measurements on items valued on a recurring basis, using level 3 inputs.

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Assets Measured on a Non-Recurring Basis

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

	Fair Value Measurements
	at December 31, 2017 Using:
	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
1–4 family residential	$	740	$	0	$	0	$	740
Consumer		2		0		0		2

	Fair Value Measurements
	at December 31, 2016 Using:
	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	$	23	$	0	$	0	$	23
Farmland		339		0		0		339
Commercial
Agricultural		113		0		0		113
1–4 family residential		77		0		0		77
Consumer		2		0		0		2
Other real estate owned
1–4 family residential		16		0		0		16

Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $851 thousand, with a valuation allowance of $109 thousand at December 31, 2017, resulting in an additional provision for loan losses of $272 thousand for the year ending December 31, 2017.  At December 31, 2016, impaired loans had a principal balance of $727 thousand, with a valuation allowance of $173 thousand.  Loans measured at fair value throughout the year resulted in an additional provision for loan losses of $139 thousand for the year ending December 31, 2016.  Excluded from the fair value of impaired loans, at December 31, 2017 and 2016, discussed above are $763 thousand and $2.0 million of loans classified as troubled debt restructurings and measured using the present value of cash flows, which is not considered an exit price.

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.

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At December 31, 2017, other real estate owned measured at fair value less costs to sell, had a zero net carrying amount.  During the year ended December 31, 2017 the Company charged down one property reflecting an updated appraisal which resulted in a write-down of $23 thousand.  The Company had $36 thousand related write downs during the year ended December 31, 2016.

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 year ended 2017 and 2016:

December 31, 2017	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Residential	$	740	Sales comparison	Adjustment for differences between comparable sales	(15.76%) - 27.92% 0.53%
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(21.98%) - 21.98% (0.00%)

December 31, 2016	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Commercial real estate	$	23	Sales comparison	Adjustment for differences between comparable sales	(24.02%)
		339	Quoted price for loan relationship	Offer price	35.77%
Commercial		113	Quoted price for loan relationship	Offer price	34.98%
Residential		77	Sales comparison	Adjustment for differences between comparable sales	(12.97%) - 14.22% (3.38%)
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(20.00%) - 20.00% (0.00%)
Other real estate owned - residential		16	Sales comparison	Adjustment for differences between comparable sales	(10.36%) - 17.10% (1.90%)

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Fair Value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments measured on a recurring basis and not previously presented, at December 31, 2017 and December 31, 2016 are as follows:

			Fair Value Measurements at December 31, 2017 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	57,614	$	17,785	$	39,829	$	0	$	57,614
Restricted stock		10,491	n/a		n/a		n/a		n/a
Loans held for sale		272		0		283		0		283
Loans, net		1,565,066		0		0		1,569,381		1,569,381
Accrued interest receivable		6,669		0		2,255		4,414		6,669
Financial liabilities
Deposits		1,604,719		1,340,814		259,346		0		1,600,160
Short-term borrowings		289,565		0		289,565		0		289,565
Long-term borrowings		6,994		0		6,690		0		6,690
Accrued interest payable		633		46		587		0		633

			Fair Value Measurements at December 31, 2016 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	41,778	$	19,678	$	22,100	$	0	$	41,778
Restricted stock		9,583	n/a		n/a		n/a		n/a
Loans held for sale		355		0		365		0		365
Loans, net		1,416,783		0		0		1,406,951		1,406,951
Accrued interest receivable		5,504		0		1,924		3,580		5,504
Financial liabilities
Deposits		1,524,756		1,289,037		232,410		0		1,521,447
Short-term borrowings		198,460		0		198,460		0		198,460
Long-term borrowings		15,036		0		15,009		0		15,009
Accrued interest payable		507		35		472		0		507

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.

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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 the average of 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 l, 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 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.

NOTE 7—PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows:

		2017			2016
Land	$	4,775		$	4,972
Buildings		24,692			25,064
Furniture, fixtures and equipment		13,739			14,169
Leasehold Improvements		482			466
		43,688			44,671
Less accumulated depreciation		(21,402	)		(21,446	)
NET BOOK VALUE	$	22,286		$	23,225

Depreciation expense was $1.6 million for year ended December 31, 2017, $1.7 million for year ended December 31, 2016 and $1.5 million for year ended December 31, 2015.

During August 2017 the Company added one location in Holmes County as part of the Monitor acquisition.  All fixed assets were recorded at their fair market value.

During June 2016 the Company added one location with the addition of Bowers Insurance Group in Trumbull County.  All fixed assets were recorded at their fair market value.

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The Company leases certain branch properties under operating leases.  Rent expense was $449, $362, and $332 thousand for 2017, 2016 and 2015, respectively.  In addition to rent expense, under the leases, common area maintenance and property taxes are paid and the amount can fluctuate according to the costs incurred.  Rent commitments, before considering renewal options that generally are present, were as follows:

2018	$	425
2019		419
2020		384
2021		380
2022		270
Thereafter		973
TOTAL	$	2,851

NOTE 8—GOODWILL AND INTANGIBLE ASSETS

Goodwill associated with the Company’s recent purchases of Monitor in August 2017, Bowers in June 2016, NBOH in June 2015, Tri-State in October 2015 and other past acquisitions totaled $38.2 million at December 31, 2017 and $37.2 million at December 31, 2016.  The Monitor, Bowers, NBOH and Tri-State acquisitions are more fully described in Note 2.  Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value, which is determined through a two-step impairment test.  Step 1 includes the determination of the carrying value of the reporting units, including the existing goodwill and intangible assets, and estimating the fair value of the reporting units.  When the carrying amount of a reporting unit exceeds its fair value, a second step to the impairment test is required.  Step 2 requires that the implied fair value of the reporting unit’s goodwill be compared to the carrying amount of that goodwill.  If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess.After our annual impairment analysis as of September 30, 2017, the Company determined the fair value of all goodwill exceeded its carrying amount.

Other Intangibles

Core deposit intangible assets associated with the Company’s purchases of Monitor, NBOH and Tri-State totaled $6.3 million.

Other intangible assets were as follows at year end:

	2017					2016
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Other intangible:
Customer relationship intangibles	$	7,210	$	(4,919	)	$	7,210	$	(4,253	)
Non-compete contracts		430		(376	)		430		(357	)
Trade Name		520		(175	)		520		(113	)
Core deposit intangible		6,254		(1,776	)		5,582		(1,029	)
Total	$	14,414	$	(7,246	)	$	13,742	$	(5,752	)

Aggregate amortization expense was $1.5 million for2017 and 2016, and $983 thousand for 2015.

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Estimated amortization expense for each of the next five years and thereafter:

2018	$	1,418
2019		1,306
2020		1,203
2021		1,142
2022		1,025
Thereafter		1,074
TOTAL	$	7,168

NOTE 9 - INTEREST BEARING DEPOSITS

Time deposits of $250 thousand or more were $51.9 million and $43.3 million at year-end 2017 and 2016.

Following is a summary of scheduled maturities of certificates of deposit during the years following December 31, 2017:

2018	$	92,678
2019		46,243
2020		35,619
2021		55,086
2022		20,424
Thereafter		13,855
TOTAL	$	263,905

Following is a summary of year-end interest bearing deposits:

		2017		2016
Demand	$	440,347	$	378,317
Money Market		253,181		317,079
Savings		234,940		226,770
Certificates of Deposit		263,905		235,720
TOTAL	$	1,192,373	$	1,157,886

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NOTE 10 - SHORT-TERM BORROWINGS

The Bank has short-term advances from the FHLB that had maturity dates of less than one year at the time of the advance. All balances are due within one year and can be renewed at the time of maturity.  FHLB advances are secured by pledgings described in the following Long-Term Borrowings footnote.  Balances at year end were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Repurchase advance with a rate of .59% to 1.48% at    December 31, 2017 and 2016	$	125,000		1.47	%	$	100,000		0.63	%
Fixed rate advances with a rate of 1.43% to 1.49% at    December 31, 2017		90,000		1.45	%		0		0.00	%
Cash management advance with rates from 0% to .59%    at December 31, 2017 and 2016		0		0.00	%		20,000		0.59	%
Total advances	$	215,000		1.46	%	$	120,000		0.63	%

Securities sold under repurchase agreements are secured by the Bank’s holdings of debt securities issued by U.S. government sponsored entities and agencies.  These pledged securities which are 105% of the repurchase agreement balances, had a carrying amount of $77.9 million and $82.0 million at year ended 2017 and 2016.

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

	2017			2016			2015
Average balance during the year	$	82,627		$	84,368		$	71,779
Average interest rate during the year		0.13	%		0.07	%		0.07	%
Maximum month-end balance during the year	$	94,208		$	98,687		$	89,574
Weighted average year-end interest rate		0.14	%		0.08	%		0.06	%
Balance at year-end	$	74,215		$	78,110		$	75,482

The following table provides a disaggregation of the obligation by class of collateral pledged for short-term financing obtained through the sales of repurchase agreements:

	2017		2016
Overnight and continuous repurchase agreements
U.S. Treasury and U.S. government sponsored entities	$	4,811	$	6,555
State and political subdivisions		20,696		12,304
Mortgage-backed securities - residential		43,936		52,628
Collateralized mortgage obligations		4,772		6,623
Total borrowings	$	74,215	$	78,110

Management believes the risks associated with the agreements are minimal and in the case of collateral decline the Company has additional investment securities available to adequately pledge as guarantees for the repurchase agreements.

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The Bank has access to lines of credit amounting to $20 million at two major domestic banks that are below prime rate. The lines and terms are periodically reviewed by the banks and are generally subject to withdrawal at their discretion.  There were no borrowings under these lines at December 31, 2017 and 2016.

Farmers has two unsecured revolving lines of credit for $6.5 million. The lines can be renewed annually. The lines have interest rates of prime with floors of 3.5% and 4.5%. The outstanding balance on the two lines was $350 thousand at December 31, 2017 and 2016.  The interest rate on the outstanding balance at December 31, 2017 and 2016 was 4.5%.

NOTE 11 - LONG-TERM BORROWINGS

At year end, long-term advances from the FHLB were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Fixed-rate constant payment advance, at rates from 1.20%    to 1.70% at December 31, 2017 and 2016	$	4,785		1.70	%	$	7,876		1.57	%
Convertible and putable fixed-rate advance with a rate of    4.45% at December 31, 2016		0		0.00	%		5,000		4.45	%
Total advances	$	4,785		1.70	%	$	12,876		2.69	%

Long-term and short-term FHLB advances are secured by a blanket pledge of residential mortgage loans totaling $280.2 million and $276.9 million at year end 2017 and 2016.  Based on this collateral, the Bank is eligible to borrow an additional $60.4 million at year end 2017.  Each advance is subject to a prepayment penalty if paid prior to its maturity date.

Scheduled payments of long-term FHLB advances are as follows:

Maturing in:
2018	$	1,075
2019		931
2020		860
2021		792
2022		729
Thereafter		398
TOTAL	$	4,785

The Company added a special purpose entity to hold $2.1 million in Trust Preferred Debenture as part of the Tri-State acquisition in 2015. The debt has a floating rate that is determined quarterly based on the three-month LIBOR.  At December 31, 2017, the interest rate was 3.02%. These securities can be redeemed at any quarter-end.  Final maturity of the Trust Preferred Debenture is December 15, 2036. The balance of the outstanding Trust Preferred Debenture was $2.2 million at year end 2017 and 2016.

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NOTE 12 - COMMITMENTS AND CONTINGENT LIABILITIES

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.  Commitments may expire without being used.  Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated.  The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amounts of financial instruments with off-balance-sheet risk at year end were as follows:

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments and unused lines of credit	$	74,119	$	265,260	$	74,798	$	247,080

Commitments to make loans are generally made for periods of 30 days or less.  Commitments and fixed rate unused lines of credit have interest rates ranging from 2.99% to 16.00% at December 31, 2017 and 0.10% to 18.00% at December 31, 2016.  There were six fixed rate loan commitments for 2016 that has an interest rate of 4.25% to 5.25% and matures within fifteen years.  Variable rate loan commitments had interest rates at December 31, 2016 that ranged from 4.69% to 5.75%.  

Standby letters of credit are considered financial guarantees.  The standby letters of credit have a contractual value of $4.9 million at December 31, 2017 and $4.3 million at December 31, 2016.  The carrying amount of these items on the balance sheet is not material.

Additionally, the Company has committed up to a $8 million subscription in SBIC investment funds.  At December 31, 2017 the Company had invested $5.0 million in these funds.

NOTE 13 - STOCK BASED COMPENSATION

During 2017, the Company, with the approval of shareholders, created the 2017 Equity Incentive Plan (the “2017 Plan”).  The 2017 Plan permits the award of up to 800 thousand shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and most importantly to help align the interests of Farmers’ executives with those of the Company’s shareholders. There were 63,248 service time based shares and 64,993 performance based shares granted under the 2017 Plan during the year ended December 31, 2017, as shown in the table below. The actual number of performance based stock awards issued will depend on certain performance conditions which are mainly average return on equity compared to a group of peer companies over a three year vesting period.

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “2012 Plan”).  The 2012 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 no additional shares granted under the Plan during 2017 as detailed in the table below.  Any new restricted stock awards will be issued under the 2017 Plan described above.

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of grant.  Expense recognized for both Plans was $2.4 million for 2017, $892 thousand for 2016 and $486 thousand for 2015.  As of December 31, 2017, there was $1.3 million of total unrecognized compensation expense related to the non-vested shares granted under the Plan.  The remaining cost is expected to be recognized over the next 2 years.

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The following is the activity under the Plans during the years ended December 31, 2017:

	2017 Incentive Plan					2012 Incentive Plan
	Maximum Awarded Units			Weighted Average Grant Date Fair Value		Maximum Awarded Units			Weighted Average Grant Date Fair Value
Beginning balance - nonvested shares		0		$	0.00		499,390		$	8.30
Granted		128,241			13.77		0			0
Vested		0			0		(21,928	)		7.14
Forfeited		(3,623	)		13.53		(12,234	)		8.28
Ending balance - nonvested shares		124,618		$	13.77		465,228		$	8.14

NOTE 14 - REGULATORY MATTERS

Banks and financial 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.  The new minimum capital requirements associated with the Basel Committee on capital and liquidity regulation (Basel III) are being phased in and began on January 1, 2015 and will continue through January 1, 2019.  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 December 31, 2017, the Company and the Bank meet all capital adequacy requirements to which they are subject.

The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”).

The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets.  The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets.

Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements.  The capital conservation buffer began the phase in January 1, 2016 and will increase each year until fully implemented at 2.5% on January 1, 2019.  The capital conservation buffer was 1.25% during 2017 and was 0.625% during 2016.  The buffer required an additional capital amount of $31.5 million at year end 2017 and an additional $19.3 million at year end 2016.  Excluding the additional capital conservation buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%.

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 year-end 2017 and 2016, 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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Dividend Restrictions: The Company’s principal source of funds for dividend payments is dividends received from the Bank, Trust and NAI.  The Bank and Trust are subject to the dividend restrictions set forth by the Comptroller of the Currency and Ohio Department of Commerce – Division of Financial Institutions, respectively.  The respective regulatory agency must approve declaration of any dividends in excess of the sum of profits for the current year and retained net profits for the preceding two years.  During 2018, the Bank could, without prior approval, declare dividends of approximately $16.2 million plus any 2018 net profits retained to the date of the dividend declaration.  In order to practice trust powers, Trust must maintain a minimum capital of $3 million.  The Trust would also be able to, without prior approval, declare dividends of $400 thousand plus any 2018 net profits retained to the date of the dividend declaration.

Actual and required capital amounts (not including the capital conservation buffer) 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
2017
Common equity tier 1 capital ratio
Consolidated	$	199,201		11.86	%	$	75,573		4.5	%	N/A		N/A
Bank		192,080		11.45	%		75,462		4.5	%		109,001		6.5	%
Total risk based capital ratio
Consolidated		213,725		12.73	%		134,352		8.0	%	N/A		N/A
Bank		204,395		12.19	%		134,155		8.0	%		167,694		10.0	%
Tier I risk based capital ratio
Consolidated		201,410		11.99	%		100,764		6.0	%	N/A		N/A
Bank		192,080		11.45	%		100,616		6.0	%		134,155		8.0	%
Tier I leverage ratio
Consolidated		201,410		9.50	%		84,800		4.0	%	N/A		N/A
Bank		192,080		9.12	%		84,253		4.0	%		105,316		5.0	%
2016
Common equity tier 1 capital ratio
Consolidated	$	180,475		11.69	%	$	69,474		4.5	%	N/A		N/A
Bank		171,064		11.12	%		69,244		4.5	%		100,020		6.5	%
Total risk based capital ratio
Consolidated		193,487		12.53	%		123,509		8.0	%	N/A		N/A
Bank		181,916		11.82	%		123,101		8.0	%		153,877		10.0	%
Tier I risk based capital ratio
Consolidated		182,635		11.83	%		92,632		6.0	%	N/A		N/A
Bank		171,064		11.12	%		92,326		6.0	%		123,101		8.0	%
Tier I leverage ratio
Consolidated		182,635		9.41	%		77,596		4.0	%	N/A		N/A
Bank		171,064		8.91	%		76,792		4.0	%		95,990		5.0	%

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NOTE 15 - EMPLOYEE BENEFIT PLANS

The Company has a qualified 401(k) deferred compensation Retirement Savings Plan (the “Savings Plan”).  All employees of the Company who have completed at least 90 days of service and meet certain other eligibility requirements are eligible to participate in the Savings Plan.  Under the terms of the Savings Plan, employees may voluntarily defer a portion of their annual compensation pursuant to section 401(k) of the Internal Revenue Code.  The Company matches a percentage of the participants’ voluntary contributions up to 6% of gross wages.  In addition, at the discretion of the Board of Directors, the Company may make an additional profit sharing contribution to the Savings Plan.  Total expense was $556 thousand, $506 thousand and $431 thousand for the years ended December 31, 2017, 2016 and 2015, respectively.

During 2014 the Company adopted a profit sharing plan to provide associates not participating in a current incentive plan a vehicle for sharing in the success of the Company outside of existing wages and non-monetary benefits.  The Board of Directors approved a profit sharing amount equal to 1% of annual compensation for associates in 2017, 2016 and 2015.  The expense was $103 thousand, $103 thousand and $82 thousand for the years ended December 31, 2017, 2016 and 2015, respectively.

The Company maintains a deferred compensation plan for certain retirees.  Expense under this plan was $8 thousand, $9 thousand and $10 thousand for the years ended December 31, 2017, 2016 and 2015, respectively. The liability under the deferred compensation plan at December 31, 2017 was $133 thousand and $141 thousand at December 31, 2016.

During 2015, the Company established a nonqualified deferred compensation plan for a select group of management or highly compensated eligible individuals.  Under the terms of the plan, eligible individuals may elect to defer receipt of their compensation to a later taxable year.  The Company has recorded both an asset and liability of equal amount that represents the amount of contributions and the payable due to the participants in the plan.  The recorded asset and liability was $566 thousand, $345 thousand and $67 thousand at December 31, 2017, 2016 and 2015, respectively.

As part of the NBOH acquisition the Company has a director retirement and death benefit plan for the benefit of prior members of the Board of Directors of NBOH.  The plan is designed to provide an annual retirement benefit to be paid to each director upon retirement from the Board or attaining age 70.  There are no additional benefits or participants being added to the plan and the liability recorded at December 31, 2017 and 2016 was $1 million. The benefit payment upon satisfying the plan’s requirements is a benefit to the qualifying director until death or a maximum of 15 years.  The expense under this plan was $91 thousand, $130 thousand and $0 in 2017, 2016 and 2015, respectively.   

The Company assumed an employee stock ownership plan (“ESOP”) as part of the Tri-State acquisition that covered substantially all of their employees and officers. The Company terminated this plan during 2017. The trustee had discretionary authority to purchase shares of common stock of Tri-State on the open market.  There were no contributions to the plan in 2017 or 2016.  During acquisition the Tri-State ESOP shares were converted to the Company’s shares and distributed to participants.  The trustee held no shares at December 31, 2017, and 39,690 shares at December 31, 2016.

The Company had a postretirement health care benefit plan that covered individuals retired from the Company that have met certain service and age requirements and certain other active employees that have met similar service requirements.  The Company terminated the plan during 2017.  A benefit was recognized under this plan of $70 thousand, $184 thousand and $12 thousand at December 31, 2017, 2016 and 2015, respectively. Due to the termination of the plan the accrued postretirement benefit liability at December 31, 2017 and 2016 is $0 and $70 thousand, respectively.  Due to the immateriality of the plan, the disclosures required under U.S. generally accepted accounting principles have been omitted.

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NOTE 16 - INCOME TAXES

The provision for income taxes (credit) consists of the following:

		2017		2016			2015
Current expense	$	9,451	$	8,642		$	3,046
Deferred expense (benefit)		618		(1,157	)		(547	)
TOTALS	$	10,069	$	7,485		$	2,499

Effective tax rates differ from federal statutory rate of 35% applied to income before income taxes due to the following:

		2017		2016			2015
Statutory tax	$	11,474		$	9,815		$	3,694
Effect of nontaxable interest		(2,054	)		(1,684	)		(1,403	)
Bank owned life insurance, net		(291	)		(283	)		(242	)
Tax credits		(371	)		(367	)		(236	)
Effect of nontaxable insurance premiums		(348	)		(143	)		0
Impact of enactment of federal tax reform		1,793			0			0
Nondeductible acquisition costs		70			40			401
Other		(204	)		107			285
ACTUAL TAX	$	10,069		$	7,485		$	2,499

Deferred tax assets (liabilities) are comprised of the following:

		2017			2016
Deferred tax assets:
Allowance for credit losses	$	2,525		$	3,621
Net unrealized loss on securities available for sale		0			1,522
Deferred and accrued compensation		981			1,922
Deferred loan fees and costs		517			729
Post-retirement benefits		0			25
Nonaccrual loan interest income		416			306
Other-than-temporary impairment		25			196
Restricted stock		647			509
AMT credit carryforward		64			205
Other		73			106
Gross deferred tax assets	$	5,248		$	9,141
Deferred tax liabilities:
Depreciation and amortization	$	(448	)	$	(740	)
Net unrealized gain on securities available for sale		(159	)		0
Federal Home Loan Bank dividends		(656	)		(1,093	)
Purchase accounting adjustments		(744	)		(1,559	)
Mortgage servicing rights		(261	)		(299	)
Prepaid expenses		(277	)		(271	)
Other		(8	)		(15	)
Gross deferred tax liabilities		(2,553	)		(3,977	)
NET DEFERRED TAX ASSET	$	2,695		$	5,164

No valuation allowance for deferred tax assets was recorded at December 31, 2017 and 2016.

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At December 31, 2017 and December 31, 2016, the Company had no unrecognized tax benefits recorded.  The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.

The Company has approximately $64 thousand of alternative minimum tax credits that can be carried forward indefinitely.

The Company paid no penalties for the year ended December 31, 2017 or 2016.  There were no amounts accrued for penalties or interest as of December 31, 2017 or 2016.

The Company is subject to U.S. federal income tax. The Company is no longer subject to examination by the federal taxing authority for years prior to 2014.  The tax years 2014—2017 remain open to examination by the U.S. taxing authority.

On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Act”), was signed into law.  The Act includes several provisions that will affect the Company’s federal income tax expense, including reducing the federal income tax rate to 21% effective January 1, 2018.  As a result of the rate reduction, the Company is required to re-measure, through income tax expense in the period of enactment, the deferred tax assets and liabilities using the enacted rate at which these items are expected to be recovered or settled.  The re-measurement of the Company’s net deferred tax asset resulted in additional 2017 income tax expense of $1.8 million.

99

NOTE 17 – OTHER COMPREHENSIVE INCOME (LOSS)

The following table represents the detail of other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015.

	2017
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	5,107		$	(1,788	)	$	3,319
Reclassification adjustment for (gains) losses included in net    income (1)		(4	)		2			(2	)
Net unrealized losses on available-for-sale securities		5,103			(1,786	)		3,317
Change in funded status of post-retirement health plan		(55	)		19			(36	)
Net other comprehensive income (loss)	$	5,048		$	(1,767	)	$	3,281
	2016
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	(4,270	)	$	1,494		$	(2,776	)
Reclassification adjustment for (gains) losses included in net    income (1)		(73	)		26			(47	)
Net unrealized gains on available-for-sale securities		(4,343	)		1,520			(2,823	)
Change in funded status of post-retirement health plan		(156	)		55			(101	)
Net other comprehensive income (loss)	$	(4,499	)	$	1,575		$	(2,924	)
	2015
	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during    the year	$	(1,403	)	$	491		$	(912	)
Reclassification adjustment for (gains) losses included in net    income (1)		(94	)		33			(61	)
Net unrealized losses on available-for-sale securities		(1,497	)		524			(973	)
Change in funded status of post-retirement health plan		20			(7	)		13
Net other comprehensive income (loss)	$	(1,477	)	$	517		$	(960	)

(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.

NOTE 18 - RELATED PARTY TRANSACTIONS

Loans to principal officers, directors, and their affiliates during 2017 were as follows:

Beginning balance	$	1,096
New loans		15
Effect of changes in composition of related parties		19,703
Repayments		(293	)
Ending balance	$	20,521

Deposits from principal officers, directors, and their affiliates at year-end 2017 and 2016 were $5.9 million and $12.0 million.

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NOTE 19 – EARNINGS PER SHARE

The factors used in the earnings per share computation follow:

	2017		2016		2015
Basic EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares outstanding		27,567,909		27,180,230		22,678,338
Basic earnings per share	$	0.82	$	0.76	$	0.36
Diluted EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares for basic earnings per share		27,567,909		27,180,230		22,678,338
Average unvested restricted stock awards		51,167		29,108		5,232
Weighted average shares for diluted earnings per share		27,619,076		27,209,338		22,683,570
Diluted earnings per share	$	0.82	$	0.76	$	0.36

There were no restricted stock awards that were considered anti-dilutive at year end 2017 and 2016.  There were 193,105 award shares of common stock that were not considered in computing diluted earnings per share because they were anti-dilutive at year end 2015.

NOTE 20 – 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 as of year ended December 31, 2017, 2016 and 2015 is as follows:

	2017			2016			2015
Notional amounts	$	38,481		$	34,360		$	30,763
Weighted average pay rate on interest-rate swaps		4.46	%		4.34	%		4.25	%
Weighted average receive rate on interest-rate swaps		3.81	%		3.04	%		2.70	%
Weighted average maturity (years)		3.2			4.8			4.1
Fair value of interest-rate swaps	$	(653	)	$	(685	)	$	(789	)
Fair value of loan yield maintenance provisions	$	653		$	685		$	789

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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 sheet.  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 income statements.  There were no net gains or losses recognized in earnings related to yield maintenance provisions for years ended December 31, 2017, 2016 and 2015.

NOTE 21 – 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, trust service fees provide the revenue in trust operations and consulting fees provide the revenues in the retirement consulting operations.  All operations are domestic.

Accounting policies for segments are the same as those described in Note 1.  Segment performance is evaluated using operating income.  Income taxes are calculated on operating income.  Transactions among segments are made at fair value.

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

December 31, 2017	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Assets
Goodwill and other intangibles	$	4,426	$	39,120	$	2,645	$	(822	)	$	45,369
Total assets	$	11,261	$	2,140,508	$	3,365	$	3,935		$	2,159,069

December 31, 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Goodwill and other intangibles	$	4,681	$	38,235	$	2,884	$	(646	)	$	45,154
Total assets	$	10,980	$	1,948,800	$	3,528	$	2,805		$	1,966,113

For year ended 2017	Trust Segment		Bank Segment		Retirement Consulting Segment			Eliminations and Others			Consolidated Totals
Net interest income	$	109	$	73,618	$	0		$	(81	)	$	73,646
Provision for loan losses		0		3,350		0			0		$	3,350
Service fees, security gains and other    noninterest income		6,548		15,986		1,857			(340	)	$	24,051
Noninterest expense		4,801		51,284		1,363			1,029		$	58,477
Amortization and depreciation expense		277		2,558		255			0		$	3,090
Income before taxes		1,579		32,412		239			(1,450	)		32,780
Income tax		455		10,509		(23	)		(872	)	$	10,069
Net Income	$	1,124	$	21,903	$	262		$	(578	)	$	22,711

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For year ended 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	95	$	68,113	$	0	$	(88	)	$	68,120
Provision for loan losses		0		3,870		0		0		$	3,870
Service fees, security gains and other    noninterest income		6,341		15,191		1,990		(278	)	$	23,244
Noninterest expense		4,818		48,804		1,380		1,319		$	56,321
Amortization and depreciation expense		305		2,519		307		0		$	3,131
Income before taxes		1,313		28,111		303		(1,685	)	$	28,042
Income tax		462		7,586		107		(670	)	$	7,485
Net Income	$	851	$	20,525	$	196	$	(1,015	)	$	20,557

For year ended 2015	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	65	$	49,705	$	0	$	(33	)	$	49,737
Provision for loan losses		0		3,510		0		0			3,510
Service fees, security gains and other    noninterest income		6,239		10,192		2,130		(255	)		18,306
Noninterest expense		4,719		40,753		1,487		4,562			51,521
Amortization and depreciation expense		339		1,759		360		0			2,458
Income before taxes		1,246		13,875		283		(4,850	)		10,554
Income tax		425		2,968		97		(991	)		2,499
Net Income	$	821	$	10,907	$	186	$	(3,859	)	$	8,055

Bank segment includes Insurance and Investment.

NOTE 22 - QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarter Ended 2017	March 31		June 30		September30		December 31
Total interest income	$	18,850	$	20,042	$	20,551	$	21,084
Total interest expense		1,319		1,669		1,876		2,017
Net interest income		17,531		18,373		18,675		19,067
Provision for loan losses		1,050		950		950		400
Noninterest income		5,887		6,055		6,058		6,051
Merger related costs		62		104		270		452
Noninterest expense		14,551		15,660		15,521		14,947
Income before income taxes		7,755		7,714		7,992		9,319
Income taxes *		1,972		2,004		2,009		4,084
Net income	$	5,783	$	5,710	$	5,983	$	5,235
Earnings per share - basic and diluted	$	0.21	$	0.21	$	0.22	$	0.19

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Quarter Ended 2016	March 31		June 30		September30		December 31
Total interest income	$	17,747	$	17,950	$	18,332	$	18,469
Total interest expense		1,000		1,061		1,139		1,178
Net interest income		16,747		16,889		17,193		17,291
Provision for loan losses		780		990		1,110		990
Noninterest income		4,946		5,737		6,485		6,076
Merger related costs		289		224		31		19
Noninterest expense		14,155		14,559		15,194		14,981
Income before income taxes		6,469		6,853		7,343		7,377
Income taxes		1,671		1,833		1,967		2,014
Net income	$	4,798	$	5,020	$	5,376	$	5,363
Earnings per share - basic and diluted	$	0.18	$	0.19	$	0.20	$	0.20

* Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

NOTE 23—PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Below is condensed financial information of Farmers National Banc Corp. (parent company only).  This information should be read in conjunction with the consolidated financial statements and related notes.

December 31,	2017		2016
BALANCE SHEETS
Assets:
Cash	$	3,614	$	2,620
Investment in subsidiaries
Bank		224,843		198,030
Trust		10,495		10,184
NAI		2,649		2,787
Captive		1,584		646
Securities available for sale		258		234
Other		1,442		1,284
TOTAL ASSETS	$	244,885	$	215,785
Liabilities:
Other liabilities	$	250	$	57
Note payable		350		350
Subordinate debt		2,209		2,160
Other accounts payable		2		2
TOTAL LIABILITIES		2,811		2,569
TOTAL STOCKHOLDERS' EQUITY		242,074		213,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	244,885	$	215,785

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STATEMENTS OF INCOME
Years ended December 31,		2017			2016			2015
Income:
Dividends from subsidiaries
Bank	$	8,373		$	5,836		$	23,744
Trust		825			820			750
NAI		400			800			400
Interest and dividends on securities		5			5			2
Security gains/(losses)		0			(19	)		0
Other income		0			28			0
TOTAL INCOME		9,603			7,470			24,896
Interest on borrowings		(103	)		(96	)		(35	)
Other expenses		(2,294	)		(1,997	)		(4,817	)
Income before income tax benefit and undistributed    subsidiary income		7,206			5,377			20,044
Income tax benefit		876			670			991
Equity in undistributed net income of subsidiaries    (dividends in excess of net income)
Bank		13,529			14,688			(12,837	)
Trust		299			31			71
NAI		(138	)		(604	)		(214	)
Captive		939			395			0
NET INCOME	$	22,711		$	20,557		$	8,055

STATEMENTS OF CASH FLOWS
Years ended December 31,		2017			2016			2015
Cash flows from operating activities:
Net income	$	22,711		$	20,557		$	8,055
Adjustments to reconcile net income to net cash
from operating activities:
Security (gains)/losses		0			19			0
Dividends in excess of net income (Equity in    undistributed net income of subsidiary)		(14,629	)		(14,510	)		12,980
Other		78			(368	)		(269	)
NET CASH FROM OPERATING ACTIVITIES		8,160			5,698			20,766
Cash flows from investing activities:
Proceeds from maturities of available for sale securities		0			59			0
Net cash paid in business combinations		(1,154	)		0			(18,077	)
NET CASH FROM INVESTING ACTIVITIES		(1,154	)		59			(18,077	)
Cash flows from financing activities:
Proceeds from reissuance of treasury shares		0			0			0
Repurchase of common shares		0			(168	)		(213	)
Cash dividends paid		(6,012	)		(4,326	)		(2,683	)
NET CASH FROM FINANCING ACTIVITIES		(6,012	)		(4,494	)		(2,896	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		994			1,263			(207	)
Beginning cash and cash equivalents		2,620			1,357			1,564
Ending cash and cash equivalents	$	3,614		$	2,620		$	1,357

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

None.

Item 9A. Controls and Procedures.

As of the end of the period covered by this Annual Report on Form 10-K, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures.  Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to ensure that the financial and nonfinancial information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, including this Annual Report on Form 10-K for the period ended December 31, 2017, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Management’s responsibilities related to establishing and maintaining effective disclosure controls and procedures include maintaining effective internal controls over financial reporting that are designed to produce reliable financial statements in accordance with GAAP.  As disclosed in the Report on Management’s Assessment of Internal Control Over Financial Reporting in the Company’s 2017 Annual Report to Shareholders, management assessed the Company’s system of internal control over financial reporting as of December 31, 2017, in relation to criteria for effective internal control over financial reporting as described in the 2013 “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission and found it to be effective.

Crowe Horwath LLP, the Company’s registered public accounting firm, has audited the Company’s internal control over financial reporting as of December 31, 2017.  The audit report by Crowe Horwath is located in Item 8 of this report.

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 year ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.  There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation or material weaknesses in such internal controls requiring corrective actions.

Item 9B. Other Information.

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by Item 401 of Regulation S-K concerning the directors of the Company and the nominees for election as directors of the Company at the Annual Meeting of Shareholders to be held on April 19, 2018 (the “2018 Annual Meeting”) is incorporated herein by reference from the information to be included under the caption “Proposal 1 – Election of Directors” in Farmers’ definitive proxy statement relating to the 2018 Annual Meeting to be filed with the Commission (“2018 Proxy Statement”).

Executive Officers of the Registrant

The names, ages and positions of Farmers’ executive officers as of March 6, 2018:

Name	Age	Title
Carl D. Culp	54	Senior Executive Vice President, Secretary and Treasurer of Farmers and Senior Executive Vice-President, Cashier and Chief Financial Officer of Farmers Bank
Joseph Gerzina	62	Senior Vice President, Chief Lending Officer and Regional President of Farmers Bank
Mark L. Graham	63	Executive Vice President and Chief Credit Officer of Farmers Bank
Kevin J. Helmick	46	President and Chief Executive Officer of Farmers and Farmers Bank
Brian E. Jackson	48	Senior Vice President and Chief Information Officer of Farmers Bank
Mark A. Nicastro	47	Senior Vice President and Chief Human Resources Officer of Farmers Bank
Michael Oberhaus	42	Vice President and Chief Risk Officer of Farmers Bank
Joseph W. Sabat	57	Vice President and Controller of Farmers Bank
Timothy Shaffer	56	Senior Vice President and Regional President of Farmers Bank
Amber Wallace Soukenik	52	Executive Vice President and Chief Retail/Marketing Officer of Farmers Bank
Mark J. Wenick	58	Executive Vice President and Chief Wealth Management Officer of Farmers Bank
Mark R. Witmer	53	Senior Executive Vice President, Chief Banking Officer of Farmers Bank

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

Principal Occupation and Business Experience of Executive Officers

Mr. Culp has served as Senior Executive Vice President and Treasurer of Farmers and Senior Executive Vice President and Chief Financial Officer of Farmers Bank since March 1996.  Prior to that time, Mr. Culp was Controller of Farmers and Farmers Bank from November 1995.  Mr. Culp has 32 years of experience in finance and accounting in the banking industry, and is a certified public accountant.

Mr. Gerzina currently serves as Regional President and Chief Lending Officer, and brings 35 years of experience in commercial and private banking.  Prior to joining Farmers Bank, Mr. Gerzina was a Managing Partner at Weather Vane Capital, and previously held the role of Senior Vice President and Regional Commercial Manager (2002-2009) with Huntington National Bank.  He was appointed as an executive officer of Farmers in 2012.

Mr. Graham has over 40 years of experience with Farmers Bank.  During his tenure, Mr. Graham has held a variety of positions in Farmers Bank’s commercial loan department.  Mr. Graham has served as Executive Vice President and Chief Credit Officer of Farmers Bank since January 2012; for the four years prior to that appointment, Mr. Graham served as Senior Vice President and Senior Lending Officer of Farmers Bank.

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Mr. Helmick is the President and Chief Executive Officer of Farmers and Farmers Bank, a position he has held since November 2013.  Prior to becoming President, Mr. Helmick was Secretary of Farmers and Executive Vice President – Wealth Management and Retail Services of Farmers Bank since January 2012.  Mr. Helmick has been with the Company for 23 years and has a retail and investment background, including an MBA and CFP designation.  From 1997 through 2008, Mr. Helmick served as the Vice President and Program Manager for Investments.  In 2008 Mr. Helmick was promoted to Senior Vice President of Wealth Management and Retail Services where he was responsible for the management and oversight of Investments, the retail investment area of Farmers Bank, Insurance, and all branch sales and operational functions.

Mr. Jackson is the Senior Vice President and Chief Information Officer of Farmers Bank, a position he has held since May 2009.  Prior to coming to the Company, Mr. Jackson was Assistant Vice President and Information Technology Manager with Home Savings Bank since 1993.  He has over 25 years of experience in the IT field.  Mr. Jackson was appointed as an executive officer in 2012.

Mr. Nicastro is the Senior Vice President and Chief Human Resources Officer of Farmers Bank.  Mr. Nicastro was appointed to that position in 2017 and previously served as Director of Human Resources since joining Farmers in July 2009.  Prior to that, Mr. Nicastro served as Staffing and Compliance Manager for Huntington National Bank (2007-2008) and Regional Human Resources Manager for Sky Bank from 2004 until 2007.  Mr. Nicastro has an MBA, and has more than 20 years of experience in Human Resource Management from both large multi-national banks and regional community banks.  He was appointed as an executive officer in 2012.

Mr. Oberhaus is currently the Vice President and Chief Risk Officer of Farmers Bank.  Mr. Oberhaus joined Farmers National Bank as part of the merger with First National Bank of Orrville in June of 2015 as the company’s Enterprise Risk Manager.  Prior to the merger Mr. Oberhaus served as the SVP and Chief Risk Officer of First National Bank of Orrville and brings more than 20 years of experience in banking.

Mr. Sabat has served as Vice President and Controller of Farmers Bank since April 2006.  Prior to coming to the Company, Mr. Sabat was with a regional public accounting firm.  Mr. Sabat has 22 years of experience in the accounting, finance and auditing fields.  He is a certified public accountant and was appointed as an executive officer in 2012.

Mr. Shaffer serves as Regional President and has held that title since July of 2015.  Previously, Mr. Shaffer served as the Director of Commercial Banking & Private Client Services.  In October of 2011, Mr. Shaffer joined Farmers Bank as the Commercial Lending Manager, overseeing commercial lending, small business lending and treasury management.  Mr. Shaffer has over 28 years of Banking and Lending experience in the Mahoning Valley market.  Mr. Shaffer was appointed as an executive officer in 2014.

Ms. Wallace Soukenik has served as Executive Vice President and Chief Retail/Marketing Officer for Farmers Bank since November 2013.  In August 2008 Ms. Wallace Soukenik joined Farmers Bank as Senior Vice President and Director of Marketing.  She has 28 years of experience in the marketing field.  Prior to joining the Company, Ms. Wallace Soukenik served as the Assistant Vice President of Marketing and Physician Relations at Trumbull Memorial Hospital, where she managed a $14 million endowment, a $1.5 million marketing budget and all physician contracts.  She was appointed as an executive officer in 2012.

Mr. Wenick is Senior Vice President and Chief Wealth Management Officer of Farmers Bank. Prior to coming to Farmers National Bank in 2017, Mr. Wenick was regional president of Chemical Bank for 3 years.  Prior to that, Mr. Wenick spent 5 years in local bank investment and trust positions.  He brings more than 35 years of financial expertise in the area of wealth management.

Mr. Witmer is the Senior Executive Vice President and Chief Banking Officer of Farmers National Bank.  Mr. Witmer joined Farmers National Bank as part of the merger with First National Bank of Orrville in June of 2015.  Prior to the merger, Mr. Witmer served as the Chief Executive Officer of First National Bank of Orrville.  Mr. Witmer has more than 26 years of leadership, community banking and lending experience.

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Compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended.

The information required by Item 405 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2018 Proxy Statement.

Code of Business Conduct and Ethics.

The Company has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that covers all employees, including its principal executive, financial and accounting officers, and is posted on the Company’s website www.farmersbankgroup.com.  In the event of any amendment to, or waiver from, a provision of the Code of Ethics that applies to its principal executive, financial or accounting officers, the Company intends to disclose such amendment or waiver on its website.

Procedures for Recommending Directors Nominees.

Information concerning the procedures by which shareholders may recommend nominees to Farmers’ Board of Directors is incorporated herein by reference from the information to be included under the caption “Director Nominations” in 2018 Proxy Statement.  These procedures have not materially changed from those described in Farmers’ definitive proxy materials for the 2017 Annual Meeting of Shareholders.

Audit Committee.

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “Committees of the Board of Directors – Audit Committee” in the 2018 Proxy Statement.

Item 11. Executive Compensation.

The information required by Item 402 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the captions “Compensation Discussion and Analysis” and “Executive Compensation and Other Information” in the 2018 Proxy Statement.

The information required by Item 407(e)(4) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “Compensation Committee Interlocks and Insider Participation” in the 2018 Proxy Statement.

The information required by Item 407(e)(5) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “The Compensation Committee Report” in the 2018 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 201(d) of Regulation S-K is incorporated herein by reference from the disclosure included under the caption “Equity Compensation Plan Information” in the 2018 Proxy Statement of the Company.

The information required by Item 403 of Regulation S-K is incorporated herein by reference from the disclosure included under the caption “Beneficial Ownership of Management and Certain Beneficial Owners” in the 2018 Proxy Statement of the Company.

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Item 13. Certain Relationships and Related Transactions and Director Independence.

The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “Certain Relationships and Related Transactions” in the 2018 Proxy Statement.

The information required by Item 407(a) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “The Board of Directors — Independence” in the 2018 Proxy Statement.

Item 14. Principal Accountant Fees and Services.

The information required by this Item 14 is incorporated herein by reference from the disclosure to be included under the captions “Independent Registered Public Accounting Firm Fees” and “Pre-Approval of Fees” in the 2018 Proxy Statement.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)	(1) Financial Statements
		Item 8 Reference is made to the Consolidated Financial Statements included in Item 8 of Part II herein.
	(2) Financial Statement Schedules
		No financial statement schedules are presented because they are not applicable.
	(3) Exhibits
		The exhibits filed or incorporated by reference as a part of this Annual Report on Form 10-K are listed in the Exhibit Index, which follows and is incorporated herein by reference.
(b)	Exhibits
		The exhibits filed or incorporated by reference as a part of this Annual Report on Form 10-K are listed in the Exhibit Index, which follows and is incorporated herein by reference.
(c)	Financial Statement Schedules
		See subparagraph (a)(2) above.

Item 16. Form 10-K Summary.

None.

110

INDEX TO EXHIBITS

The following exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K:

Exhibit Number	Description
2.1	Agreement and Plan of Merger by and among Monitor Bancorp, Inc., Farmers National Banc Corp. and FMNB Merger Subsidiary II, LLC, dated as of March 13, 2017 (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 17, 2017)
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. 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed with the Commission on August 8, 2012).
10.2*	Farmers National Banc Corp. Cash Incentive Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Current Report on Form 8-K filed with the Commission on June 24, 2011).
10.3*	Farmers National Banc Corp. Long-Term Incentive Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Current Report on Form 8-K filed with the Commission on June 29, 2011).
10.4*	Farmers National Banc Corp. Nonqualified Deferred Compensation Plan (as amended and restated effective January 1, 2016) (incorporated by reference from Exhibit 10.4 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).
10.5*	Farmers National Banc Corp. 2015 Form of Cash Long-Term Incentive Award Agreement under Long-Term Incentive Plan (incorporated by reference from Exhibit 10.9 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Commission on March 10, 2016).
10.6*	Farmers National Banc Corp. 2015 Form of Equity Long-Term Incentive Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.10 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Commission on March 10, 2016).
10.7*	Farmers National Banc Corp. 2015 Form of Notice of Grant and Restricted Stock Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on November 9, 2015).
10.8*	Farmers National Banc Corp. 2016 Form of Notice of Grant and Restricted Stock Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.8 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).
10.9*	Farmers National Banc Corp. 2016 Form of Cash Long-Term Incentive Award Agreement under Long-Term Incentive Plan (incorporated by reference from Exhibit 10.9 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).

111

Exhibit Number	Description
10.10*	Farmers National Banc Corp. 2016 Form of Service-Based Long-Term Equity Incentive Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.10 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).
10.11*	Farmers National Banc Corp. 2016 Form of Performance-Based Long-Term Equity Incentive Award Agreement under 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.11 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).
10.12*	Farmers National Banc Corp. 2017 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to Farmers’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 filed with the Commission on August 8, 2017).
10.13*	Farmers National Banc Corp. 2017 Form of Notice of Grant of Long-term Incentive Plan Awards under 2017 Equity Incentive Plan (incorporated by reference from Exhibit 10.2 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on August 8, 2017).
10.14*	Farmers National Banc Corp. 2017 Form of Notice of Grant of Long-term Incentive Plan Awards under 2017 Equity Incentive Plan (incorporated by reference from Exhibit 10.3 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on August 8, 2017).
10.15*	Farmers National Banc Corp. 2017 Form of Service-Based Restricted Stock Award Agreement under 2017 Equity Incentive Plan (incorporated by reference from Exhibit 10.4 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on August 8, 2017).
10.16*	Farmers National Banc Corp. 2017 Form of Performance-Based Equity Award Agreement under 2017 Equity Incentive Plan (incorporated by reference from Exhibit 10.5 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on August 8, 2017).
10.17*	Nonemployee Director Compensation (incorporated by reference from Exhibit 10.12 to Farmers’ Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Commission on March 7, 2017).
10.18*	Farmers National Banc Corp. Form of Indemnification Agreement (incorporated by reference from Exhibit 10.1 to Farmers’ Current Report on Form 8-K filed with the Commission on April 29, 2011).
10.19*	Farmers National Banc Corp. Amended and Restated Executive Separation Policy (incorporated by reference from Exhibit 10.2 to Farmers’ Quarterly Report on Form 10-Q filed with the Commission on November 9, 2015).
10.20*	Change in Control Agreement with Kevin J. Helmick (incorporated by reference from Exhibit 10.2 to Farmers’ Current Report on Form 8-K filed with the Commission on November 14, 2013).
10.21*	Form of Change in Control Agreements for Executive Officers (incorporated by reference from Exhibit 10.3 to Farmers’ Current Report on Form 8-K filed with the Commission on November 14, 2013).
21	Subsidiaries of Farmers (filed herewith).
23	Consent of Independent Registered Public Accounting Firm (filed herewith).
24	Powers of Attorney of Directors and Executive Officers (filed herewith).
31.1	Rule 13a-14(a)/15d-14(a) Certification of Kevin J. Helmick, President and Chief Executive Officer of Farmers (principal executive officer) (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of Carl D. Culp, Executive Vice President and Treasurer of Farmers (principal financial officer) (filed herewith).

112

Exhibit Number	Description
32.1	Certification pursuant to 18 U.S.C. Section 1350 of Kevin J. Helmick, President and Chief Executive Officer of Farmers (principal executive officer) (filed herewith).
32.2	Certification pursuant to 18 U.S.C. Section 1350 of Carl D. Culp, Executive Vice President and Treasurer of Farmers (principal financial officer) (filed herewith).
101.INS	XBRL Instance Document (filed herewith).
101.SCH	XBRL Taxonomy Extension Schema Document (filed herewith).
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).

* Constitutes a management contract or compensatory plan or arrangement.

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

113

SIGNATURES

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

FARMERS NATIONAL BANC CORP.
By	/s/ Kevin J. Helmick
	Kevin J. Helmick, President and Chief Executive Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Kevin J. Helmick	President, Chief Executive Officer and Director	March 6, 2018
Kevin J. Helmick	(Principal Executive Officer)
/s/ Carl D. Culp	Senior Executive Vice President, Secretary and Treasurer	March 6, 2018
Carl D. Culp	(Principal Financial Officer)
/s/ Joseph W. Sabat*	Controller	March 6, 2018
Joseph W. Sabat	(Principal Accounting Officer)
/s/ Gregory C. Bestic*	Director	March 6, 2018
Gregory C. Bestic
/s/ Anne Frederick Crawford*	Director	March 6, 2018
Anne Frederick Crawford
/s/ Lance J. Ciroli*	Chairman of the Board	March 6, 2018
Lance J. Ciroli
/s/ Ralph D. Macali*	Director	March 6, 2018
Ralph D. Macali
/s/ Terry A. Moore*	Director	March 6, 2018
Terry A. Moore
/s/ Edward W. Muransky*	Director	March 6, 2018
Edward W. Muransky
/s/ David Z. Paull*	Director	March 6, 2018
David Z. Paull
/s/ Earl R. Scott*	Director	March 6, 2018
Earl R. Scott
/s/ James R. Smail*	Vice Chairman of the Board	March 6, 2018
James R. Smail
/s/ Gregg Strollo*	Director	March 6, 2018
Gregg Strollo

* The above-named directors and officers of the Registrant sign this Annual Report on Form 10-K by Kevin J. Helmick and Carl D. Culp, their attorney-in-fact, pursuant to Powers of Attorney signed by the above-named directors and officers, which Powers of Attorney are filed with this Annual Report on Form 10-K as exhibits, in the capacities indicated.

114

By
	/s/ Kevin J. Helmick
	Kevin J. Helmick
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
	/s/ Carl D. Culp
	Carl D. Culp
	Senior Executive Vice President, Secretary and Treasurer
	(Principal Financial Officer)

115

EX-21

Exhibit 21

Subsidiaries of Farmers National Banc Corp.

Farmers National Banc Corp.

- The Farmers National Bank of Canfield

- Farmers National Insurance LLC

- Farmers of Canfield Investment Co.

- Farmers Trust Company

- National Associates, Inc.

- Farmers National Captive Inc.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-180649 on Form S-3D and Nos. 333-217925, 333-188570, 333-185260 and 333-176399 on Forms S-8 of Farmers National Banc Corp. of our report dated March 6, 2018 relating to the consolidated financial statements and effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K.

/s/ Crowe Horwath LLP

Crowe Horwath LLP

Cleveland, Ohio

March 6, 2018

EX-24

Exhibit 24

POWER OF ATTORNEY

Each director and/or officer of Farmers National Banc Corp. (the “Corporation”) whose signature appears below hereby appoints KEVIN J. HELMICK and CARL D. CULP, and each of them, with full power of substitution and resubstitution, as attorneys or attorney to sign for the undersigned and in his or her name, place and stead, and in any and all capacities stated below, and to cause to be filed with the Securities and Exchange Commission (the “Commission”), the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and likewise to sign and file with the Commission any and all amendments (on Form 10-K/A) and exhibits thereto, and any and all applications and documents to be filed with the Commission pertaining to such Annual Report, with full power and authority to do and perform any and all acts and things whatsoever requisite, necessary or advisable to be done in the premises, as fully and for all intents and purposes as each of the undersigned could so if personally present, hereby ratifying and approving the acts of said attorneys and any of them and any such substitute.

IN WITNESS WHEREOF, we have hereunto set our hands effective as of the 27th day of February, 2018.

/s/ Kevin J. Helmick	/s/ Carl D. Culp	/s/ Joseph W. Sabat
Kevin J. Helmick	Carl D. Culp	Joseph W. Sabat
President &CEO	Senior Executive VP, CFO and Treasurer	Controller
(Principal Executive Officer)	(Principal Financial Officer)	(Principal Accounting Officer)
February 27, 2018	February 27, 2018	February 27, 2018
/s/ Gregory C. Bestic	Director
Gregory C. Bestic
/s/ Lance J. Ciroli	Chairman of the Board
Lance J. Ciroli
/s/ Anne Frederick Crawford	Director
Anne Frederick Crawford
/s/ Ralph D. Macali	Director
Ralph D. Macali
/s/ Terry A. Moore	Director
Terry A. Moore
/s/ Edward W. Muransky	Director
Edward W. Muransky
/s/ David Z. Paull	Director
David Z. Paull
/s/ Earl R. Scott	Director
Earl R. Scott
/s/ James R. Smail	Vice Chairman of the Board
James R. Smail
/s/ Gregg Strollo	Director
Gregg Strollo

EX-31.1

Exhibit 31.1

CERTIFICATION

CERTIFICATION FOR ANNUAL REPORT ON FORM 10-K

I, Kevin J. Helmick, certify that:

1) I have reviewed this annual report on Form 10-K of Farmers National Banc Corp. (the “Company”);

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 controls 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.

/s/ Kevin J. Helmick

Kevin J. Helmick

President and Chief Executive Officer

(Principal Executive Officer)

March 6, 2018

EX-31.2

Exhibit 31.2

CERTIFICATION

CERTIFICATION FOR ANNUAL REPORT ON FORM 10-K

I, Carl D. Culp, certify that:

1) I have reviewed this annual report on Form 10-K of Farmers National Banc Corp. (the “Company”);

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 controls 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.

/s/ Carl D. Culp

Carl D. Culp

Senior Executive Vice President and Treasurer

(Principal Financial Officer)

March 6, 2018

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 Annual Report of Farmers National Banc Corp. (the “Company”) on Form 10-K for the period ending December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Kevin J. Helmick, principal executive officer of the Company, 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 Company.

/s/ Kevin J. Helmick

Kevin J. Helmick

President and Chief Executive Officer

(Principal Executive Officer)

March 6, 2018

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 Annual Report of Farmers National Banc Corp. (the “Company”) on Form 10-K for the period ending December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Carl D. Culp, principal financial officer of the Company, 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 Company.

/s/ Carl D. Culp

Carl D. Culp

Senior Executive Vice President and Treasurer

(Principal Financial Officer)

March 6, 2018

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Mar. 01, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	FARMERS NATIONAL BANC CORP /OH/
Entity Central Index Key	0000709337
Document Type	10-K
Trading Symbol	FMNB
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 392.5
Entity Common Stock, Shares Outstanding		27,554,207

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
ASSETS
Cash and due from banks	$ 17,785	$ 19,678
Federal funds sold and other	39,829	22,100
TOTAL CASH AND CASH EQUIVALENTS	57,614	41,778
Securities available for sale	393,331	369,995
Loans held for sale	272	355
Loans	1,577,381	1,427,635
Less allowance for loan losses	12,315	10,852
NET LOANS	1,565,066	1,416,783
Premises and equipment, net	22,286	23,225
Goodwill	38,201	37,164
Other intangibles	7,168	7,990
Bank owned life insurance	33,877	30,048
Other assets	41,254	38,775
TOTAL ASSETS	2,159,069	1,966,113
Deposits:
Noninterest-bearing	412,346	366,870
Interest-bearing	1,192,373	1,157,886
TOTAL DEPOSITS	1,604,719	1,524,756
Short-term borrowings	289,565	198,460
Long-term borrowings	6,994	15,036
Other liabilities	15,717	14,645
TOTAL LIABILITIES	1,916,995	1,752,897
Commitments and contingent liabilities (Note 12)
Stockholders' equity
Common Stock - Authorized 35,000,000 shares; issued 28,179,598 in 2017 and 27,713,811 in 2016	186,903	178,317
Retained earnings	59,208	42,547
Accumulated other comprehensive income (loss)	596	(2,791)
Treasury stock, at cost; 635,550 shares in 2017 and 666,147 shares in 2016	(4,633)	(4,857)
TOTAL STOCKHOLDERS' EQUITY	242,074	213,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,159,069	$ 1,966,113

XML

Consolidated Balance Sheets (Parenthetical) - shares	Dec. 31, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Common stock, shares authorized	35,000,000	35,000,000
Common stock, shares issued	28,179,598	27,713,811
Treasury stock, shares	635,550	666,147

XML

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 69,934	$ 63,109	$ 44,657
Taxable securities	4,899	5,058	5,903
Tax exempt securities	4,763	3,650	2,951
Dividends	537	515	287
Federal funds sold and other interest income	394	166	29
TOTAL INTEREST AND DIVIDEND INCOME	80,527	72,498	53,827
INTEREST EXPENSE
Deposits	4,490	3,221	3,489
Short-term borrowings	2,167	689	177
Long-term borrowings	224	468	424
TOTAL INTEREST EXPENSE	6,881	4,378	4,090
NET INTEREST INCOME	73,646	68,120	49,737
Provision for loan losses	3,350	3,870	3,510
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	70,296	64,250	46,227
NONINTEREST INCOME
Service charges on deposit accounts	4,077	4,010	3,253
Bank owned life insurance income, including death benefits	831	814	702
Trust fees	6,431	6,235	6,156
Insurance agency commissions	2,407	1,560	569
Security gains	4	73	94
Retirement plan consulting fees	1,857	1,990	2,130
Investment commissions	919	1,210	1,172
Net gains on sale of loans	3,066	2,843	1,101
Debit card and EFT fees	3,089	2,661	1,882
Other operating income	1,370	1,848	1,247
TOTAL NONINTEREST INCOME	24,051	23,244	18,306
NONINTEREST EXPENSE
Salaries and employee benefits	34,759	31,908	26,638
Occupancy and equipment	6,292	6,615	5,452
State and local taxes	1,663	1,544	1,171
Professional fees	2,891	2,757	3,180
Merger related costs	888	563	6,392
Advertising	1,527	1,462	1,479
FDIC insurance	869	1,055	937
Intangible amortization	1,494	1,461	983
Core processing charges	2,880	2,699	2,176
Telephone and data	973	930	676
Other operating expenses	7,331	8,458	4,895
TOTAL NONINTEREST EXPENSE	61,567	59,452	53,979
INCOME BEFORE INCOME TAXES	32,780	28,042	10,554
INCOME TAXES	10,069	7,485	2,499
NET INCOME	$ 22,711	$ 20,557	$ 8,055
EARNINGS PER SHARE: Basic and Diluted	$ 0.82	$ 0.76	$ 0.36

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME		$ 22,711	$ 20,557	$ 8,055
Other comprehensive income (loss):
Net unrealized holding gains (losses) on available for sale securities		5,107	(4,270)	(1,403)
Reclassification adjustment for gains realized in income	[1]	(4)	(73)	(94)
Net unrealized holding gains (losses)		5,103	(4,343)	(1,497)
Income tax effect		(1,786)	1,520	524
Unrealized holding gains (losses), net of reclassification and tax		3,317	(2,823)	(973)
Change in funded status of post-retirement health plan		(55)	(156)	20
Income tax effect		19	55	(7)
Change in funded status of post-retirement health plan, net of tax		(36)	(101)	13
Other comprehensive income (loss), net of tax		3,281	(2,924)	(960)
TOTAL COMPREHENSIVE INCOME		$ 25,992	$ 17,633	$ 7,095

[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.

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	COMMON STOCK	RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	TREASURY STOCK, AT COST
Balance at beginning of year at Dec. 31, 2014		$ 106,021	$ 20,944	$ 1,093	$ (4,498)
Treasury shares issued under the Long Term Incentive Plan		0	0		22
Shares issued in contingent payments as part of a business combination		69,780	0		0
Stock compensation expense for unvested shares		486
Reclassification of disproportionate tax effects			0	0
Purchased 19,900 shares in 2016 and 26,800 shares in 2015					(213)
Net income	$ 8,055		8,055
Dividends declared			(2,683)
Other comprehensive income (loss)	(960)			(960)
Balance at end of year at Dec. 31, 2015	198,047	176,287	26,316	133	(4,689)
Treasury shares issued under the Long Term Incentive Plan		0	0		0
Shares issued in contingent payments as part of a business combination		1,138	0		0
Stock compensation expense for unvested shares		892
Reclassification of disproportionate tax effects			0	0
Purchased 19,900 shares in 2016 and 26,800 shares in 2015					(168)
Net income	20,557		20,557
Dividends declared			(4,326)
Other comprehensive income (loss)	(2,924)			(2,924)
Balance at end of year at Dec. 31, 2016	213,216	178,317	42,547	(2,791)	(4,857)
Treasury shares issued under the Long Term Incentive Plan		(133)	(5)		139
Shares issued in contingent payments as part of a business combination		6,358	73		85
Stock compensation expense for unvested shares		2,361
Reclassification of disproportionate tax effects			(106)	106
Purchased 19,900 shares in 2016 and 26,800 shares in 2015					0
Net income	22,711		22,711
Dividends declared			(6,012)
Other comprehensive income (loss)	3,281			3,281
Balance at end of year at Dec. 31, 2017	$ 242,074	$ 186,903	$ 59,208	$ 596	$ (4,633)

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Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
TREASURY STOCK, AT COST
Treasury shares issued under the Long Term Incentive Plan	18,928		3,000
Shares issued in contingent payments as part of a business combination, shares	11,669
Treasury stock repurchased		19,900	26,800
COMMON STOCK
Shares issued in contingent payments as part of a business combination, shares	465,787	123,280	8,559,472
RETAINED EARNINGS
Cash dividend declared per share of common stock	$ 0.22	$ 0.16	$ 0.12

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 22,711	$ 20,557	$ 8,055
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses	3,350	3,870	3,510
Depreciation and amortization	3,139	3,667	2,751
Net amortization of securities	1,823	2,216	2,275
Security gains	(4)	(73)	(94)
Loss (gain) on land and building sales, net	53	(238)	0
Stock compensation expense	2,361	892	486
Loss on sale of other real estate owned	20	277	286
Earnings on bank owned life insurance	(831)	(814)	(702)
Origination of loans held for sale	(56,810)	(64,599)	(46,201)
Proceeds from loans held for sale	59,959	68,856	46,455
Net gains on sale of loans	(3,066)	(2,843)	(1,101)
Net change in other assets and liabilities	(2,139)	(7,273)	(9,397)
NET CASH FROM OPERATING ACTIVITIES	30,566	24,495	6,323
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and repayments of securities available for sale	43,104	59,904	63,243
Proceeds from sales of securities available for sale	54,497	11,493	102,257
Purchases of securities available for sale	(114,600)	(52,628)	(72,683)
Purchases of restricted stock	(842)	(200)	0
Loan originations and payments, net	(132,597)	(133,248)	(139,656)
Proceeds from sale of other real estate owned	643	665	553
Purchase of bank owned life insurance	(3,000)	0	(6,000)
Proceeds from land and building sales	439	479	723
Additions to premises and equipment	(956)	(788)	(1,299)
Net cash (paid) received in business combinations	16,203	(1,073)	29,749
NET CASH FROM INVESTING ACTIVITIES	(137,109)	(115,396)	(23,113)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	45,377	115,709	(44,659)
Net change in short-term borrowings	91,105	(27,372)	91,159
Repayments of long-term borrowings	(8,091)	(7,178)	(3,228)
New advances for long term borrowing	0	0	5,000
Cash dividends paid	(6,012)	(4,326)	(2,683)
Repurchase of common shares	0	(168)	(213)
NET CASH FROM FINANCING ACTIVITIES	122,379	76,665	45,376
NET CHANGE IN CASH AND CASH EQUIVALENTS	15,836	(14,236)	28,586
Beginning cash and cash equivalents	41,778	56,014	27,428
Ending cash and cash equivalents	57,614	41,778	56,014
Supplemental cash flow information:
Interest paid	6,754	4,316	4,047
Income taxes paid	8,800	9,410	2,620
Supplemental noncash disclosures:
Transfer of loans and property to other real estate owned	279	482	888
Issuance of stock for business combinations	6,358	1,138	69,780
Contingent consideration for business combination	85	880	0
Security purchases not settled	$ 0	$ 927	$ 1,338

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include the accounts of Farmers National Banc Corp. and its wholly-owned subsidiaries, The Farmers National Bank of Canfield (“Bank”), Farmers Trust Company (“Trust”), National Associates, Inc. (“NAI”) and Farmers National Captive, Inc. (“Captive”).  Captive was formed during 2016 and is a wholly-owned insurance subsidiary of the Company.  The consolidated financial statements also include the accounts of the Farmers National Bank of Canfield’s subsidiaries; Farmers National Insurance (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”).  The Company acquired Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank in 2017 and First National Bank of Orrville (“First National Bank”) a subsidiary of National Bancshares Corporation (“NBOH”) and 1^st National Community Bank (“FNCB”) a subsidiary of Tri-State 1^st Banc, Inc. (“Tri-State”) during 2015 and consolidated all activity of these acquisitions within the Bank.  The Bank acquired Bowers Insurance Agency, Inc. (“Bowers”) and consolidated the activity of Bowers with Farmers National Insurance (“Insurance”) during 2016, see Note 2.  Together all entities are referred to as “the Company.” All significant intercompany balances and transactions have been eliminated in consolidation.

Nature of Operations: The Company provides full banking services, including wealth management services and mortgage banking activity, through the Bank.  As a national bank, the Bank is subject to regulation of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.  The primary area served by the Bank is the northeastern region of Ohio through thirty nine (39) locations and two branch location in southwestern Pennsylvania.  The Company provides trust services through its Trust subsidiary, retirement consulting services through its NAI subsidiary and insurance services through the Bank’s Insurance subsidiary.  Trust has a state-chartered bank license to conduct trust business from the Ohio Department of Commerce – Division of Financial Institutions.  The primary purpose of Investments is to invest in municipal securities.  Captive provides property and casualty insurance coverage to the Company and its subsidiaries.  Captive pools resources with thirteen other similar insurance subsidiaries of financial institutions to spread a limited amount of risk among the pool members and to provide insurance where not currently available or economically feasible in today’s insurance market place.

Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

Cash Flows: Cash and cash equivalents include cash on hand, deposits with other financial institutions and federal funds sold.  Generally, federal funds are purchased and sold for one-day periods.  Net cash flows are reported for loan and deposit transactions, short term borrowings and other assets and liabilities.

Securities Available for Sale: Debt securities are classified as available for sale when they might be sold before maturity.  Equity securities with readily determinable fair values are classified as available for sale.  Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount.  Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated.  Gains and losses on sales are recorded on the trade date and determined using the specific identification method.  Purchases are recorded on the trade date.

Management evaluates securities for other-than-temporary impairment (OTTI) on at least a quarterly basis, and more frequently when economic or market conditions warrant.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  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) other-than-temporary impairment (OTTI) related to other factors, which is recognized in other comprehensive income.  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.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors.  Net unrealized losses, if any, are charged to earnings.

Mortgage loans held for sale are sold with or without servicing rights released.  Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses.  Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate.

Interest income is accrued on the unpaid principal balance.  Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.  Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection.  Consumer loans are typically charged off no later than 120 days past due.  Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

For all classes of loans, when interest accruals are discontinued, interest accrued but not received for loans placed on non-accrual is reversed against interest income.  Interest on such loans is thereafter recorded on a cash-basis or cost-recovery method, until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Credit Impaired Loans: The Company purchased loans that have shown evidence of credit deterioration since origination through the acquisition of First National Bank.  These loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses.  The Company estimates the amount and timing of expected cash flows for each loan, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan.  The excess of the loan’s contractual principal and interest over expected cash flows is not recorded.

Over the life of the loan, expected cash flows continue to be estimated.  If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses.  If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value.  The Company’s derivatives are interest-rate swap agreements, which are used as part of its asset and liability management strategy to help manage its interest rate risk position.  The Company does not use derivatives for trading or balance sheet hedging purposes.  The derivative transactions are considered instruments with no hedging designation, otherwise known as stand-alone derivatives.  Changes in the fair value of the derivatives are reported currently in earnings, as other noninterest income.

Concentration of Credit Risk: There are no significant concentrations of loans to any one industry or customer.  However, most of the Company’s business activity is with customers located within Northeastern Ohio.  Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy of a nine county area.  Loans secured by real estate represent 69.8% of the total portfolio and changes related to the real estate markets are monitored by management.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred loan losses, increased by the provision for loan losses and decreased by charge-offs less recoveries.  The allowance is based on management’s judgment taking into consideration past loss experience, reviews of individual loans, current economic conditions and other factors considered relevant by management at the financial statement date.  While management uses the best information available to establish the allowance, future adjustments to the allowance may be necessary, which may be material, if economic conditions differ substantially from the assumptions used in estimating the allowance.  If additions to the original estimate of the allowance for loan losses are deemed necessary, they will be reported in earnings in the period in which they become reasonably estimable and probable.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

Acquired loans are individually evaluated and for those purchased loans without evidence of credit deterioration, management evaluates each reviewed loan using an internal grading system with a grade assigned to each loan at the date of acquisition.  To the extent that any purchased loan is not specifically reviewed, such loan is assumed to have characteristics similar to the characteristics of the acquired portfolio of purchased loans.  The grade for each purchased loan without evidence of credit deterioration is reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to the Company that provides material insight regarding the loan’s performance, the status of the borrower or the quality or value of the underlying collateral.  To the extent that current information indicates it is probable that the Company will collect all amounts according to the contractual terms thereof, such loan is not considered impaired and is not individually considered in the determination of the required allowance for loan losses.  To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered impaired and is considered in the determination of the required level of allowance.

In determining the day one fair values of purchased loans without evidence of credit deterioration at the date of acquisition, management includes (i) no carry-over of any previously recorded allowance for loan losses and (ii) an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest, given the risk profile and grade assigned to each loan.  This adjustment is accreted into earnings as a yield adjustment, using the effective yield method, over the remaining life of each loan.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis for commercial and commercial real estate loans over $750 thousand, individually or in the aggregate, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures.  Non-real estate secured consumer loans in bankruptcy where debt has not been reaffirmed are considered troubled debt restructurings and are evaluated individually to ensure that accurate accounting treatment is in place.

The Company considers the guidance on troubled debt restructuring for individual consumer and residential loans when evaluating for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flow using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced for the most recent twelve quarters.  The formula for calculating the allowance for loan losses requires that the historical loss percentage be applied to homogeneous and all risk rated loans.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:

Commercial Loans. Commercial credit is extended to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other projects.  The majority of these borrowers are customers doing business within our geographic regions.  These loans are generally underwritten individually and secured with the assets of the company and the personal guarantee of the business owners.  Commercial loans are made based primarily on the historical and projected cash flow of the borrower and the underlying collateral provided by the borrower.

Commercial Real Estate Loans. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans.  These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property.  Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and property type.

Consumer Loans. Consumer loans are primarily comprised of loans made directly to consumers and indirectly through automobile dealerships.  These loans have a specific matrix which consists of several factors including debt to income, type of collateral and loan to collateral value, credit history and relationship with the borrower.  Consumer lending uses risk-based pricing in the underwriting process.

Residential Real Estate Loans. Residential mortgage loans represent loans to consumers for the purchase or refinance of a residence.  These loans are generally financed up to 15 years and in most cases, are extended to borrowers to finance their primary residence.  Real estate market values at the time of origination directly affect the amount of credit extended and, in the event of default, subsequent changes in these values may impact the severity of losses.

Servicing Rights:When mortgage loans are sold and servicing rights are retained, the servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.  Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.  The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses.  The Company compares the valuation model inputs and results to published industry data to validate the model results and assumptions.  All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non‑interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.  Servicing assets are evaluated for impairment based upon the fair value of the assets compared to carrying amount.  Any impairment is reported as a valuation allowance, to the extent that fair value is less than the capitalized amount for a grouping.  There was no valuation allowance impairment against servicing assets as of December 31, 2017 or 2016.

Servicing fee income is recorded when earned for servicing loans based on a contractual percentage of the outstanding principal or a fixed amount per loan.  The amortization of mortgage servicing rights is netted against loan servicing fee income.  Servicing fees, late fees and ancillary fees related to loan servicing are not considered significant for financial reporting.

Foreclosed Assets: 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.  If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  These assets are recorded in other assets on the balance sheets as other real estate owned (“OREO”).  OREO totaled $171 thousand at December 31, 2017 and $482 thousand at December 31, 2016.  Operating costs after acquisition are expensed.

Premises and Equipment: Land is carried at cost.  Premises and equipment are stated at cost, less accumulated depreciation.  Buildings and related components are depreciated using the straight-line method with useful lives ranging from 5 to 40 years.  Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 10 years.

Restricted Stock: The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  The Bank is also a member of and owns stock in the Federal Reserve Bank.  These stocks are carried at cost, classified as restricted securities included in other assets, and periodically evaluated for impairment based on ultimate recovery of par value.  Restricted stock totaled $10.5 million at December 31, 2017 and $9.6 million at December 31, 2016.  Both cash and stock dividends are reported as income.

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key officers.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows.  If impaired, the assets are recorded at fair value.

Goodwill and Other Intangible Assets: Goodwill resulting from a business combination is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but tested for impairment at least annually.  The Company has selected September 30 as the date to perform the annual goodwill impairment tests associated with the acquisition of the Trust, NAI, First National Bank, FNCB, Bowers and Monitor.  Intangible assets with definite useful lives are amortized over their estimated useful lives.  Goodwill is the only intangible asset with an indefinite life on the balance sheet.  Core deposit intangible assets arising from bank acquisitions are amortized over their estimated useful lives of 7 to 8 years.  Non-compete contracts are amortized on a straight line basis, over the term of the agreements.  Customer relationship and trade name intangibles are amortized over a range of 13 to 15 years on an accelerated method.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees, based on the fair value of these awards at the date of grant.  The market price of the Company’s common stock at the grant date is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Retirement Plans: Employee 401(k) and profit sharing plan expense is the amount of matching and discretionary contributions.  Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service.

Earnings per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock equity awards.  Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss).  Other comprehensive income (loss) 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.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any matters currently that will have a material effect on the financial statements.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank (“FRB”) was required to meet regulatory reserve and clearing requirements.  The Company had deposits with the FRB of $30.0 million at December 31, 2017 and $16.4 million at December 31, 2016.

Equity: Treasury stock is carried at cost.

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank and Trust to the holding company or by the holding company to shareholders.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions as more fully disclosed in Note 6.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments: Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank, Trust and Retirement Consulting segments.  The Company discloses segment information in Note 21.

Adoption of New Accounting Standards and Newly Issued, Not Yet Effective Accounting Standards: During February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income(Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects and will improve the usefulness of information reported to financial statement users.  However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The standard takes effect for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  Early adoption of the amendments in this Update is permitted for public business entities for reporting periods for which financial statements have not yet been issued and for all other entities for reporting periods for which financial statements have not yet been made available for issuance.  The Company early adopted this ASU and the result was a reclass of $106 thousand from accumulated other comprehensive income to retained earnings and is reflected in the Consolidated Financial Statements as of December 31, 2017.

During April of 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.  Under current U.S. GAAP, a premium is typically amortized to the maturity date when a callable debt security is purchased at a premium, even if the holder is certain the call will be exercised.  As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.  The new standard shortens the amortization period for the premium to the earliest call date to more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument.  The standard takes effect for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  The Company does not plan to early adopt this ASU, which is permitted, including adoption in an interim period.  The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test.  Instead, under the new guidance, an entity is to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not plan on early adoption of this ASU.  The adoption of this guidance is not expected to have an impact on the Company's Consolidated Financial Statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.  Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.  Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.  Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances.  Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  ASU 2016-13 is effective for public companies for annual periods beginning after December 15, 2019, including interim periods within those fiscal years.  Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.  The Company has begun to accumulate historical credit information, established an internal committee and engaged a software provider in preparation for testing of the systems during 2019.  Adoption of ASU 2016-13 will happen on January 1, 2020.  Management has not determined the full impact the new standard will have on the Consolidated Financial Statements.

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09: Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted.  The Company adopted the ASU 2016-09 on January 1, 2017 which had no material impact on its Consolidated Financial Statements and disclosures.

In February 2016, FASB issued ASU 2016-02 (Topic 842): Leases.  The main objective of ASU 2016-02 is to provide users with useful, transparent and complete information about leasing transactions.  ASU 2016-02 requires the rights and obligations associated with leasing arrangements be reflected on the balance sheet to increase transparency and comparability among organizations.  Under the updated guidance, lessees will be required to recognize a right-to-use asset and a liability to make a lease payment and disclose key information about leasing arrangements.  ASU 2016-02 is effective for public companies for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.  The Company will adopt this ASU when required.  As disclosed in footnote 7, certain leases that the Company has in place could require the capitalization of $2.9 million on the balance sheet as an asset and a related liability in the same amount with no income statement effect.  Therefore the Company does not expect the adoption of this ASU to have a material impact to its Consolidated Financial Statements.

In January 2016, FASB issued ASU 2016-01: Financial Instruments – Overall (Subtopic 825-10):  Recognition and Measurement of Financial Assets and Financial Liabilities.  The main objective of ASU 2016-01 is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information.  ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments.  Some of the amendments in ASU 2016-01  include the following: 1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others.  The amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The Company adopted this ASU 2016-01 on January 1, 2018 and realized no material impact on its Consolidated Financial Statements.

In May 2014, FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606).  The ASU creates a new topic, Topic 606, to provide guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017.  The new guidance will be effective for the Company's year ending December 31, 2018 and has been adopted as of January 1, 2018. The use of the modified retrospective approach will be used for implementing this standard. Interest income is outside of the scope of the new standard and will not be impacted by the adoption of the standard. A review of the Company’s noninterest income has not resulted in a change in revenue recognition since adoption, nor is it expected to change revenue recognition prospectively in a significant way.

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Business Combinations

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Business Combinations

NOTE 2 - BUSINESS COMBINATIONS

On August 15, 2017, the Company completed the acquisition of Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank.  The transaction involved both cash and 465,787 shares of stock totaling $7.5 million.  Pursuant to the terms of the merger agreement, common shareholders of Monitor were entitled to elect to receive consideration in cash or in common shares, without par value, of the Farmers National Banc Corp., subject to an overall limitation of 85% of the Monitor common shares being exchanged for Farmers common shares and 15% exchanged for cash.  The per share cash consideration of $769.38 was equal to Monitor’s March 31 tangible book value multiplied by 1.25.  Based on the volume weighted average closing price of Farmers common shares for the 20 trading days ended August 11, 2017 of $14.04, the final stock exchange ratio was 54.80, resulting in an implied value per Monitor common share of $769.38.

Goodwill of $1.0 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $673 thousand is related to core deposits.

The following table summarizes the consideration paid for Monitor and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,154
Stock		6,358
Fair value of total consideration transferred	$	7,512
Fair value of assets acquired
Cash and due from financial institutions	$	17,673
Securities available for sale		3,057
Loans, net		19,315
Premises and equipment		192
Core deposit intangible		673
Other assets		272
Total assets acquired		41,182
Fair value of liabilities assumed
Deposits		34,586
Accrued interest payable and other liabilities		121
Total liabilities		34,707
Net assets acquired	$	6,475
Goodwill created		1,037
Total net assets acquired	$	7,512

Valuation of some assets acquired or created including but not limited to net loans and goodwill are preliminary and could be subject to change.  Any changes are not expected to be material.

On June 1, 2016, the Bank completed the acquisition of the Bowers, and merged all activity of Bowers with Insurance, the Bank’s wholly-owned insurance agency subsidiary.  The Bowers group is engaged in selling insurance, including commercial, farm, home, and auto property/casualty insurance and will help to meet the needs of all the Company’s customers.  The transaction involved both cash and 123,280 shares of stock totaling $3.2 million, including up to $1.2 million of future payments, contingent upon Bowers meeting performance targets, with an estimated fair value at the acquisition date of $880 thousand. The first of three contingent payments were made during 2017, totaling $316 thousand, which reduced the earnout payable to $564 thousand.  Subsequent to the payment, management conducted a valuation of the contingent consideration and found it necessary to reduce the future payment liability associated with the remaining two payments down to $200 thousand at year end 2017.  The $364 thousand was recorded as a reduction to acquisition related costs in the current year on the Consolidated Statements of Income as of December 31, 2017.  The Company conducts this valuation work annually.  The acquisition is part of the Company’s plan to increase the levels of noninterest income and to complement the existing insurance services currently being offered.

Goodwill of $1.8 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $1.6 million is related to client relationships, company name and noncompetition agreements.

The following table summarizes the consideration paid for Bowers and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,137
Stock		1,138
Contingent consideration		880
Fair value of total consideration transferred	$	3,155
Fair value of assets acquired
Cash	$	64
Premises and equipment		290
Other assets		34
Total assets		388
Fair value of liabilities assumed		124
Net assets acquired	$	264
Assets and liabilities arising from acquisition
Identified intangible assets		1,630
Deferred tax liability		(588	)
Goodwill created		1,849
Total net assets acquired	$	3,155

The following table presents pro forma information as if the above acquisitions that occurred in 2016 and 2017 actually took place at the beginning of 2016.  The pro forma information includes adjustments for merger related costs, amortization of intangibles arising from the transaction and the related income tax effects.  The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effective on the assumed date.

	2017		2016
Net interest income	$	74,409	$	69,341
Net income	$	22,776	$	20,661
Basic and diluted earnings per share	$	0.83	$	0.77

On October 1, 2015, the Company completed the acquisition of Tri-State, the parent company of FNCB.  The transaction involved both cash and 1,296,517 shares of stock totaling $14.3 million.  Pursuant to the terms of the merger agreement, common shareholders of Tri-State received 1.747 common shares, without par value, of the Company or $14.20 in cash, for each common share of Tri-State, subject to proration provisions specified in the merger agreement that provide for a targeted aggregate split of total consideration consisting of 75% shares of Farmers’ common stock and 25% cash.  Preferred shareholders of Tri-State received $13.60 in cash for each share of Series A Preferred Stock, without par value, of Tri-State.

Goodwill of $3.0 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $1.2 million is related to core deposits.

On June 19, 2015, the Company completed the acquisition of all outstanding stock of NBOH, the parent company of First National Bank of Orrville.  The transaction involved both cash and 7,262,955 shares of stock totaling $74.8 million.  First National Bank of Orrville branches became branches of Farmers Bank.  Pursuant to the Agreement, each shareholder of NBOH received 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 NBOH being exchanged for stock and 20% for cash.

Goodwill of $26.7 million, which is recorded on the balance sheet, arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the companies.  The goodwill was determined not to be deductible for income tax purposes.  The fair value of other intangible assets of $4.4 million is related to core deposits.

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Securities Available for Sale

12 Months Ended

Dec. 31, 2017

Investments Debt And Equity Securities [Abstract]

Securities Available for Sale

NOTE 3 - SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost and fair value of the available-for-sale securities portfolio at December 31, 2017 and 2016 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2017	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	8,986	$	0	$	(69	)	$	8,917
State and political subdivisions			188,032		3,614		(643	)		191,003
Corporate bonds			1,238		4		(8	)		1,234
Mortgage-backed securities - residential			161,635		419		(1,604	)		160,450
Collateralized mortgage obligations			17,898		0		(777	)		17,121
Small Business Administration			14,608		0		(396	)		14,212
Equity securities			179		216		(1	)		394
Totals		$	392,576	$	4,253	$	(3,498	)	$	393,331

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2016	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	5,970	$	5	$	(54	)	$	5,921
State and political subdivisions			157,014		1,049		(2,760	)		155,303
Corporate bonds			1,343		4		(8	)		1,339
Mortgage-backed securities - residential			171,215		1,019		(2,552	)		169,682
Collateralized mortgage obligations			21,397		1		(705	)		20,693
Small Business Administration			17,236		0		(530	)		16,706
Equity securities			168		185		(2	)		351
Totals		$	374,343	$	2,263	$	(6,611	)	$	369,995

The proceeds from sales of available-for-sale securities and the associated gains and losses were as follows:

		2017			2016			2015
Proceeds	$	54,497		$	11,493		$	102,257
Gross gains		727			389			908
Gross losses		(723	)		(316	)		(814	)

The tax provision related to these net realized gains was $2 thousand, $26 thousand and $33 thousand respectively.

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.

Available for sale		December 31, 2017
		Amortized
Maturity		Cost		Fair Value
Within one year		$	19,061	$	19,030
One to five years			47,277		47,585
Five to ten years			119,195		121,866
Beyond ten years			12,723		12,673
Mortgage-backed securities, collateralized mortgage obligations and    Small Business Administration			194,141		191,783
	Totals	$	392,397	$	392,937

Securities with a carrying amount of $269 million at December 31, 2017 and $242 million at December 31, 2016 were pledged to secure public deposits and repurchase agreements. Trust had securities, with a carrying amount of $100 thousand, at year-end 2017 and 2016, pledged to qualify as a fiduciary in the State of Ohio.

In each year, there were no holdings of any other issuer that exceeded 10% of stockholders’ equity, other than the U.S. Government, its agencies and its sponsored entities.

The following table summarizes the investment securities with unrealized losses at December 31, 2017 and 2016 aggregated by major security type and length of time in a continuous unrealized loss position.

2017
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	3,970	$	(34	)	$	1,912	$	(35	)	$	5,882	$	(69	)
State and political subdivisions		33,188		(220	)		25,721		(423	)		58,909		(643	)
Corporate bonds		397		(3	)		383		(5	)		780		(8	)
Mortgage-backed securities - residential		40,072		(400	)		53,760		(1,204	)		93,832		(1,604	)
Collateralized mortgage obligations		1,701		(22	)		15,420		(755	)		17,121		(777	)
Small Business Administration		0		0			14,182		(396	)		14,182		(396	)
Equity securities		22		(1	)		0		0			22		(1	)
Total temporarily impaired	$	79,350	$	(680	)	$	111,378	$	(2,818	)	$	190,728	$	(3,498	)

2016
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	4,015	$	(54	)	$	502	$	0		$	4,517	$	(54	)
State and political subdivisions		92,560		(2,745	)		286		(15	)		92,846		(2,760	)
Corporate bonds		786		(8	)		0		0			786		(8	)
Mortgage-backed securities - residential		98,348		(1,823	)		29,743		(729	)		128,091		(2,552	)
Collateralized mortgage obligations		7,956		(108	)		10,972		(597	)		18,928		(705	)
Small Business Administration		8,770		(205	)		7,890		(325	)		16,660		(530	)
Equity securities		44		(2	)		0		0			44		(2	)
Total temporarily impaired	$	212,479	$	(4,945	)	$	49,393	$	(1,666	)	$	261,872	$	(6,611	)

The Company’s equity securities include local and regional bank holdings.   No other-than-temporary impairments were recognized during 2017, 2016 or 2015.  If an other-than-temporary impairment were to occur, the amount of the impairment recognized in earnings depends on whether an entity intends to sell the security or it is more likely than not it would be required to sell the security before recovery of its amortized cost basis.  The previous amortized cost basis less the impairment recognized in earnings becomes the new amortized cost basis of the investment.

As of December 31, 2017, the Company’s security portfolio consisted of 550 securities, 184 of which were in an unrealized loss position.  The majority of unrealized losses are related to the Company’s holdings in securities issued by state and political subdivisions, mortgage-backed securities - residential, collateralized mortgage obligations and Small Business Administration, as discussed below:

Securities issued by State and Political subdivisions

Unrealized losses on debt securities issued by state and political subdivisions have not been recognized into income.  At December 31, 2017 and 2016 all securities issued by state and political subdivisions have 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.

Mortgage-backed securities - residential

All of the Company’s holdings of mortgage-backed securities—residential at year end 2017 and 2016 were issued by U.S. Government sponsored enterprises.  Unrealized losses on mortgage-backed securities—residential have not been recognized into income.  Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities—residential 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 other-than-temporarily impaired at December 31, 2017 and 2016.

Collateralized mortgage obligations

The Company’s portfolio includes collateralized mortgage obligations issued by U.S. Government sponsored enterprises.  The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality.  The Company does not have the intent to sell these collateralized mortgage obligations and it is likely that it will not be required to sell the securities before their anticipated recovery.  The Company monitors all securities to ensure adequate credit support and as of December 31, 2017 and 2016, the Company believes there is no other-than-temporary impairment.

Small Business Administration

The Company’s holdings of Small Business Administration securities are issued and backed by the full faith and credit of the U.S. Government.  Unrealized losses on these Small Business Administration securities have not been recognized into income.  The Company does not consider these securities to be other-than-temporarily impaired at December 31, 2017 and 2016 because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

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Loans

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Loans

NOTE 4 - LOANS

Loans at year end were as follows:

	2017			2016
Originated loans:
Commercial real estate
Owner occupied	$	140,321		$	109,750
Non-owner occupied		199,080			165,861
Farmland		70,534			34,155
Other		89,025			70,823
Commercial
Commercial and industrial		193,347			171,145
Agricultural		32,587			24,598
Residential real estate
1-4 family residential		272,421			224,222
Home equity lines of credit		71,507			59,642
Consumer
Indirect		155,950			156,633
Direct		28,519			26,663
Other		8,876			7,611
Total originated loans	$	1,262,167		$	1,051,103
Acquired loans:
Commercial real estate
Owner occupied	$	53,031		$	60,928
Non-owner occupied		20,286			24,949
Farmland		47,754			54,204
Other		11,964			14,665
Commercial
Commercial and industrial		27,094			33,626
Agricultural		12,206			16,024
Residential real estate
1-4 family residential		96,759			112,015
Home equity lines of credit		28,755			34,795
Consumer
Direct		14,378			21,681
Other		128			247
Total acquired loans		312,355			373,134
Net deferred loan costs		2,859			3,398
Allowance for loan losses		(12,315	)		(10,852	)
Net loans	$	1,565,066		$	1,416,783

Purchased credit impaired loans

As part of the NBOH acquisition in 2015 the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected.  The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

	2017		2016
Commercial real estate
Owner occupied	$	670	$	689
Non-owner occupied		387		436
Commercial
Commercial and industrial		1,072		1,213
Total outstanding balance	$	2,129	$	2,338
Carrying amount, net of allowance of $0 in 2017 and 2016	$	1,733	$	2,181

Accretable yield, or income expected to be collected, is shown in the table below:

	2017			2016
Beginning balance	$	247		$	323
New loans purchased		0			0
Accretion of income		(77	)		(76	)
Ending balance	$	170		$	247

The key assumptions considered include probability of default and the amount of actual prepayments after the acquisition date.  Prepayments affect the estimated life of the loans and could change the amount of interest income and principal expected to be collected.  In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary.  There were no adjustments to forecasted cash flows that impacted the allowance for loan losses for the years ended December 31, 2017 and 2016.

The following tables present the activity in the allowance for loan losses by portfolio segment for years ended December 31, 2017, 2016 and 2015:

December 31, 2017	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430	$	10,852
Provision for loan losses		298			446			378			1,983			245		3,350
Loans charged off		(207	)		(375	)		(162	)		(2,542	)		0		(3,286	)
Recoveries		592			66			100			641			0		1,399
Total ending allowance balance	$	4,260		$	2,011		$	2,521		$	2,848		$	675	$	12,315

December 31, 2016	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473		$	8,978
Provision for loan losses		784			701			436			1,992			(43	)		3,870
Loans charged off		(349	)		(245	)		(188	)		(2,019	)		0			(2,801	)
Recoveries		15			45			112			633			0			805
Total ending allowance balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430		$	10,852

December 31, 2015	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		857			234			354			1,776			289		3,510
Loans charged off		(536	)		(290	)		(320	)		(2,058	)		0		(3,204	)
Recoveries		130			9			122			779			0		1,040
Total ending allowance balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473	$	8,978

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of December 31, 2017 and 2016.  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:

December 31, 2017	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	0	$	4	$	158	$	0	$	0	$	162
Collectively evaluated for impairment		4,214		1,993		2,322		2,844		675		12,048
Acquired loans collectively evaluated    for impairment		46		14		41		4		0		105
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	4,260	$	2,011	$	2,521	$	2,848	$	675	$	12,315
Loans:
Loans individually evaluated for    impairment	$	658	$	260	$	4,559	$	59	$	0	$	5,536
Loans collectively evaluated for    impairment		497,168		225,312		339,143		198,370		0		1,259,993
Acquired loans		131,926		38,503		125,182		14,507		0		310,118
Acquired with deteriorated credit    quality		948		786		0		0		0		1,734
Total ending loans balance	$	630,700	$	264,861	$	468,884	$	212,936	$	0	$	1,577,381

December 31, 2016	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	86	$	111	$	52	$	0	$	0	$	249
Collectively evaluated for impairment		3,491		1,763		2,153		2,766		430		10,603
Acquired loans collectively evaluated    for impairment		0		0		0		0		0		0
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	3,577	$	1,874	$	2,205	$	2,766	$	430	$	10,852
Loans:
Loans individually evaluated for    impairment	$	3,457	$	477	$	3,308	$	96	$	0	$	7,338
Loans collectively evaluated for    impairment		376,632		195,146		280,215		196,081		0		1,048,074
Acquired loans		153,228		48,536		146,672		21,923		0		370,359
Acquired with deteriorated credit    quality		968		896		0		0		0		1,864
Total ending loans balance	$	534,285	$	245,055	$	430,195	$	218,100	$	0	$	1,427,635

The following tables present information related to impaired loans by class of loans as of and for years ended December 31, 2017, 2016 and 2015.  The recorded investment in loans excludes accrued interest receivable due to immateriality.

December 31, 2017	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	659	$	658	$	0	$	767	$	10
Non-owner occupied		0		0		0		68		2
Farmland		0		0		0		12		0
Commercial
Commercial and industrial		214		192		0		184		4
Agricultural		0		0		0		10		0
Residential real estate
1-4 family residential		2,923		2,697		0		2,343		138
Home equity lines of credit		341		319		0		299		15
Consumer		145		59		0		74		11
Subtotal		4,282		3,925		0		3,757		180
With an allowance recorded:
Commercial real estate
Owner occupied		0		0		0		134		6
Non-owner occupied		0		0		0		640		28
Farmland		0		0		0		63		0
Commercial
Commercial and industrial		68		68		4		71		4
Agricultural		0		0		0		50		0
Residential real estate
1-4 family residential		1,409		1,387		84		837		29
Home equity lines of credit		159		156		74		95		3
Consumer		0		0		0		2		0
Subtotal		1,636		1,611		162		1,892		70
Total	$	5,918	$	5,536	$	162	$	5,649	$	250

December 31, 2016	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,974	$	1,456	$	0	$	1,601	$	70
Non-owner occupied		332		331		0		334		5
Commercial
Commercial and industrial		205		184		0		641		15
Residential real estate
1-4 family residential		2,650		2,403		0		2,302		145
Home equity lines of credit		195		179		0		221		10
Consumer		205		96		0		97		13
Subtotal		5,561		4,649		0		5,196		258
With an allowance recorded:
Commercial real estate
Owner occupied		173		173		14		874		29
Non-owner occupied		1,118		1,118		30		1,283		67
Farmland		380		379		42		127		0
Commercial
Commercial and industrial		75		75		4		103		4
Agricultural		219		218		107		73		0
Residential real estate
1-4 family residential		661		642		51		828		36
Home equity lines of credit		84		84		1		85		4
Consumer		0		0		0		1		0
Subtotal		2,710		2,689		249		3,374		140
Total	$	8,271	$	7,338	$	249	$	8,570	$	398

December 31, 2015	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,956	$	2,436	$	0	$	2,080	$	106
Non-owner occupied		343		342		0		372		30
Commercial
Commercial and industrial		834		631		0		433		23
Residential real estate
1-4 family residential		2,575		2,310		0		2,174		147
Home equity lines of credit		283		268		0		260		15
Consumer		214		103		0		81		14
Subtotal		7,205		6,090		0		5,400		335
With an allowance recorded:
Commercial real estate
Owner occupied		1,597		1,595		379		2,008		70
Non-owner occupied		1,480		1,480		50		1,511		79
Commercial
Commercial and industrial		81		81		5		540		4
Residential real estate
1-4 family residential		769		749		61		919		39
Home equity lines of credit		87		87		2		96		4
Subtotal		4,014		3,992		497		5,074		196
Total	$	11,219	$	10,082	$	497	$	10,474	$	531

Cash basis interest income recognized and interest income recognized was materially equal for 2017, 2016 and 2015.

Nonaccrual loans and loans past due 90 days 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 December 31, 2017 and 2016:

	2017				2016
	Nonaccrual		LoansPastDue 90DaysorMore Still Accruing		Nonaccrual		LoansPastDue 90DaysorMore Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	501	$	0	$	958	$	0
Non-owner occupied		0		0		343		0
Farmland		45		0		58		0
Commercial
Commercial and industrial		249		0		400		0
Agricultural		2		0		12		0
Residential real estate
1-4 family residential		2,653		393		1,929		295
Home equity lines of credit		602		8		202		118
Consumer
Indirect		457		361		298		438
Direct		63		153		9		65
Other		0		14		0		16
Total originated loans	$	4,572	$	929	$	4,209	$	932
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	85	$	0
Non-owner occupied		216		0		0		0
Other		0		0		24		0
Farmland		0		0		380		0
Commercial
Commercial and industrial		943		19		961		0
Agricultural		9		0		236		0
Residential real estate
1-4 family residential		613		69		386		545
Home equity lines of credit		170		0		119		109
Consumer
Direct		140		15		89		95
Total acquired loans	$	2,091	$	103	$	2,280	$	749
Total loans	$	6,663	$	1,032	$	6,489	$	1,681

The following tables present the aging of the recorded investment in past due loans as of December 31, 2017 and 2016 by class of loans:

December 31, 2017	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
Originated loans:
Commercial real estate
Owner occupied	$	4	$	340	$	501	$	845	$	139,081	$	139,926
Non-owner occupied		0		0		0		0		198,588		198,588
Farmland		0		0		45		45		70,398		70,443
Other		0		0		0		0		88,703		88,703
Commercial
Commercial and industrial		292		3		249		544		192,335		192,879
Agricultural		74		0		2		76		32,605		32,681
Residential real estate
1-4 family residential		2,044		403		3,046		5,493		266,338		271,831
Home equity lines of credit		155		18		610		783		70,754		71,537
Consumer
Indirect		2,429		829		818		4,076		156,772		160,848
Direct		632		250		216		1,098		27,608		28,706
Other		115		11		14		140		8,736		8,876
Total originated loans:	$	5,745	$	1,854	$	5,501	$	13,100	$	1,251,918	$	1,265,018
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	0	$	0	$	53,051	$	53,051
Non-owner occupied		0		0		216		216		20,042		20,258
Farmland		454		0		0		454		47,301		47,755
Other		0		0		0		0		11,976		11,976
Commercial
Commercial and industrial		327		96		962		1,385		25,709		27,094
Agricultural		87		0		9		96		12,111		12,207
Residential real estate
1-4 family residential		858		77		682		1,617		95,144		96,761
Home equity lines of credit		161		0		170		331		28,424		28,755
Consumer
Direct		380		151		155		686		13,692		14,378
Other		0		1		0		1		127		128
Total acquired loans	$	2,267	$	325	$	2,194	$	4,786	$	307,577	$	312,363
Total loans	$	8,012	$	2,179	$	7,695	$	17,886	$	1,559,495	$	1,577,381

December 31, 2016	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
Originated loans:
Commercial real estate
Owner occupied	$	0	$	0	$	958	$	958	$	108,475	$	109,433
Non-owner occupied		0		0		343		343		165,105		165,448
Farmland		0		0		58		58		34,057		34,115
Other		0		0		0		0		70,542		70,542
Commercial
Commercial and industrial		90		0		400		490		170,242		170,732
Agricultural		0		29		12		41		24,632		24,673
Residential real estate
1-4 family residential		3,368		356		2,224		5,948		217,752		223,700
Home equity lines of credit		77		37		320		434		59,248		59,682
Consumer
Indirect		2,844		696		736		4,276		157,437		161,713
Direct		744		213		74		1,031		25,815		26,846
Other		92		28		16		136		7,476		7,612
Total originated loans:	$	7,215	$	1,359	$	5,141	$	13,715	$	1,040,781	$	1,054,496
Acquired loans:
Commercial real estate
Owner occupied	$	8	$	205	$	85	$	298	$	60,630	$	60,928
Non-owner occupied		134		0		0		134		24,815		24,949
Farmland		83		0		380		463		53,741		54,204
Other		0		0		24		24		14,642		14,666
Commercial
Commercial and industrial		278		0		961		1,239		32,387		33,626
Agricultural		21		0		236		257		15,767		16,024
Residential real estate
1-4 family residential		1,556		504		931		2,991		109,027		112,018
Home equity lines of credit		152		9		228		389		34,406		34,795
Consumer
Direct		938		184		184		1,306		20,376		21,682
Other		100		0		0		100		147		247
Total acquired loans	$	3,270	$	902	$	3,029	$	7,201	$	365,938	$	373,139
Total loans	$	10,485	$	2,261	$	8,170	$	20,916	$	1,406,719	$	1,427,635

Troubled Debt Restructurings:

Total troubled debt restructurings were $5.0 million and $7.0 million at December 31, 2017 and 2016 respectively.  The Company has allocated $68 thousand and $101 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2017 and 2016, respectively.  There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at December 31, 2017 and 2016.  

During the years ending December 31, 2017, 2016 and 2015, 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 permanent increase of the recorded investment in the loan due to a protective advance to pay delinquent real estate taxes or advance new monies; an extension of an interest only period; 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 0.49% to 11.51%.  There were also extensions of the maturity dates on these and other troubled debt restructurings in the range of six months to 132 months.

The following tables present loans by class modified as troubled debt restructurings that occurred during the years ending December 31, 2017, 2016 and 2015:

			Pre- Modification		Post- Modification
December 31, 2017	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	910	$	917
Home equity lines of credit		10		234		234
Indirect		29		161		161
Total originated loans		54	$	1,305	$	1,312
Acquired loans:
Commercial
Commercial and industrial		1	$	13	$	13
Residential real estate
1-4 family residential		3		85		85
Home equity lines of credit		1		57		57
Consumer		2		55		55
Total acquired loans		7	$	210	$	210
Total loans		61	$	1,515	$	1,522

The troubled debt restructurings described above increased the allowance for loan losses by $75 thousand and resulted in charge offs of $75 thousand during the year ended December 31, 2017.

			Pre- Modification		Post- Modification
December 31, 2016	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	436	$	437
Home equity lines of credit		1		40		40
Indirect		26		182		182
Consumer		2		12		12
Total originated loans		44	$	670	$	671
Acquired loans:
Residential real estate
1-4 family residential		4		153		153
Home equity lines of credit		1		18		18
Consumer		2		40		40
Total acquired loans		7	$	211	$	211
Total loans		51	$	881	$	882

The troubled debt restructurings described above increased the allowance for loan losses by $43 thousand and resulted in charge offs of $344 thousand during the year ended December 31, 2016.

			Pre- Modification		Post- Modification
December 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Commercial real estate
Owner occupied		2	$	801	$	801
Commercial
Commercial and industrial		1		8		8
Residential real estate
1-4 family residential		13		760		760
Home equity lines of credit		2		60		60
Indirect		12		104		104
Consumer		1		8		8
Total originated loans		31	$	1,741	$	1,741
Acquired loans:
Commercial
Commercial and industrial		2		957		957
Total loans		33	$	2,698	$	2,698

The troubled debt restructurings described above increased the allowance for loan losses by $101 thousand and resulted in charge offs of $129 thousand during the year ended December 31, 2015.

There were no loans for which there were payment defaults within twelve months following the modification of the troubled debt restructuring during the year December 31, 2017.  A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

There were two commercial real estate loans for $1.2 million, one residential real estate loan for $1 thousand and one home equity line of credit for $10 thousand modified as troubled debt restructurings for which there were payment defaults within twelve months following the modification during the year December 31, 2016.  None of the loans were past due at December 31, 2016.  There was no effect on the provision for loan losses as a result of this default during 2016.

There was one commercial real estate loan for $40 thousand, one residential real estate loan for $1 thousand and one home equity line of credit for $11 thousand modified as troubled debt restructurings for which there were payment defaults within twelve months following the modification during the year December 31, 2015.  All three loans were past due at December 31, 2015.  There was no effect of the provision for loan losses as a result of this default during 2015.

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.  They 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.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

December 31, 2017	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	137,913	$	442	$	1,571	$	139,926
Non-owner occupied		198,043		419		126		198,588
Farmland		70,354		44		45		70,443
Other		88,421		36		246		88,703
Commercial
Commercial and industrial		184,444		5,326		3,109		192,879
Agricultural		32,291		192		198		32,681
Total originated loans	$	711,466	$	6,459	$	5,295	$	723,220
Acquired loans:
Commercial real estate
Owner occupied	$	51,133	$	466	$	1,452	$	53,051
Non-owner occupied		19,823		63		372		20,258
Farmland		43,694		3,304		757		47,755
Other		11,299		567		110		11,976
Commercial
Commercial and industrial		25,286		2		1,806		27,094
Agricultural		11,200		554		453		12,207
Total acquired loans	$	162,435	$	4,956	$	4,950	$	172,341
Total loans	$	873,901	$	11,415	$	10,245	$	895,561

December 31, 2016	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	106,448	$	490	$	2,495	$	109,433
Non-owner occupied		162,465		522		2,461		165,448
Farmland		34,057		0		58		34,115
Other		69,947		325		270		70,542
Commercial
Commercial and industrial		167,062		2,720		950		170,732
Agricultural		24,395		253		25		24,673
Total originated loans	$	564,374	$	4,310	$	6,259	$	574,943
Acquired loans:
Commercial real estate
Owner occupied	$	58,655	$	707	$	1,566	$	60,928
Non-owner occupied		23,577		1,195		177		24,949
Farmland		53,039		0		1,165		54,204
Other		14,060		464		142		14,666
Commercial
Commercial and industrial		30,543		311		2,772		33,626
Agricultural		14,856		685		483		16,024
Total acquired loans	$	194,730	$	3,362	$	6,305	$	204,397
Total loans	$	759,104	$	7,672	$	12,564	$	779,340

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses.  For residential, consumer and indirect 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 and indirect auto loans based on payment activity.  Nonperforming loans are loans past due 90 days and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
December 31, 2017	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	268,785	$	70,927	$	160,030	$	28,490	$	8,862
Nonperforming		3,046		610		818		216		14
Total originated loans	$	271,831	$	71,537	$	160,848	$	28,706	$	8,876
Acquired loans:
Performing		96,079		28,585		0		14,223		128
Nonperforming		682		170		0		155		0
Total acquired loans	$	96,761	$	28,755	$	0	$	14,378	$	128
Total loans	$	368,592	$	100,292	$	160,848	$	43,084	$	9,004

	Residential Real Estate				Consumer
December 31, 2016	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	221,476	$	59,362	$	160,977	$	26,772	$	7,596
Nonperforming		2,224		320		736		74		16
Total originated loans	$	223,700	$	59,682	$	161,713	$	26,846	$	7,612
Acquired loans:
Performing		111,087		34,567		0		21,498		247
Nonperforming		931		228		0		184		0
Total acquired loans	$	112,018	$	34,795	$	0	$	21,682	$	247
Total loans	$	335,718	$	94,477	$	161,713	$	48,528	$	7,859

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Loan Servicing

12 Months Ended

Dec. 31, 2017

Transfers And Servicing [Abstract]

Loan Servicing

NOTE 5 – LOAN SERVICING

The Company began servicing loans upon the acquisition of First National Bank’s servicing portfolio in June 2015.  Mortgage loans serviced for others are not reported as assets.  The principal balances of these loans at year-end are as follows:

	2017		2016
Mortgage loan portfolio serviced for:
FHLMC	$	179,253	$	121,274

Custodial escrow balances maintained in connection with serviced loans were $1.4 million at December 31, 2017 and $961 thousand at December 31, 2016. 

Mortgage servicing rights is recorded on the balance sheets as other assets.  Activity for mortgage servicing rights for years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
Servicing rights:
Beginning balance	$	854		$	453		$	347
Additions		701			611			166
Amortization to expense		(313	)		(210	)		(60	)
Ending balance	$	1,242		$	854		$	453

There was no valuation allowance required for mortgage servicing rights at December 31, 2017, 2016 and 2015.

XML

Fair Value

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value

NOTE 6 - 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 used 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 years ended December 31, 2017 and 2016 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 are summarized below:

	Fair Value Measurements at December 31, 2017 Using:
	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	$	8,917	$	0	$	8,917	$	0
State and political subdivisions		191,003		0		191,003		0
Corporate bonds		1,234		0		1,234		0
Mortgage-backed securities-residential		160,450		0		160,442		8
Collateralized mortgage obligations		17,121		0		17,121		0
Small Business Administration		14,212		0		14,212		0
Equity securities		394		394		0		0
Total investment securities	$	393,331	$	394	$	392,929	$	8
Loan yield maintenance provisions	$	653	$	0	$	653	$	0
Financial Liabilities
Interest rate swaps	$	653	$	0	$	653	$	0

	Fair Value Measurements at December 31, 2016 Using:
	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	$	5,921	$	0	$	5,921	$	0
State and political subdivisions		155,303		0		155,303		0
Corporate bonds		1,339		0		1,339		0
Mortgage-backed securities-residential		169,682		0		169,670		12
Collateralized mortgage obligations		20,693		0		20,693		0
Small Business Administration		16,706		0		16,706		0
Equity securities		351		351		0		0
Total investment securities	$	369,995	$	351	$	369,632	$	12
Loan yield maintenance provisions	$	685	$	0	$	685	$	0
Financial Liabilities
Interest rate swaps	$	685	$	0	$	685	$	0

There were no significant transfers between Level 1 and Level 2 during 2017 or 2016.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31:

	Investment Securities Available-for-sale (Level 3)
	2017			2016			2015
Beginning Balance	$	12		$	15		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0			0
Repayments, calls and maturities		(4	)		(3	)		(1	)
Acquired and/or purchased		0			0			6
Ending Balance	$	8		$	12		$	15

There is no impact to earnings as a result of fair value measurements on items valued on a recurring basis, using level 3 inputs.

Assets Measured on a Non-Recurring Basis

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

	Fair Value Measurements
	at December 31, 2017 Using:
	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
1–4 family residential	$	740	$	0	$	0	$	740
Consumer		2		0		0		2

	Fair Value Measurements
	at December 31, 2016 Using:
	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	$	23	$	0	$	0	$	23
Farmland		339		0		0		339
Commercial
Agricultural		113		0		0		113
1–4 family residential		77		0		0		77
Consumer		2		0		0		2
Other real estate owned
1–4 family residential		16		0		0		16

Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $851 thousand, with a valuation allowance of $109 thousand at December 31, 2017, resulting in an additional provision for loan losses of $272 thousand for the year ending December 31, 2017.  At December 31, 2016, impaired loans had a principal balance of $727 thousand, with a valuation allowance of $173 thousand.  Loans measured at fair value throughout the year resulted in an additional provision for loan losses of $139 thousand for the year ending December 31, 2016.  Excluded from the fair value of impaired loans, at December 31, 2017 and 2016, discussed above are $763 thousand and $2.0 million of loans classified as troubled debt restructurings and measured using the present value of cash flows, which is not considered an exit price.

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.

At December 31, 2017, other real estate owned measured at fair value less costs to sell, had a zero net carrying amount.  During the year ended December 31, 2017 the Company charged down one property reflecting an updated appraisal which resulted in a write-down of $23 thousand.  The Company had $36 thousand related write downs during the year ended December 31, 2016.

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 year ended 2017 and 2016:

December 31, 2017	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Residential	$	740	Sales comparison	Adjustment for differences between comparable sales	(15.76%) - 27.92% 0.53%
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(21.98%) - 21.98% (0.00%)

December 31, 2016	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Commercial real estate	$	23	Sales comparison	Adjustment for differences between comparable sales	(24.02%)
		339	Quoted price for loan relationship	Offer price	35.77%
Commercial		113	Quoted price for loan relationship	Offer price	34.98%
Residential		77	Sales comparison	Adjustment for differences between comparable sales	(12.97%) - 14.22% (3.38%)
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(20.00%) - 20.00% (0.00%)
Other real estate owned - residential		16	Sales comparison	Adjustment for differences between comparable sales	(10.36%) - 17.10% (1.90%)

Fair Value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments measured on a recurring basis and not previously presented, at December 31, 2017 and December 31, 2016 are as follows:

			Fair Value Measurements at December 31, 2017 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	57,614	$	17,785	$	39,829	$	0	$	57,614
Restricted stock		10,491	n/a		n/a		n/a		n/a
Loans held for sale		272		0		283		0		283
Loans, net		1,565,066		0		0		1,569,381		1,569,381
Accrued interest receivable		6,669		0		2,255		4,414		6,669
Financial liabilities
Deposits		1,604,719		1,340,814		259,346		0		1,600,160
Short-term borrowings		289,565		0		289,565		0		289,565
Long-term borrowings		6,994		0		6,690		0		6,690
Accrued interest payable		633		46		587		0		633

			Fair Value Measurements at December 31, 2016 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	41,778	$	19,678	$	22,100	$	0	$	41,778
Restricted stock		9,583	n/a		n/a		n/a		n/a
Loans held for sale		355		0		365		0		365
Loans, net		1,416,783		0		0		1,406,951		1,406,951
Accrued interest receivable		5,504		0		1,924		3,580		5,504
Financial liabilities
Deposits		1,524,756		1,289,037		232,410		0		1,521,447
Short-term borrowings		198,460		0		198,460		0		198,460
Long-term borrowings		15,036		0		15,009		0		15,009
Accrued interest payable		507		35		472		0		507

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 the average of 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 l, 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 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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Premises and Equipment

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Premises and Equipment

NOTE 7—PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows:

		2017			2016
Land	$	4,775		$	4,972
Buildings		24,692			25,064
Furniture, fixtures and equipment		13,739			14,169
Leasehold Improvements		482			466
		43,688			44,671
Less accumulated depreciation		(21,402	)		(21,446	)
NET BOOK VALUE	$	22,286		$	23,225

Depreciation expense was $1.6 million for year ended December 31, 2017, $1.7 million for year ended December 31, 2016 and $1.5 million for year ended December 31, 2015.

During August 2017 the Company added one location in Holmes County as part of the Monitor acquisition.  All fixed assets were recorded at their fair market value.

During June 2016 the Company added one location with the addition of Bowers Insurance Group in Trumbull County.  All fixed assets were recorded at their fair market value.

The Company leases certain branch properties under operating leases.  Rent expense was $449, $362, and $332 thousand for 2017, 2016 and 2015, respectively.  In addition to rent expense, under the leases, common area maintenance and property taxes are paid and the amount can fluctuate according to the costs incurred.  Rent commitments, before considering renewal options that generally are present, were as follows:

2018	$	425
2019		419
2020		384
2021		380
2022		270
Thereafter		973
TOTAL	$	2,851

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

NOTE 8—GOODWILL AND INTANGIBLE ASSETS

Goodwill associated with the Company’s recent purchases of Monitor in August 2017, Bowers in June 2016, NBOH in June 2015, Tri-State in October 2015 and other past acquisitions totaled $38.2 million at December 31, 2017 and $37.2 million at December 31, 2016.  The Monitor, Bowers, NBOH and Tri-State acquisitions are more fully described in Note 2.  Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value, which is determined through a two-step impairment test.  Step 1 includes the determination of the carrying value of the reporting units, including the existing goodwill and intangible assets, and estimating the fair value of the reporting units.  When the carrying amount of a reporting unit exceeds its fair value, a second step to the impairment test is required.  Step 2 requires that the implied fair value of the reporting unit’s goodwill be compared to the carrying amount of that goodwill.  If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess.After our annual impairment analysis as of September 30, 2017, the Company determined the fair value of all goodwill exceeded its carrying amount.

Other Intangibles

Core deposit intangible assets associated with the Company’s purchases of Monitor, NBOH and Tri-State totaled $6.3 million.

Other intangible assets were as follows at year end:

	2017					2016
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Other intangible:
Customer relationship intangibles	$	7,210	$	(4,919	)	$	7,210	$	(4,253	)
Non-compete contracts		430		(376	)		430		(357	)
Trade Name		520		(175	)		520		(113	)
Core deposit intangible		6,254		(1,776	)		5,582		(1,029	)
Total	$	14,414	$	(7,246	)	$	13,742	$	(5,752	)

Aggregate amortization expense was $1.5 million for2017 and 2016, and $983 thousand for 2015.

Estimated amortization expense for each of the next five years and thereafter:

2018	$	1,418
2019		1,306
2020		1,203
2021		1,142
2022		1,025
Thereafter		1,074
TOTAL	$	7,168

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Interest Bearing Deposits

12 Months Ended

Dec. 31, 2017

Interest Bearing Deposits [Abstract]

Interest Bearing Deposits

NOTE 9 - INTEREST BEARING DEPOSITS

Time deposits of $250 thousand or more were $51.9 million and $43.3 million at year-end 2017 and 2016.

Following is a summary of scheduled maturities of certificates of deposit during the years following December 31, 2017:

2018	$	92,678
2019		46,243
2020		35,619
2021		55,086
2022		20,424
Thereafter		13,855
TOTAL	$	263,905

Following is a summary of year-end interest bearing deposits:

		2017		2016
Demand	$	440,347	$	378,317
Money Market		253,181		317,079
Savings		234,940		226,770
Certificates of Deposit		263,905		235,720
TOTAL	$	1,192,373	$	1,157,886

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Short-term Borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Short-term Borrowings

NOTE 10 - SHORT-TERM BORROWINGS

The Bank has short-term advances from the FHLB that had maturity dates of less than one year at the time of the advance. All balances are due within one year and can be renewed at the time of maturity.  FHLB advances are secured by pledgings described in the following Long-Term Borrowings footnote.  Balances at year end were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Repurchase advance with a rate of .59% to 1.48% at    December 31, 2017 and 2016	$	125,000		1.47	%	$	100,000		0.63	%
Fixed rate advances with a rate of 1.43% to 1.49% at    December 31, 2017		90,000		1.45	%		0		0.00	%
Cash management advance with rates from 0% to .59%    at December 31, 2017 and 2016		0		0.00	%		20,000		0.59	%
Total advances	$	215,000		1.46	%	$	120,000		0.63	%

Securities sold under repurchase agreements are secured by the Bank’s holdings of debt securities issued by U.S. government sponsored entities and agencies.  These pledged securities which are 105% of the repurchase agreement balances, had a carrying amount of $77.9 million and $82.0 million at year ended 2017 and 2016.

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

	2017			2016			2015
Average balance during the year	$	82,627		$	84,368		$	71,779
Average interest rate during the year		0.13	%		0.07	%		0.07	%
Maximum month-end balance during the year	$	94,208		$	98,687		$	89,574
Weighted average year-end interest rate		0.14	%		0.08	%		0.06	%
Balance at year-end	$	74,215		$	78,110		$	75,482

The following table provides a disaggregation of the obligation by class of collateral pledged for short-term financing obtained through the sales of repurchase agreements:

	2017		2016
Overnight and continuous repurchase agreements
U.S. Treasury and U.S. government sponsored entities	$	4,811	$	6,555
State and political subdivisions		20,696		12,304
Mortgage-backed securities - residential		43,936		52,628
Collateralized mortgage obligations		4,772		6,623
Total borrowings	$	74,215	$	78,110

Management believes the risks associated with the agreements are minimal and in the case of collateral decline the Company has additional investment securities available to adequately pledge as guarantees for the repurchase agreements.

The Bank has access to lines of credit amounting to $20 million at two major domestic banks that are below prime rate. The lines and terms are periodically reviewed by the banks and are generally subject to withdrawal at their discretion.  There were no borrowings under these lines at December 31, 2017 and 2016.

Farmers has two unsecured revolving lines of credit for $6.5 million. The lines can be renewed annually. The lines have interest rates of prime with floors of 3.5% and 4.5%. The outstanding balance on the two lines was $350 thousand at December 31, 2017 and 2016.  The interest rate on the outstanding balance at December 31, 2017 and 2016 was 4.5%.

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Long-Term Borrowings

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Long-Term Borrowings

NOTE 11 - LONG-TERM BORROWINGS

At year end, long-term advances from the FHLB were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Fixed-rate constant payment advance, at rates from 1.20%    to 1.70% at December 31, 2017 and 2016	$	4,785		1.70	%	$	7,876		1.57	%
Convertible and putable fixed-rate advance with a rate of    4.45% at December 31, 2016		0		0.00	%		5,000		4.45	%
Total advances	$	4,785		1.70	%	$	12,876		2.69	%

Long-term and short-term FHLB advances are secured by a blanket pledge of residential mortgage loans totaling $280.2 million and $276.9 million at year end 2017 and 2016.  Based on this collateral, the Bank is eligible to borrow an additional $60.4 million at year end 2017.  Each advance is subject to a prepayment penalty if paid prior to its maturity date.

Scheduled payments of long-term FHLB advances are as follows:

Maturing in:
2018	$	1,075
2019		931
2020		860
2021		792
2022		729
Thereafter		398
TOTAL	$	4,785

The Company added a special purpose entity to hold $2.1 million in Trust Preferred Debenture as part of the Tri-State acquisition in 2015. The debt has a floating rate that is determined quarterly based on the three-month LIBOR.  At December 31, 2017, the interest rate was 3.02%. These securities can be redeemed at any quarter-end.  Final maturity of the Trust Preferred Debenture is December 15, 2036. The balance of the outstanding Trust Preferred Debenture was $2.2 million at year end 2017 and 2016.

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Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

NOTE 12 - COMMITMENTS AND CONTINGENT LIABILITIES

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.  Commitments may expire without being used.  Off-balance-sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated.  The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amounts of financial instruments with off-balance-sheet risk at year end were as follows:

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments and unused lines of credit	$	74,119	$	265,260	$	74,798	$	247,080

Commitments to make loans are generally made for periods of 30 days or less.  Commitments and fixed rate unused lines of credit have interest rates ranging from 2.99% to 16.00% at December 31, 2017 and 0.10% to 18.00% at December 31, 2016.  There were six fixed rate loan commitments for 2016 that has an interest rate of 4.25% to 5.25% and matures within fifteen years.  Variable rate loan commitments had interest rates at December 31, 2016 that ranged from 4.69% to 5.75%.  

Standby letters of credit are considered financial guarantees.  The standby letters of credit have a contractual value of $4.9 million at December 31, 2017 and $4.3 million at December 31, 2016.  The carrying amount of these items on the balance sheet is not material.

Additionally, the Company has committed up to a $8 million subscription in SBIC investment funds.  At December 31, 2017 the Company had invested $5.0 million in these funds.

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Stock Based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

NOTE 13 - STOCK BASED COMPENSATION

During 2017, the Company, with the approval of shareholders, created the 2017 Equity Incentive Plan (the “2017 Plan”).  The 2017 Plan permits the award of up to 800 thousand shares to the Company’s directors and employees to attract and retain exceptional personnel, motivate performance and most importantly to help align the interests of Farmers’ executives with those of the Company’s shareholders. There were 63,248 service time based shares and 64,993 performance based shares granted under the 2017 Plan during the year ended December 31, 2017, as shown in the table below. The actual number of performance based stock awards issued will depend on certain performance conditions which are mainly average return on equity compared to a group of peer companies over a three year vesting period.

During 2012, the Company, with the approval of shareholders, created the 2012 Equity Incentive Plan (the “2012 Plan”).  The 2012 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 no additional shares granted under the Plan during 2017 as detailed in the table below.  Any new restricted stock awards will be issued under the 2017 Plan described above.

The restricted stock awards were granted with a fair value price equal to the market price of the Company’s common stock at the date of grant.  Expense recognized for both Plans was $2.4 million for 2017, $892 thousand for 2016 and $486 thousand for 2015.  As of December 31, 2017, there was $1.3 million of total unrecognized compensation expense related to the non-vested shares granted under the Plan.  The remaining cost is expected to be recognized over the next 2 years.

The following is the activity under the Plans during the years ended December 31, 2017:

	2017 Incentive Plan					2012 Incentive Plan
	Maximum Awarded Units			Weighted Average Grant Date Fair Value		Maximum Awarded Units			Weighted Average Grant Date Fair Value
Beginning balance - nonvested shares		0		$	0.00		499,390		$	8.30
Granted		128,241			13.77		0			0
Vested		0			0		(21,928	)		7.14
Forfeited		(3,623	)		13.53		(12,234	)		8.28
Ending balance - nonvested shares		124,618		$	13.77		465,228		$	8.14

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Regulatory Matters

12 Months Ended

Dec. 31, 2017

Regulatory Capital Requirements [Abstract]

Regulatory Matters

NOTE 14 - REGULATORY MATTERS

Banks and financial 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.  The new minimum capital requirements associated with the Basel Committee on capital and liquidity regulation (Basel III) are being phased in and began on January 1, 2015 and will continue through January 1, 2019.  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 December 31, 2017, the Company and the Bank meet all capital adequacy requirements to which they are subject.

The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”).

The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets.  The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets.

Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements.  The capital conservation buffer began the phase in January 1, 2016 and will increase each year until fully implemented at 2.5% on January 1, 2019.  The capital conservation buffer was 1.25% during 2017 and was 0.625% during 2016.  The buffer required an additional capital amount of $31.5 million at year end 2017 and an additional $19.3 million at year end 2016.  Excluding the additional capital conservation buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%.

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 year-end 2017 and 2016, 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.

Dividend Restrictions: The Company’s principal source of funds for dividend payments is dividends received from the Bank, Trust and NAI.  The Bank and Trust are subject to the dividend restrictions set forth by the Comptroller of the Currency and Ohio Department of Commerce – Division of Financial Institutions, respectively.  The respective regulatory agency must approve declaration of any dividends in excess of the sum of profits for the current year and retained net profits for the preceding two years.  During 2018, the Bank could, without prior approval, declare dividends of approximately $16.2 million plus any 2018 net profits retained to the date of the dividend declaration.  In order to practice trust powers, Trust must maintain a minimum capital of $3 million.  The Trust would also be able to, without prior approval, declare dividends of $400 thousand plus any 2018 net profits retained to the date of the dividend declaration.

Actual and required capital amounts (not including the capital conservation buffer) 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
2017
Common equity tier 1 capital ratio
Consolidated	$	199,201		11.86	%	$	75,573		4.5	%	N/A		N/A
Bank		192,080		11.45	%		75,462		4.5	%		109,001		6.5	%
Total risk based capital ratio
Consolidated		213,725		12.73	%		134,352		8.0	%	N/A		N/A
Bank		204,395		12.19	%		134,155		8.0	%		167,694		10.0	%
Tier I risk based capital ratio
Consolidated		201,410		11.99	%		100,764		6.0	%	N/A		N/A
Bank		192,080		11.45	%		100,616		6.0	%		134,155		8.0	%
Tier I leverage ratio
Consolidated		201,410		9.50	%		84,800		4.0	%	N/A		N/A
Bank		192,080		9.12	%		84,253		4.0	%		105,316		5.0	%
2016
Common equity tier 1 capital ratio
Consolidated	$	180,475		11.69	%	$	69,474		4.5	%	N/A		N/A
Bank		171,064		11.12	%		69,244		4.5	%		100,020		6.5	%
Total risk based capital ratio
Consolidated		193,487		12.53	%		123,509		8.0	%	N/A		N/A
Bank		181,916		11.82	%		123,101		8.0	%		153,877		10.0	%
Tier I risk based capital ratio
Consolidated		182,635		11.83	%		92,632		6.0	%	N/A		N/A
Bank		171,064		11.12	%		92,326		6.0	%		123,101		8.0	%
Tier I leverage ratio
Consolidated		182,635		9.41	%		77,596		4.0	%	N/A		N/A
Bank		171,064		8.91	%		76,792		4.0	%		95,990		5.0	%

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2017

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

NOTE 15 - EMPLOYEE BENEFIT PLANS

The Company has a qualified 401(k) deferred compensation Retirement Savings Plan (the “Savings Plan”).  All employees of the Company who have completed at least 90 days of service and meet certain other eligibility requirements are eligible to participate in the Savings Plan.  Under the terms of the Savings Plan, employees may voluntarily defer a portion of their annual compensation pursuant to section 401(k) of the Internal Revenue Code.  The Company matches a percentage of the participants’ voluntary contributions up to 6% of gross wages.  In addition, at the discretion of the Board of Directors, the Company may make an additional profit sharing contribution to the Savings Plan.  Total expense was $556 thousand, $506 thousand and $431 thousand for the years ended December 31, 2017, 2016 and 2015, respectively.

During 2014 the Company adopted a profit sharing plan to provide associates not participating in a current incentive plan a vehicle for sharing in the success of the Company outside of existing wages and non-monetary benefits.  The Board of Directors approved a profit sharing amount equal to 1% of annual compensation for associates in 2017, 2016 and 2015.  The expense was $103 thousand, $103 thousand and $82 thousand for the years ended December 31, 2017, 2016 and 2015, respectively.

The Company maintains a deferred compensation plan for certain retirees.  Expense under this plan was $8 thousand, $9 thousand and $10 thousand for the years ended December 31, 2017, 2016 and 2015, respectively. The liability under the deferred compensation plan at December 31, 2017 was $133 thousand and $141 thousand at December 31, 2016.

During 2015, the Company established a nonqualified deferred compensation plan for a select group of management or highly compensated eligible individuals.  Under the terms of the plan, eligible individuals may elect to defer receipt of their compensation to a later taxable year.  The Company has recorded both an asset and liability of equal amount that represents the amount of contributions and the payable due to the participants in the plan.  The recorded asset and liability was $566 thousand, $345 thousand and $67 thousand at December 31, 2017, 2016 and 2015, respectively.

As part of the NBOH acquisition the Company has a director retirement and death benefit plan for the benefit of prior members of the Board of Directors of NBOH.  The plan is designed to provide an annual retirement benefit to be paid to each director upon retirement from the Board or attaining age 70.  There are no additional benefits or participants being added to the plan and the liability recorded at December 31, 2017 and 2016 was $1 million. The benefit payment upon satisfying the plan’s requirements is a benefit to the qualifying director until death or a maximum of 15 years.  The expense under this plan was $91 thousand, $130 thousand and $0 in 2017, 2016 and 2015, respectively.   

The Company assumed an employee stock ownership plan (“ESOP”) as part of the Tri-State acquisition that covered substantially all of their employees and officers. The Company terminated this plan during 2017. The trustee had discretionary authority to purchase shares of common stock of Tri-State on the open market.  There were no contributions to the plan in 2017 or 2016.  During acquisition the Tri-State ESOP shares were converted to the Company’s shares and distributed to participants.  The trustee held no shares at December 31, 2017, and 39,690 shares at December 31, 2016.

The Company had a postretirement health care benefit plan that covered individuals retired from the Company that have met certain service and age requirements and certain other active employees that have met similar service requirements.  The Company terminated the plan during 2017.  A benefit was recognized under this plan of $70 thousand, $184 thousand and $12 thousand at December 31, 2017, 2016 and 2015, respectively. Due to the termination of the plan the accrued postretirement benefit liability at December 31, 2017 and 2016 is $0 and $70 thousand, respectively.  Due to the immateriality of the plan, the disclosures required under U.S. generally accepted accounting principles have been omitted.

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 16 - INCOME TAXES

The provision for income taxes (credit) consists of the following:

		2017		2016			2015
Current expense	$	9,451	$	8,642		$	3,046
Deferred expense (benefit)		618		(1,157	)		(547	)
TOTALS	$	10,069	$	7,485		$	2,499

Effective tax rates differ from federal statutory rate of 35% applied to income before income taxes due to the following:

		2017		2016			2015
Statutory tax	$	11,474		$	9,815		$	3,694
Effect of nontaxable interest		(2,054	)		(1,684	)		(1,403	)
Bank owned life insurance, net		(291	)		(283	)		(242	)
Tax credits		(371	)		(367	)		(236	)
Effect of nontaxable insurance premiums		(348	)		(143	)		0
Impact of enactment of federal tax reform		1,793			0			0
Nondeductible acquisition costs		70			40			401
Other		(204	)		107			285
ACTUAL TAX	$	10,069		$	7,485		$	2,499

Deferred tax assets (liabilities) are comprised of the following:

		2017			2016
Deferred tax assets:
Allowance for credit losses	$	2,525		$	3,621
Net unrealized loss on securities available for sale		0			1,522
Deferred and accrued compensation		981			1,922
Deferred loan fees and costs		517			729
Post-retirement benefits		0			25
Nonaccrual loan interest income		416			306
Other-than-temporary impairment		25			196
Restricted stock		647			509
AMT credit carryforward		64			205
Other		73			106
Gross deferred tax assets	$	5,248		$	9,141
Deferred tax liabilities:
Depreciation and amortization	$	(448	)	$	(740	)
Net unrealized gain on securities available for sale		(159	)		0
Federal Home Loan Bank dividends		(656	)		(1,093	)
Purchase accounting adjustments		(744	)		(1,559	)
Mortgage servicing rights		(261	)		(299	)
Prepaid expenses		(277	)		(271	)
Other		(8	)		(15	)
Gross deferred tax liabilities		(2,553	)		(3,977	)
NET DEFERRED TAX ASSET	$	2,695		$	5,164

No valuation allowance for deferred tax assets was recorded at December 31, 2017 and 2016.

At December 31, 2017 and December 31, 2016, the Company had no unrecognized tax benefits recorded.  The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.

The Company has approximately $64 thousand of alternative minimum tax credits that can be carried forward indefinitely.

The Company paid no penalties for the year ended December 31, 2017 or 2016.  There were no amounts accrued for penalties or interest as of December 31, 2017 or 2016.

The Company is subject to U.S. federal income tax. The Company is no longer subject to examination by the federal taxing authority for years prior to 2014.  The tax years 2014—2017 remain open to examination by the U.S. taxing authority.

On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the “Act”), was signed into law.  The Act includes several provisions that will affect the Company’s federal income tax expense, including reducing the federal income tax rate to 21% effective January 1, 2018.  As a result of the rate reduction, the Company is required to re-measure, through income tax expense in the period of enactment, the deferred tax assets and liabilities using the enacted rate at which these items are expected to be recovered or settled.  The re-measurement of the Company’s net deferred tax asset resulted in additional 2017 income tax expense of $1.8 million.

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2017

Comprehensive Income Net Of Tax [Abstract]

Other Comprehensive Income (Loss)

NOTE 17 – OTHER COMPREHENSIVE INCOME (LOSS)

The following table represents the detail of other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015.

	2017
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	5,107		$	(1,788	)	$	3,319
Reclassification adjustment for (gains) losses included in net    income (1)		(4	)		2			(2	)
Net unrealized losses on available-for-sale securities		5,103			(1,786	)		3,317
Change in funded status of post-retirement health plan		(55	)		19			(36	)
Net other comprehensive income (loss)	$	5,048		$	(1,767	)	$	3,281
	2016
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	(4,270	)	$	1,494		$	(2,776	)
Reclassification adjustment for (gains) losses included in net    income (1)		(73	)		26			(47	)
Net unrealized gains on available-for-sale securities		(4,343	)		1,520			(2,823	)
Change in funded status of post-retirement health plan		(156	)		55			(101	)
Net other comprehensive income (loss)	$	(4,499	)	$	1,575		$	(2,924	)
	2015
	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during    the year	$	(1,403	)	$	491		$	(912	)
Reclassification adjustment for (gains) losses included in net    income (1)		(94	)		33			(61	)
Net unrealized losses on available-for-sale securities		(1,497	)		524			(973	)
Change in funded status of post-retirement health plan		20			(7	)		13
Net other comprehensive income (loss)	$	(1,477	)	$	517		$	(960	)

(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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Related Party Transactions

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 18 - RELATED PARTY TRANSACTIONS

Loans to principal officers, directors, and their affiliates during 2017 were as follows:

Beginning balance	$	1,096
New loans		15
Effect of changes in composition of related parties		19,703
Repayments		(293	)
Ending balance	$	20,521

Deposits from principal officers, directors, and their affiliates at year-end 2017 and 2016 were $5.9 million and $12.0 million.

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Earnings Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 19 – EARNINGS PER SHARE

The factors used in the earnings per share computation follow:

	2017		2016		2015
Basic EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares outstanding		27,567,909		27,180,230		22,678,338
Basic earnings per share	$	0.82	$	0.76	$	0.36
Diluted EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares for basic earnings per share		27,567,909		27,180,230		22,678,338
Average unvested restricted stock awards		51,167		29,108		5,232
Weighted average shares for diluted earnings per share		27,619,076		27,209,338		22,683,570
Diluted earnings per share	$	0.82	$	0.76	$	0.36

There were no restricted stock awards that were considered anti-dilutive at year end 2017 and 2016.  There were 193,105 award shares of common stock that were not considered in computing diluted earnings per share because they were anti-dilutive at year end 2015.

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Interest Rate Swaps

12 Months Ended

Dec. 31, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Interest Rate Swaps

NOTE 20 – 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 as of year ended December 31, 2017, 2016 and 2015 is as follows:

	2017			2016			2015
Notional amounts	$	38,481		$	34,360		$	30,763
Weighted average pay rate on interest-rate swaps		4.46	%		4.34	%		4.25	%
Weighted average receive rate on interest-rate swaps		3.81	%		3.04	%		2.70	%
Weighted average maturity (years)		3.2			4.8			4.1
Fair value of interest-rate swaps	$	(653	)	$	(685	)	$	(789	)
Fair value of loan yield maintenance provisions	$	653		$	685		$	789

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 sheet.  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 income statements.  There were no net gains or losses recognized in earnings related to yield maintenance provisions for years ended December 31, 2017, 2016 and 2015.

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Segment Information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment Information

NOTE 21 – 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, trust service fees provide the revenue in trust operations and consulting fees provide the revenues in the retirement consulting operations.  All operations are domestic.

Accounting policies for segments are the same as those described in Note 1.  Segment performance is evaluated using operating income.  Income taxes are calculated on operating income.  Transactions among segments are made at fair value.

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

December 31, 2017	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Assets
Goodwill and other intangibles	$	4,426	$	39,120	$	2,645	$	(822	)	$	45,369
Total assets	$	11,261	$	2,140,508	$	3,365	$	3,935		$	2,159,069

December 31, 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Goodwill and other intangibles	$	4,681	$	38,235	$	2,884	$	(646	)	$	45,154
Total assets	$	10,980	$	1,948,800	$	3,528	$	2,805		$	1,966,113

For year ended 2017	Trust Segment		Bank Segment		Retirement Consulting Segment			Eliminations and Others			Consolidated Totals
Net interest income	$	109	$	73,618	$	0		$	(81	)	$	73,646
Provision for loan losses		0		3,350		0			0		$	3,350
Service fees, security gains and other    noninterest income		6,548		15,986		1,857			(340	)	$	24,051
Noninterest expense		4,801		51,284		1,363			1,029		$	58,477
Amortization and depreciation expense		277		2,558		255			0		$	3,090
Income before taxes		1,579		32,412		239			(1,450	)		32,780
Income tax		455		10,509		(23	)		(872	)	$	10,069
Net Income	$	1,124	$	21,903	$	262		$	(578	)	$	22,711

For year ended 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	95	$	68,113	$	0	$	(88	)	$	68,120
Provision for loan losses		0		3,870		0		0		$	3,870
Service fees, security gains and other    noninterest income		6,341		15,191		1,990		(278	)	$	23,244
Noninterest expense		4,818		48,804		1,380		1,319		$	56,321
Amortization and depreciation expense		305		2,519		307		0		$	3,131
Income before taxes		1,313		28,111		303		(1,685	)	$	28,042
Income tax		462		7,586		107		(670	)	$	7,485
Net Income	$	851	$	20,525	$	196	$	(1,015	)	$	20,557

For year ended 2015	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	65	$	49,705	$	0	$	(33	)	$	49,737
Provision for loan losses		0		3,510		0		0			3,510
Service fees, security gains and other    noninterest income		6,239		10,192		2,130		(255	)		18,306
Noninterest expense		4,719		40,753		1,487		4,562			51,521
Amortization and depreciation expense		339		1,759		360		0			2,458
Income before taxes		1,246		13,875		283		(4,850	)		10,554
Income tax		425		2,968		97		(991	)		2,499
Net Income	$	821	$	10,907	$	186	$	(3,859	)	$	8,055

Bank segment includes Insurance and Investment.

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

NOTE 22 - QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarter Ended 2017	March 31		June 30		September30		December 31
Total interest income	$	18,850	$	20,042	$	20,551	$	21,084
Total interest expense		1,319		1,669		1,876		2,017
Net interest income		17,531		18,373		18,675		19,067
Provision for loan losses		1,050		950		950		400
Noninterest income		5,887		6,055		6,058		6,051
Merger related costs		62		104		270		452
Noninterest expense		14,551		15,660		15,521		14,947
Income before income taxes		7,755		7,714		7,992		9,319
Income taxes *		1,972		2,004		2,009		4,084
Net income	$	5,783	$	5,710	$	5,983	$	5,235
Earnings per share - basic and diluted	$	0.21	$	0.21	$	0.22	$	0.19

Quarter Ended 2016	March 31		June 30		September30		December 31
Total interest income	$	17,747	$	17,950	$	18,332	$	18,469
Total interest expense		1,000		1,061		1,139		1,178
Net interest income		16,747		16,889		17,193		17,291
Provision for loan losses		780		990		1,110		990
Noninterest income		4,946		5,737		6,485		6,076
Merger related costs		289		224		31		19
Noninterest expense		14,155		14,559		15,194		14,981
Income before income taxes		6,469		6,853		7,343		7,377
Income taxes		1,671		1,833		1,967		2,014
Net income	$	4,798	$	5,020	$	5,376	$	5,363
Earnings per share - basic and diluted	$	0.18	$	0.19	$	0.20	$	0.20

* Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Parent Company Only Condensed Financial Information

12 Months Ended

Dec. 31, 2017

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Parent Company Only Condensed Financial Information

NOTE 23—PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Below is condensed financial information of Farmers National Banc Corp. (parent company only).  This information should be read in conjunction with the consolidated financial statements and related notes.

December 31,	2017		2016
BALANCE SHEETS
Assets:
Cash	$	3,614	$	2,620
Investment in subsidiaries
Bank		224,843		198,030
Trust		10,495		10,184
NAI		2,649		2,787
Captive		1,584		646
Securities available for sale		258		234
Other		1,442		1,284
TOTAL ASSETS	$	244,885	$	215,785
Liabilities:
Other liabilities	$	250	$	57
Note payable		350		350
Subordinate debt		2,209		2,160
Other accounts payable		2		2
TOTAL LIABILITIES		2,811		2,569
TOTAL STOCKHOLDERS' EQUITY		242,074		213,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	244,885	$	215,785

STATEMENTS OF INCOME
Years ended December 31,		2017			2016			2015
Income:
Dividends from subsidiaries
Bank	$	8,373		$	5,836		$	23,744
Trust		825			820			750
NAI		400			800			400
Interest and dividends on securities		5			5			2
Security gains/(losses)		0			(19	)		0
Other income		0			28			0
TOTAL INCOME		9,603			7,470			24,896
Interest on borrowings		(103	)		(96	)		(35	)
Other expenses		(2,294	)		(1,997	)		(4,817	)
Income before income tax benefit and undistributed    subsidiary income		7,206			5,377			20,044
Income tax benefit		876			670			991
Equity in undistributed net income of subsidiaries    (dividends in excess of net income)
Bank		13,529			14,688			(12,837	)
Trust		299			31			71
NAI		(138	)		(604	)		(214	)
Captive		939			395			0
NET INCOME	$	22,711		$	20,557		$	8,055

STATEMENTS OF CASH FLOWS
Years ended December 31,		2017			2016			2015
Cash flows from operating activities:
Net income	$	22,711		$	20,557		$	8,055
Adjustments to reconcile net income to net cash
from operating activities:
Security (gains)/losses		0			19			0
Dividends in excess of net income (Equity in    undistributed net income of subsidiary)		(14,629	)		(14,510	)		12,980
Other		78			(368	)		(269	)
NET CASH FROM OPERATING ACTIVITIES		8,160			5,698			20,766
Cash flows from investing activities:
Proceeds from maturities of available for sale securities		0			59			0
Net cash paid in business combinations		(1,154	)		0			(18,077	)
NET CASH FROM INVESTING ACTIVITIES		(1,154	)		59			(18,077	)
Cash flows from financing activities:
Proceeds from reissuance of treasury shares		0			0			0
Repurchase of common shares		0			(168	)		(213	)
Cash dividends paid		(6,012	)		(4,326	)		(2,683	)
NET CASH FROM FINANCING ACTIVITIES		(6,012	)		(4,494	)		(2,896	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		994			1,263			(207	)
Beginning cash and cash equivalents		2,620			1,357			1,564
Ending cash and cash equivalents	$	3,614		$	2,620		$	1,357

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation: The consolidated financial statements include the accounts of Farmers National Banc Corp. and its wholly-owned subsidiaries, The Farmers National Bank of Canfield (“Bank”), Farmers Trust Company (“Trust”), National Associates, Inc. (“NAI”) and Farmers National Captive, Inc. (“Captive”).  Captive was formed during 2016 and is a wholly-owned insurance subsidiary of the Company.  The consolidated financial statements also include the accounts of the Farmers National Bank of Canfield’s subsidiaries; Farmers National Insurance (“Insurance”) and Farmers of Canfield Investment Co. (“Investments”).  The Company acquired Monitor Bancorp, Inc. (“Monitor”), the holding company of Monitor Bank in 2017 and First National Bank of Orrville (“First National Bank”) a subsidiary of National Bancshares Corporation (“NBOH”) and 1^st National Community Bank (“FNCB”) a subsidiary of Tri-State 1^st Banc, Inc. (“Tri-State”) during 2015 and consolidated all activity of these acquisitions within the Bank.  The Bank acquired Bowers Insurance Agency, Inc. (“Bowers”) and consolidated the activity of Bowers with Farmers National Insurance (“Insurance”) during 2016, see Note 2.  Together all entities are referred to as “the Company.” All significant intercompany balances and transactions have been eliminated in consolidation.

Nature of Operations

Nature of Operations: The Company provides full banking services, including wealth management services and mortgage banking activity, through the Bank.  As a national bank, the Bank is subject to regulation of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.  The primary area served by the Bank is the northeastern region of Ohio through thirty nine (39) locations and two branch location in southwestern Pennsylvania.  The Company provides trust services through its Trust subsidiary, retirement consulting services through its NAI subsidiary and insurance services through the Bank’s Insurance subsidiary.  Trust has a state-chartered bank license to conduct trust business from the Ohio Department of Commerce – Division of Financial Institutions.  The primary purpose of Investments is to invest in municipal securities.  Captive provides property and casualty insurance coverage to the Company and its subsidiaries.  Captive pools resources with thirteen other similar insurance subsidiaries of financial institutions to spread a limited amount of risk among the pool members and to provide insurance where not currently available or economically feasible in today’s insurance market place.

Estimates

Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

Cash Flows

Cash Flows: Cash and cash equivalents include cash on hand, deposits with other financial institutions and federal funds sold.  Generally, federal funds are purchased and sold for one-day periods.  Net cash flows are reported for loan and deposit transactions, short term borrowings and other assets and liabilities.

Securities Available for Sale

Securities Available for Sale: Debt securities are classified as available for sale when they might be sold before maturity.  Equity securities with readily determinable fair values are classified as available for sale.  Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount.  Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated.  Gains and losses on sales are recorded on the trade date and determined using the specific identification method.  Purchases are recorded on the trade date.

Management evaluates securities for other-than-temporary impairment (OTTI) on at least a quarterly basis, and more frequently when economic or market conditions warrant.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  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) other-than-temporary impairment (OTTI) related to other factors, which is recognized in other comprehensive income.  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.

Loans Held for Sale

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors.  Net unrealized losses, if any, are charged to earnings.

Mortgage loans held for sale are sold with or without servicing rights released.  Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan losses.  Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate.

Interest income is accrued on the unpaid principal balance.  Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level yield method without anticipating prepayments.  Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection.  Consumer loans are typically charged off no later than 120 days past due.  Past due status is based on the contractual terms of the loan.  In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.  Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

For all classes of loans, when interest accruals are discontinued, interest accrued but not received for loans placed on non-accrual is reversed against interest income.  Interest on such loans is thereafter recorded on a cash-basis or cost-recovery method, until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchased Credit Impaired Loans

Purchased Credit Impaired Loans: The Company purchased loans that have shown evidence of credit deterioration since origination through the acquisition of First National Bank.  These loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan losses.  The Company estimates the amount and timing of expected cash flows for each loan, and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan.  The excess of the loan’s contractual principal and interest over expected cash flows is not recorded.

Over the life of the loan, expected cash flows continue to be estimated.  If the present value of expected cash flows is less than the carrying amount, a loss is recorded as a provision for loan losses.  If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Derivatives

Derivatives: Derivative financial instruments are recognized as assets or liabilities at fair value.  The Company’s derivatives are interest-rate swap agreements, which are used as part of its asset and liability management strategy to help manage its interest rate risk position.  The Company does not use derivatives for trading or balance sheet hedging purposes.  The derivative transactions are considered instruments with no hedging designation, otherwise known as stand-alone derivatives.  Changes in the fair value of the derivatives are reported currently in earnings, as other noninterest income.

Concentration of Credit Risk

Concentration of Credit Risk: There are no significant concentrations of loans to any one industry or customer.  However, most of the Company’s business activity is with customers located within Northeastern Ohio.  Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy of a nine county area.  Loans secured by real estate represent 69.8% of the total portfolio and changes related to the real estate markets are monitored by management.

Allowance for Loan Losses

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable incurred loan losses, increased by the provision for loan losses and decreased by charge-offs less recoveries.  The allowance is based on management’s judgment taking into consideration past loss experience, reviews of individual loans, current economic conditions and other factors considered relevant by management at the financial statement date.  While management uses the best information available to establish the allowance, future adjustments to the allowance may be necessary, which may be material, if economic conditions differ substantially from the assumptions used in estimating the allowance.  If additions to the original estimate of the allowance for loan losses are deemed necessary, they will be reported in earnings in the period in which they become reasonably estimable and probable.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

Acquired loans are individually evaluated and for those purchased loans without evidence of credit deterioration, management evaluates each reviewed loan using an internal grading system with a grade assigned to each loan at the date of acquisition.  To the extent that any purchased loan is not specifically reviewed, such loan is assumed to have characteristics similar to the characteristics of the acquired portfolio of purchased loans.  The grade for each purchased loan without evidence of credit deterioration is reviewed subsequent to the date of acquisition any time a loan is renewed or extended or at any time information becomes available to the Company that provides material insight regarding the loan’s performance, the status of the borrower or the quality or value of the underlying collateral.  To the extent that current information indicates it is probable that the Company will collect all amounts according to the contractual terms thereof, such loan is not considered impaired and is not individually considered in the determination of the required allowance for loan losses.  To the extent that current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof, such loan is considered impaired and is considered in the determination of the required level of allowance.

In determining the day one fair values of purchased loans without evidence of credit deterioration at the date of acquisition, management includes (i) no carry-over of any previously recorded allowance for loan losses and (ii) an adjustment of the unpaid principal balance to reflect an appropriate market rate of interest, given the risk profile and grade assigned to each loan.  This adjustment is accreted into earnings as a yield adjustment, using the effective yield method, over the remaining life of each loan.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired.  A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis for commercial and commercial real estate loans over $750 thousand, individually or in the aggregate, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment and accordingly, they are not separately identified for impairment disclosures.  Non-real estate secured consumer loans in bankruptcy where debt has not been reaffirmed are considered troubled debt restructurings and are evaluated individually to ensure that accurate accounting treatment is in place.

The Company considers the guidance on troubled debt restructuring for individual consumer and residential loans when evaluating for impairment disclosure.  Troubled debt restructurings are measured at the present value of estimated future cash flow using the loan’s effective rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced for the most recent twelve quarters.  The formula for calculating the allowance for loan losses requires that the historical loss percentage be applied to homogeneous and all risk rated loans.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  The following portfolio segments have been identified:

Commercial Loans. Commercial credit is extended to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other projects.  The majority of these borrowers are customers doing business within our geographic regions.  These loans are generally underwritten individually and secured with the assets of the company and the personal guarantee of the business owners.  Commercial loans are made based primarily on the historical and projected cash flow of the borrower and the underlying collateral provided by the borrower.

Commercial Real Estate Loans. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans.  These loans are viewed primarily as cash flow loans and the repayment of these loans is largely dependent on the successful operation of the property.  Loan performance may be adversely affected by factors impacting the general economy or conditions specific to the real estate market such as geographic location and property type.

Consumer Loans. Consumer loans are primarily comprised of loans made directly to consumers and indirectly through automobile dealerships.  These loans have a specific matrix which consists of several factors including debt to income, type of collateral and loan to collateral value, credit history and relationship with the borrower.  Consumer lending uses risk-based pricing in the underwriting process.

Residential Real Estate Loans. Residential mortgage loans represent loans to consumers for the purchase or refinance of a residence.  These loans are generally financed up to 15 years and in most cases, are extended to borrowers to finance their primary residence.  Real estate market values at the time of origination directly affect the amount of credit extended and, in the event of default, subsequent changes in these values may impact the severity of losses.

Servicing Rights

Servicing Rights:When mortgage loans are sold and servicing rights are retained, the servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.  Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.  The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses.  The Company compares the valuation model inputs and results to published industry data to validate the model results and assumptions.  All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non‑interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.  Servicing assets are evaluated for impairment based upon the fair value of the assets compared to carrying amount.  Any impairment is reported as a valuation allowance, to the extent that fair value is less than the capitalized amount for a grouping.  There was no valuation allowance impairment against servicing assets as of December 31, 2017 or 2016.

Servicing fee income is recorded when earned for servicing loans based on a contractual percentage of the outstanding principal or a fixed amount per loan.  The amortization of mortgage servicing rights is netted against loan servicing fee income.  Servicing fees, late fees and ancillary fees related to loan servicing are not considered significant for financial reporting.

Foreclosed Assets

Foreclosed Assets: 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.  If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense.  These assets are recorded in other assets on the balance sheets as other real estate owned (“OREO”).  OREO totaled $171 thousand at December 31, 2017 and $482 thousand at December 31, 2016.  Operating costs after acquisition are expensed.

Premises and Equipment

Premises and Equipment: Land is carried at cost.  Premises and equipment are stated at cost, less accumulated depreciation.  Buildings and related components are depreciated using the straight-line method with useful lives ranging from 5 to 40 years.  Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 10 years.

Restricted Stock

Restricted Stock: The Bank is a member of the FHLB system.  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  The Bank is also a member of and owns stock in the Federal Reserve Bank.  These stocks are carried at cost, classified as restricted securities included in other assets, and periodically evaluated for impairment based on ultimate recovery of par value.  Restricted stock totaled $10.5 million at December 31, 2017 and $9.6 million at December 31, 2016.  Both cash and stock dividends are reported as income.

Bank Owned Life Insurance

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key officers.  Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Long-term Assets

Long-term Assets: Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows.  If impaired, the assets are recorded at fair value.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets: Goodwill resulting from a business combination is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired as of the acquisition date.  Goodwill acquired in a purchase business combination and determined to have an indefinite useful life is not amortized, but tested for impairment at least annually.  The Company has selected September 30 as the date to perform the annual goodwill impairment tests associated with the acquisition of the Trust, NAI, First National Bank, FNCB, Bowers and Monitor.  Intangible assets with definite useful lives are amortized over their estimated useful lives.  Goodwill is the only intangible asset with an indefinite life on the balance sheet.  Core deposit intangible assets arising from bank acquisitions are amortized over their estimated useful lives of 7 to 8 years.  Non-compete contracts are amortized on a straight line basis, over the term of the agreements.  Customer relationship and trade name intangibles are amortized over a range of 13 to 15 years on an accelerated method.

Loan Commitments and Related Financial Instruments

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.

Stock-Based Compensation

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees, based on the fair value of these awards at the date of grant.  The market price of the Company’s common stock at the grant date is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Income Taxes

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities.  Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates.  A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.  The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.  For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

Retirement Plans

Retirement Plans: Employee 401(k) and profit sharing plan expense is the amount of matching and discretionary contributions.  Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service.

Earnings Per Common Share

Earnings per Common Share: Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock equity awards.  Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements.

Comprehensive Income

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss).  Other comprehensive income (loss) 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.

Loss Contingencies

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any matters currently that will have a material effect on the financial statements.

Restrictions on Cash

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank (“FRB”) was required to meet regulatory reserve and clearing requirements.  The Company had deposits with the FRB of $30.0 million at December 31, 2017 and $16.4 million at December 31, 2016.

Equity

Equity: Treasury stock is carried at cost.

Dividend Restriction

Dividend Restriction: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank and Trust to the holding company or by the holding company to shareholders.

Fair Value of Financial Instruments

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions as more fully disclosed in Note 6.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Operating Segments

Operating Segments: Operations are managed and financial performance is primarily aggregated and reported in three lines of business, the Bank, Trust and Retirement Consulting segments.  The Company discloses segment information in Note 21.

Adoption of New Accounting Standards and Newly Issued, Not Yet Effective Accounting Standards

Adoption of New Accounting Standards and Newly Issued, Not Yet Effective Accounting Standards: During February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income(Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.  The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.  Consequently, the amendments eliminate the stranded tax effects and will improve the usefulness of information reported to financial statement users.  However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected.  The standard takes effect for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  Early adoption of the amendments in this Update is permitted for public business entities for reporting periods for which financial statements have not yet been issued and for all other entities for reporting periods for which financial statements have not yet been made available for issuance.  The Company early adopted this ASU and the result was a reclass of $106 thousand from accumulated other comprehensive income to retained earnings and is reflected in the Consolidated Financial Statements as of December 31, 2017.

During April of 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.  Under current U.S. GAAP, a premium is typically amortized to the maturity date when a callable debt security is purchased at a premium, even if the holder is certain the call will be exercised.  As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.  The new standard shortens the amortization period for the premium to the earliest call date to more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument.  The standard takes effect for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018.  The Company does not plan to early adopt this ASU, which is permitted, including adoption in an interim period.  The Company does not expect the adoption of this ASU to have a material impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU eliminates Step 2 from the goodwill impairment test.  Instead, under the new guidance, an entity is to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.  An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not plan on early adoption of this ASU.  The adoption of this guidance is not expected to have an impact on the Company's Consolidated Financial Statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.  Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.  Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.  Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances.  Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.  ASU 2016-13 is effective for public companies for annual periods beginning after December 15, 2019, including interim periods within those fiscal years.  Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.  The Company has begun to accumulate historical credit information, established an internal committee and engaged a software provider in preparation for testing of the systems during 2019.  Adoption of ASU 2016-13 will happen on January 1, 2020.  Management has not determined the full impact the new standard will have on the Consolidated Financial Statements.

In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09: Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in ASU 2016-09 simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted.  The Company adopted the ASU 2016-09 on January 1, 2017 which had no material impact on its Consolidated Financial Statements and disclosures.

In February 2016, FASB issued ASU 2016-02 (Topic 842): Leases.  The main objective of ASU 2016-02 is to provide users with useful, transparent and complete information about leasing transactions.  ASU 2016-02 requires the rights and obligations associated with leasing arrangements be reflected on the balance sheet to increase transparency and comparability among organizations.  Under the updated guidance, lessees will be required to recognize a right-to-use asset and a liability to make a lease payment and disclose key information about leasing arrangements.  ASU 2016-02 is effective for public companies for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted.  The Company will adopt this ASU when required.  As disclosed in footnote 7, certain leases that the Company has in place could require the capitalization of $2.9 million on the balance sheet as an asset and a related liability in the same amount with no income statement effect.  Therefore the Company does not expect the adoption of this ASU to have a material impact to its Consolidated Financial Statements.

In January 2016, FASB issued ASU 2016-01: Financial Instruments – Overall (Subtopic 825-10):  Recognition and Measurement of Financial Assets and Financial Liabilities.  The main objective of ASU 2016-01 is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information.  ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments.  Some of the amendments in ASU 2016-01  include the following: 1) require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and 4) require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value; among others.  The amendments of ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  The Company adopted this ASU 2016-01 on January 1, 2018 and realized no material impact on its Consolidated Financial Statements.

In May 2014, FASB issued ASU 2014-09: Revenue from Contracts with Customers (Topic 606).  The ASU creates a new topic, Topic 606, to provide guidance on revenue recognition for entities that enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets.  The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  Additional disclosures are required to provide quantitative and qualitative information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The new guidance is effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2017.  The new guidance will be effective for the Company's year ending December 31, 2018 and has been adopted as of January 1, 2018. The use of the modified retrospective approach will be used for implementing this standard. Interest income is outside of the scope of the new standard and will not be impacted by the adoption of the standard. A review of the Company’s noninterest income has not resulted in a change in revenue recognition since adoption, nor is it expected to change revenue recognition prospectively in a significant way.

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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2017

Pro Forma Information

The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effective on the assumed date.

	2017		2016
Net interest income	$	74,409	$	69,341
Net income	$	22,776	$	20,661
Basic and diluted earnings per share	$	0.83	$	0.77

Monitor Bancorp, Inc.

Summary of Consideration Paid and Amounts of Assets Acquired and Liabilities Assumed

The following table summarizes the consideration paid for Monitor and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,154
Stock		6,358
Fair value of total consideration transferred	$	7,512
Fair value of assets acquired
Cash and due from financial institutions	$	17,673
Securities available for sale		3,057
Loans, net		19,315
Premises and equipment		192
Core deposit intangible		673
Other assets		272
Total assets acquired		41,182
Fair value of liabilities assumed
Deposits		34,586
Accrued interest payable and other liabilities		121
Total liabilities		34,707
Net assets acquired	$	6,475
Goodwill created		1,037
Total net assets acquired	$	7,512

Bowers Insurance Agency, Inc.

Summary of Consideration Paid and Amounts of Assets Acquired and Liabilities Assumed

The following table summarizes the consideration paid for Bowers and the amounts of the assets acquired and liabilities assumed on the closing date of the acquisition.

Consideration
Cash	$	1,137
Stock		1,138
Contingent consideration		880
Fair value of total consideration transferred	$	3,155
Fair value of assets acquired
Cash	$	64
Premises and equipment		290
Other assets		34
Total assets		388
Fair value of liabilities assumed		124
Net assets acquired	$	264
Assets and liabilities arising from acquisition
Identified intangible assets		1,630
Deferred tax liability		(588	)
Goodwill created		1,849
Total net assets acquired	$	3,155

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Securities Available for Sale (Tables)

12 Months Ended

Dec. 31, 2017

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 securities portfolio at December 31, 2017 and 2016 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2017	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	8,986	$	0	$	(69	)	$	8,917
State and political subdivisions			188,032		3,614		(643	)		191,003
Corporate bonds			1,238		4		(8	)		1,234
Mortgage-backed securities - residential			161,635		419		(1,604	)		160,450
Collateralized mortgage obligations			17,898		0		(777	)		17,121
Small Business Administration			14,608		0		(396	)		14,212
Equity securities			179		216		(1	)		394
Totals		$	392,576	$	4,253	$	(3,498	)	$	393,331

				Gross		Gross
		Amortized		Unrealized		Unrealized
	2016	Cost		Gains		Losses			Fair Value
U.S. Treasury and U.S. government sponsored    entities		$	5,970	$	5	$	(54	)	$	5,921
State and political subdivisions			157,014		1,049		(2,760	)		155,303
Corporate bonds			1,343		4		(8	)		1,339
Mortgage-backed securities - residential			171,215		1,019		(2,552	)		169,682
Collateralized mortgage obligations			21,397		1		(705	)		20,693
Small Business Administration			17,236		0		(530	)		16,706
Equity securities			168		185		(2	)		351
Totals		$	374,343	$	2,263	$	(6,611	)	$	369,995

Proceeds from Sales of Available-for-Sale Securities and the Associated Gains and Losses

The proceeds from sales of available-for-sale securities and the associated gains and losses were as follows:

		2017			2016			2015
Proceeds	$	54,497		$	11,493		$	102,257
Gross gains		727			389			908
Gross losses		(723	)		(316	)		(814	)

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.

Available for sale		December 31, 2017
		Amortized
Maturity		Cost		Fair Value
Within one year		$	19,061	$	19,030
One to five years			47,277		47,585
Five to ten years			119,195		121,866
Beyond ten years			12,723		12,673
Mortgage-backed securities, collateralized mortgage obligations and    Small Business Administration			194,141		191,783
	Totals	$	392,397	$	392,937

Investment Securities with Unrealized Losses

The following table summarizes the investment securities with unrealized losses at December 31, 2017 and 2016 aggregated by major security type and length of time in a continuous unrealized loss position.

2017
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	3,970	$	(34	)	$	1,912	$	(35	)	$	5,882	$	(69	)
State and political subdivisions		33,188		(220	)		25,721		(423	)		58,909		(643	)
Corporate bonds		397		(3	)		383		(5	)		780		(8	)
Mortgage-backed securities - residential		40,072		(400	)		53,760		(1,204	)		93,832		(1,604	)
Collateralized mortgage obligations		1,701		(22	)		15,420		(755	)		17,121		(777	)
Small Business Administration		0		0			14,182		(396	)		14,182		(396	)
Equity securities		22		(1	)		0		0			22		(1	)
Total temporarily impaired	$	79,350	$	(680	)	$	111,378	$	(2,818	)	$	190,728	$	(3,498	)

2016
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss
U.S. Treasury and U.S. government
sponsored entities	$	4,015	$	(54	)	$	502	$	0		$	4,517	$	(54	)
State and political subdivisions		92,560		(2,745	)		286		(15	)		92,846		(2,760	)
Corporate bonds		786		(8	)		0		0			786		(8	)
Mortgage-backed securities - residential		98,348		(1,823	)		29,743		(729	)		128,091		(2,552	)
Collateralized mortgage obligations		7,956		(108	)		10,972		(597	)		18,928		(705	)
Small Business Administration		8,770		(205	)		7,890		(325	)		16,660		(530	)
Equity securities		44		(2	)		0		0			44		(2	)
Total temporarily impaired	$	212,479	$	(4,945	)	$	49,393	$	(1,666	)	$	261,872	$	(6,611	)

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Loans (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Schedule of Loan Balances

Loans at year end were as follows:

	2017			2016
Originated loans:
Commercial real estate
Owner occupied	$	140,321		$	109,750
Non-owner occupied		199,080			165,861
Farmland		70,534			34,155
Other		89,025			70,823
Commercial
Commercial and industrial		193,347			171,145
Agricultural		32,587			24,598
Residential real estate
1-4 family residential		272,421			224,222
Home equity lines of credit		71,507			59,642
Consumer
Indirect		155,950			156,633
Direct		28,519			26,663
Other		8,876			7,611
Total originated loans	$	1,262,167		$	1,051,103
Acquired loans:
Commercial real estate
Owner occupied	$	53,031		$	60,928
Non-owner occupied		20,286			24,949
Farmland		47,754			54,204
Other		11,964			14,665
Commercial
Commercial and industrial		27,094			33,626
Agricultural		12,206			16,024
Residential real estate
1-4 family residential		96,759			112,015
Home equity lines of credit		28,755			34,795
Consumer
Direct		14,378			21,681
Other		128			247
Total acquired loans		312,355			373,134
Net deferred loan costs		2,859			3,398
Allowance for loan losses		(12,315	)		(10,852	)
Net loans	$	1,565,066		$	1,416,783

Purchased Credit Impaired Loans

As part of the NBOH acquisition in 2015 the Company acquired various loans that displayed evidence of deterioration of credit quality since origination and which was probable that all contractually required payments would not be collected.  The carrying amounts and contractually required payments of these loans which are included in the loan balances above are summarized in the following tables:

	2017		2016
Commercial real estate
Owner occupied	$	670	$	689
Non-owner occupied		387		436
Commercial
Commercial and industrial		1,072		1,213
Total outstanding balance	$	2,129	$	2,338
Carrying amount, net of allowance of $0 in 2017 and 2016	$	1,733	$	2,181

Schedule of Accretable Yield or Income Expected to be Collected

Accretable yield, or income expected to be collected, is shown in the table below:

	2017			2016
Beginning balance	$	247		$	323
New loans purchased		0			0
Accretion of income		(77	)		(76	)
Ending balance	$	170		$	247

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 years ended December 31, 2017, 2016 and 2015:

December 31, 2017	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses
Beginning balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430	$	10,852
Provision for loan losses		298			446			378			1,983			245		3,350
Loans charged off		(207	)		(375	)		(162	)		(2,542	)		0		(3,286	)
Recoveries		592			66			100			641			0		1,399
Total ending allowance balance	$	4,260		$	2,011		$	2,521		$	2,848		$	675	$	12,315

December 31, 2016	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses
Beginning balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473		$	8,978
Provision for loan losses		784			701			436			1,992			(43	)		3,870
Loans charged off		(349	)		(245	)		(188	)		(2,019	)		0			(2,801	)
Recoveries		15			45			112			633			0			805
Total ending allowance balance	$	3,577		$	1,874		$	2,205		$	2,766		$	430		$	10,852

December 31, 2015	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		857			234			354			1,776			289		3,510
Loans charged off		(536	)		(290	)		(320	)		(2,058	)		0		(3,204	)
Recoveries		130			9			122			779			0		1,040
Total ending allowance balance	$	3,127		$	1,373		$	1,845		$	2,160		$	473	$	8,978

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment, Based on Impairment Method

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on impairment method as of December 31, 2017 and 2016.  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:

December 31, 2017	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	0	$	4	$	158	$	0	$	0	$	162
Collectively evaluated for impairment		4,214		1,993		2,322		2,844		675		12,048
Acquired loans collectively evaluated    for impairment		46		14		41		4		0		105
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	4,260	$	2,011	$	2,521	$	2,848	$	675	$	12,315
Loans:
Loans individually evaluated for    impairment	$	658	$	260	$	4,559	$	59	$	0	$	5,536
Loans collectively evaluated for    impairment		497,168		225,312		339,143		198,370		0		1,259,993
Acquired loans		131,926		38,503		125,182		14,507		0		310,118
Acquired with deteriorated credit    quality		948		786		0		0		0		1,734
Total ending loans balance	$	630,700	$	264,861	$	468,884	$	212,936	$	0	$	1,577,381

December 31, 2016	Commercial Real Estate		Commercial		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to    loans:
Individually evaluated for impairment	$	86	$	111	$	52	$	0	$	0	$	249
Collectively evaluated for impairment		3,491		1,763		2,153		2,766		430		10,603
Acquired loans collectively evaluated    for impairment		0		0		0		0		0		0
Acquired with deteriorated credit    quality		0		0		0		0		0		0
Total ending allowance balance	$	3,577	$	1,874	$	2,205	$	2,766	$	430	$	10,852
Loans:
Loans individually evaluated for    impairment	$	3,457	$	477	$	3,308	$	96	$	0	$	7,338
Loans collectively evaluated for    impairment		376,632		195,146		280,215		196,081		0		1,048,074
Acquired loans		153,228		48,536		146,672		21,923		0		370,359
Acquired with deteriorated credit    quality		968		896		0		0		0		1,864
Total ending loans balance	$	534,285	$	245,055	$	430,195	$	218,100	$	0	$	1,427,635

Loans Individually Evaluated for Impairment by Class of Loans

The following tables present information related to impaired loans by class of loans as of and for years ended December 31, 2017, 2016 and 2015.  The recorded investment in loans excludes accrued interest receivable due to immateriality.

December 31, 2017	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	659	$	658	$	0	$	767	$	10
Non-owner occupied		0		0		0		68		2
Farmland		0		0		0		12		0
Commercial
Commercial and industrial		214		192		0		184		4
Agricultural		0		0		0		10		0
Residential real estate
1-4 family residential		2,923		2,697		0		2,343		138
Home equity lines of credit		341		319		0		299		15
Consumer		145		59		0		74		11
Subtotal		4,282		3,925		0		3,757		180
With an allowance recorded:
Commercial real estate
Owner occupied		0		0		0		134		6
Non-owner occupied		0		0		0		640		28
Farmland		0		0		0		63		0
Commercial
Commercial and industrial		68		68		4		71		4
Agricultural		0		0		0		50		0
Residential real estate
1-4 family residential		1,409		1,387		84		837		29
Home equity lines of credit		159		156		74		95		3
Consumer		0		0		0		2		0
Subtotal		1,636		1,611		162		1,892		70
Total	$	5,918	$	5,536	$	162	$	5,649	$	250

December 31, 2016	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	1,974	$	1,456	$	0	$	1,601	$	70
Non-owner occupied		332		331		0		334		5
Commercial
Commercial and industrial		205		184		0		641		15
Residential real estate
1-4 family residential		2,650		2,403		0		2,302		145
Home equity lines of credit		195		179		0		221		10
Consumer		205		96		0		97		13
Subtotal		5,561		4,649		0		5,196		258
With an allowance recorded:
Commercial real estate
Owner occupied		173		173		14		874		29
Non-owner occupied		1,118		1,118		30		1,283		67
Farmland		380		379		42		127		0
Commercial
Commercial and industrial		75		75		4		103		4
Agricultural		219		218		107		73		0
Residential real estate
1-4 family residential		661		642		51		828		36
Home equity lines of credit		84		84		1		85		4
Consumer		0		0		0		1		0
Subtotal		2,710		2,689		249		3,374		140
Total	$	8,271	$	7,338	$	249	$	8,570	$	398

December 31, 2015	UnpaidPrincipal Balance		Recorded Investment		Allowancefor LoanLosses Allocated		AverageRecorded Investment		InterestIncome Recognized
With no related allowance recorded:
Commercial real estate
Owner occupied	$	2,956	$	2,436	$	0	$	2,080	$	106
Non-owner occupied		343		342		0		372		30
Commercial
Commercial and industrial		834		631		0		433		23
Residential real estate
1-4 family residential		2,575		2,310		0		2,174		147
Home equity lines of credit		283		268		0		260		15
Consumer		214		103		0		81		14
Subtotal		7,205		6,090		0		5,400		335
With an allowance recorded:
Commercial real estate
Owner occupied		1,597		1,595		379		2,008		70
Non-owner occupied		1,480		1,480		50		1,511		79
Commercial
Commercial and industrial		81		81		5		540		4
Residential real estate
1-4 family residential		769		749		61		919		39
Home equity lines of credit		87		87		2		96		4
Subtotal		4,014		3,992		497		5,074		196
Total	$	11,219	$	10,082	$	497	$	10,474	$	531

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

Nonaccrual loans and loans past due 90 days 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 December 31, 2017 and 2016:

	2017				2016
	Nonaccrual		LoansPastDue 90DaysorMore Still Accruing		Nonaccrual		LoansPastDue 90DaysorMore Still Accruing
Originated loans:
Commercial real estate
Owner occupied	$	501	$	0	$	958	$	0
Non-owner occupied		0		0		343		0
Farmland		45		0		58		0
Commercial
Commercial and industrial		249		0		400		0
Agricultural		2		0		12		0
Residential real estate
1-4 family residential		2,653		393		1,929		295
Home equity lines of credit		602		8		202		118
Consumer
Indirect		457		361		298		438
Direct		63		153		9		65
Other		0		14		0		16
Total originated loans	$	4,572	$	929	$	4,209	$	932
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	85	$	0
Non-owner occupied		216		0		0		0
Other		0		0		24		0
Farmland		0		0		380		0
Commercial
Commercial and industrial		943		19		961		0
Agricultural		9		0		236		0
Residential real estate
1-4 family residential		613		69		386		545
Home equity lines of credit		170		0		119		109
Consumer
Direct		140		15		89		95
Total acquired loans	$	2,091	$	103	$	2,280	$	749
Total loans	$	6,663	$	1,032	$	6,489	$	1,681

Schedule of Investment in Past Due Loans

The following tables present the aging of the recorded investment in past due loans as of December 31, 2017 and 2016 by class of loans:

December 31, 2017	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
Originated loans:
Commercial real estate
Owner occupied	$	4	$	340	$	501	$	845	$	139,081	$	139,926
Non-owner occupied		0		0		0		0		198,588		198,588
Farmland		0		0		45		45		70,398		70,443
Other		0		0		0		0		88,703		88,703
Commercial
Commercial and industrial		292		3		249		544		192,335		192,879
Agricultural		74		0		2		76		32,605		32,681
Residential real estate
1-4 family residential		2,044		403		3,046		5,493		266,338		271,831
Home equity lines of credit		155		18		610		783		70,754		71,537
Consumer
Indirect		2,429		829		818		4,076		156,772		160,848
Direct		632		250		216		1,098		27,608		28,706
Other		115		11		14		140		8,736		8,876
Total originated loans:	$	5,745	$	1,854	$	5,501	$	13,100	$	1,251,918	$	1,265,018
Acquired loans:
Commercial real estate
Owner occupied	$	0	$	0	$	0	$	0	$	53,051	$	53,051
Non-owner occupied		0		0		216		216		20,042		20,258
Farmland		454		0		0		454		47,301		47,755
Other		0		0		0		0		11,976		11,976
Commercial
Commercial and industrial		327		96		962		1,385		25,709		27,094
Agricultural		87		0		9		96		12,111		12,207
Residential real estate
1-4 family residential		858		77		682		1,617		95,144		96,761
Home equity lines of credit		161		0		170		331		28,424		28,755
Consumer
Direct		380		151		155		686		13,692		14,378
Other		0		1		0		1		127		128
Total acquired loans	$	2,267	$	325	$	2,194	$	4,786	$	307,577	$	312,363
Total loans	$	8,012	$	2,179	$	7,695	$	17,886	$	1,559,495	$	1,577,381

December 31, 2016	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
Originated loans:
Commercial real estate
Owner occupied	$	0	$	0	$	958	$	958	$	108,475	$	109,433
Non-owner occupied		0		0		343		343		165,105		165,448
Farmland		0		0		58		58		34,057		34,115
Other		0		0		0		0		70,542		70,542
Commercial
Commercial and industrial		90		0		400		490		170,242		170,732
Agricultural		0		29		12		41		24,632		24,673
Residential real estate
1-4 family residential		3,368		356		2,224		5,948		217,752		223,700
Home equity lines of credit		77		37		320		434		59,248		59,682
Consumer
Indirect		2,844		696		736		4,276		157,437		161,713
Direct		744		213		74		1,031		25,815		26,846
Other		92		28		16		136		7,476		7,612
Total originated loans:	$	7,215	$	1,359	$	5,141	$	13,715	$	1,040,781	$	1,054,496
Acquired loans:
Commercial real estate
Owner occupied	$	8	$	205	$	85	$	298	$	60,630	$	60,928
Non-owner occupied		134		0		0		134		24,815		24,949
Farmland		83		0		380		463		53,741		54,204
Other		0		0		24		24		14,642		14,666
Commercial
Commercial and industrial		278		0		961		1,239		32,387		33,626
Agricultural		21		0		236		257		15,767		16,024
Residential real estate
1-4 family residential		1,556		504		931		2,991		109,027		112,018
Home equity lines of credit		152		9		228		389		34,406		34,795
Consumer
Direct		938		184		184		1,306		20,376		21,682
Other		100		0		0		100		147		247
Total acquired loans	$	3,270	$	902	$	3,029	$	7,201	$	365,938	$	373,139
Total loans	$	10,485	$	2,261	$	8,170	$	20,916	$	1,406,719	$	1,427,635

Schedule of Loans By Class Modified as Troubled Debt Restructurings

The following tables present loans by class modified as troubled debt restructurings that occurred during the years ending December 31, 2017, 2016 and 2015:

			Pre- Modification		Post- Modification
December 31, 2017	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	910	$	917
Home equity lines of credit		10		234		234
Indirect		29		161		161
Total originated loans		54	$	1,305	$	1,312
Acquired loans:
Commercial
Commercial and industrial		1	$	13	$	13
Residential real estate
1-4 family residential		3		85		85
Home equity lines of credit		1		57		57
Consumer		2		55		55
Total acquired loans		7	$	210	$	210
Total loans		61	$	1,515	$	1,522

			Pre- Modification		Post- Modification
December 31, 2016	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Residential real estate
1-4 family residential		15	$	436	$	437
Home equity lines of credit		1		40		40
Indirect		26		182		182
Consumer		2		12		12
Total originated loans		44	$	670	$	671
Acquired loans:
Residential real estate
1-4 family residential		4		153		153
Home equity lines of credit		1		18		18
Consumer		2		40		40
Total acquired loans		7	$	211	$	211
Total loans		51	$	881	$	882

			Pre- Modification		Post- Modification
December 31, 2015	Number of		Outstanding Recorded		Outstanding Recorded
Troubled Debt Restructurings:	Loans		Investment		Investment
Originated loans:
Commercial real estate
Owner occupied		2	$	801	$	801
Commercial
Commercial and industrial		1		8		8
Residential real estate
1-4 family residential		13		760		760
Home equity lines of credit		2		60		60
Indirect		12		104		104
Consumer		1		8		8
Total originated loans		31	$	1,741	$	1,741
Acquired loans:
Commercial
Commercial and industrial		2		957		957
Total loans		33	$	2,698	$	2,698

Risk Category of Loans by Class of Loans

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

December 31, 2017	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	137,913	$	442	$	1,571	$	139,926
Non-owner occupied		198,043		419		126		198,588
Farmland		70,354		44		45		70,443
Other		88,421		36		246		88,703
Commercial
Commercial and industrial		184,444		5,326		3,109		192,879
Agricultural		32,291		192		198		32,681
Total originated loans	$	711,466	$	6,459	$	5,295	$	723,220
Acquired loans:
Commercial real estate
Owner occupied	$	51,133	$	466	$	1,452	$	53,051
Non-owner occupied		19,823		63		372		20,258
Farmland		43,694		3,304		757		47,755
Other		11,299		567		110		11,976
Commercial
Commercial and industrial		25,286		2		1,806		27,094
Agricultural		11,200		554		453		12,207
Total acquired loans	$	162,435	$	4,956	$	4,950	$	172,341
Total loans	$	873,901	$	11,415	$	10,245	$	895,561

December 31, 2016	Pass		Special Mention		Sub standard		Total
Originated loans:
Commercial real estate
Owner occupied	$	106,448	$	490	$	2,495	$	109,433
Non-owner occupied		162,465		522		2,461		165,448
Farmland		34,057		0		58		34,115
Other		69,947		325		270		70,542
Commercial
Commercial and industrial		167,062		2,720		950		170,732
Agricultural		24,395		253		25		24,673
Total originated loans	$	564,374	$	4,310	$	6,259	$	574,943
Acquired loans:
Commercial real estate
Owner occupied	$	58,655	$	707	$	1,566	$	60,928
Non-owner occupied		23,577		1,195		177		24,949
Farmland		53,039		0		1,165		54,204
Other		14,060		464		142		14,666
Commercial
Commercial and industrial		30,543		311		2,772		33,626
Agricultural		14,856		685		483		16,024
Total acquired loans	$	194,730	$	3,362	$	6,305	$	204,397
Total loans	$	759,104	$	7,672	$	12,564	$	779,340

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

The following table presents the recorded investment in residential, consumer and indirect auto loans based on payment activity.  Nonperforming loans are loans past due 90 days and still accruing interest and nonaccrual loans.

	Residential Real Estate				Consumer
December 31, 2017	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	268,785	$	70,927	$	160,030	$	28,490	$	8,862
Nonperforming		3,046		610		818		216		14
Total originated loans	$	271,831	$	71,537	$	160,848	$	28,706	$	8,876
Acquired loans:
Performing		96,079		28,585		0		14,223		128
Nonperforming		682		170		0		155		0
Total acquired loans	$	96,761	$	28,755	$	0	$	14,378	$	128
Total loans	$	368,592	$	100,292	$	160,848	$	43,084	$	9,004

	Residential Real Estate				Consumer
December 31, 2016	1-4 Family Residential		HomeEquityLines of Credit		Indirect		Direct		Other
Originated loans:
Performing	$	221,476	$	59,362	$	160,977	$	26,772	$	7,596
Nonperforming		2,224		320		736		74		16
Total originated loans	$	223,700	$	59,682	$	161,713	$	26,846	$	7,612
Acquired loans:
Performing		111,087		34,567		0		21,498		247
Nonperforming		931		228		0		184		0
Total acquired loans	$	112,018	$	34,795	$	0	$	21,682	$	247
Total loans	$	335,718	$	94,477	$	161,713	$	48,528	$	7,859

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Loan Servicing (Tables)

12 Months Ended

Dec. 31, 2017

Transfers And Servicing [Abstract]

Summary of Principal Balance for Mortgage Loans

The principal balances of these loans at year-end are as follows:

	2017		2016
Mortgage loan portfolio serviced for:
FHLMC	$	179,253	$	121,274

Summary of Activity for Mortgage Servicing Rights

Activity for mortgage servicing rights for years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
Servicing rights:
Beginning balance	$	854		$	453		$	347
Additions		701			611			166
Amortization to expense		(313	)		(210	)		(60	)
Ending balance	$	1,242		$	854		$	453

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Fair Value (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

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

	Fair Value Measurements at December 31, 2017 Using:
	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	$	8,917	$	0	$	8,917	$	0
State and political subdivisions		191,003		0		191,003		0
Corporate bonds		1,234		0		1,234		0
Mortgage-backed securities-residential		160,450		0		160,442		8
Collateralized mortgage obligations		17,121		0		17,121		0
Small Business Administration		14,212		0		14,212		0
Equity securities		394		394		0		0
Total investment securities	$	393,331	$	394	$	392,929	$	8
Loan yield maintenance provisions	$	653	$	0	$	653	$	0
Financial Liabilities
Interest rate swaps	$	653	$	0	$	653	$	0

	Fair Value Measurements at December 31, 2016 Using:
	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	$	5,921	$	0	$	5,921	$	0
State and political subdivisions		155,303		0		155,303		0
Corporate bonds		1,339		0		1,339		0
Mortgage-backed securities-residential		169,682		0		169,670		12
Collateralized mortgage obligations		20,693		0		20,693		0
Small Business Administration		16,706		0		16,706		0
Equity securities		351		351		0		0
Total investment securities	$	369,995	$	351	$	369,632	$	12
Loan yield maintenance provisions	$	685	$	0	$	685	$	0
Financial Liabilities
Interest rate swaps	$	685	$	0	$	685	$	0

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

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31:

	Investment Securities Available-for-sale (Level 3)
	2017			2016			2015
Beginning Balance	$	12		$	15		$	10
Total unrealized gains or losses:
Included in other comprehensive income		0			0			0
Repayments, calls and maturities		(4	)		(3	)		(1	)
Acquired and/or purchased		0			0			6
Ending Balance	$	8		$	12		$	15

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 December 31, 2017 Using:
	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
1–4 family residential	$	740	$	0	$	0	$	740
Consumer		2		0		0		2

	Fair Value Measurements
	at December 31, 2016 Using:
	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	$	23	$	0	$	0	$	23
Farmland		339		0		0		339
Commercial
Agricultural		113		0		0		113
1–4 family residential		77		0		0		77
Consumer		2		0		0		2
Other real estate owned
1–4 family residential		16		0		0		16

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 year ended 2017 and 2016:

December 31, 2017	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Residential	$	740	Sales comparison	Adjustment for differences between comparable sales	(15.76%) - 27.92% 0.53%
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(21.98%) - 21.98% (0.00%)

December 31, 2016	Fair value		Valuation Technique(s)	Unobservable Input(s)	Range Weighted Average
Impaired loans
Commercial real estate	$	23	Sales comparison	Adjustment for differences between comparable sales	(24.02%)
		339	Quoted price for loan relationship	Offer price	35.77%
Commercial		113	Quoted price for loan relationship	Offer price	34.98%
Residential		77	Sales comparison	Adjustment for differences between comparable sales	(12.97%) - 14.22% (3.38%)
Consumer		2	Sales comparison	Adjustment for differences between comparable sales	(20.00%) - 20.00% (0.00%)
Other real estate owned - residential		16	Sales comparison	Adjustment for differences between comparable sales	(10.36%) - 17.10% (1.90%)

Carrying Amounts and Estimated Fair Values of Financial Instruments Measured on Recurring Basis

The carrying amounts and estimated fair values of financial instruments measured on a recurring basis and not previously presented, at December 31, 2017 and December 31, 2016 are as follows:

			Fair Value Measurements at December 31, 2017 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	57,614	$	17,785	$	39,829	$	0	$	57,614
Restricted stock		10,491	n/a		n/a		n/a		n/a
Loans held for sale		272		0		283		0		283
Loans, net		1,565,066		0		0		1,569,381		1,569,381
Accrued interest receivable		6,669		0		2,255		4,414		6,669
Financial liabilities
Deposits		1,604,719		1,340,814		259,346		0		1,600,160
Short-term borrowings		289,565		0		289,565		0		289,565
Long-term borrowings		6,994		0		6,690		0		6,690
Accrued interest payable		633		46		587		0		633

			Fair Value Measurements at December 31, 2016 Using:
	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	41,778	$	19,678	$	22,100	$	0	$	41,778
Restricted stock		9,583	n/a		n/a		n/a		n/a
Loans held for sale		355		0		365		0		365
Loans, net		1,416,783		0		0		1,406,951		1,406,951
Accrued interest receivable		5,504		0		1,924		3,580		5,504
Financial liabilities
Deposits		1,524,756		1,289,037		232,410		0		1,521,447
Short-term borrowings		198,460		0		198,460		0		198,460
Long-term borrowings		15,036		0		15,009		0		15,009
Accrued interest payable		507		35		472		0		507

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Premises and Equipment

Year-end premises and equipment were as follows:

		2017			2016
Land	$	4,775		$	4,972
Buildings		24,692			25,064
Furniture, fixtures and equipment		13,739			14,169
Leasehold Improvements		482			466
		43,688			44,671
Less accumulated depreciation		(21,402	)		(21,446	)
NET BOOK VALUE	$	22,286		$	23,225

Rent Commitments

The Company leases certain branch properties under operating leases.  Rent expense was $449, $362, and $332 thousand for 2017, 2016 and 2015, respectively.  In addition to rent expense, under the leases, common area maintenance and property taxes are paid and the amount can fluctuate according to the costs incurred.  Rent commitments, before considering renewal options that generally are present, were as follows:

2018	$	425
2019		419
2020		384
2021		380
2022		270
Thereafter		973
TOTAL	$	2,851

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Other Intangible Assets

Other intangible assets were as follows at year end:

	2017					2016
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Other intangible:
Customer relationship intangibles	$	7,210	$	(4,919	)	$	7,210	$	(4,253	)
Non-compete contracts		430		(376	)		430		(357	)
Trade Name		520		(175	)		520		(113	)
Core deposit intangible		6,254		(1,776	)		5,582		(1,029	)
Total	$	14,414	$	(7,246	)	$	13,742	$	(5,752	)

Estimated Amortization Expense

Estimated amortization expense for each of the next five years and thereafter:

2018	$	1,418
2019		1,306
2020		1,203
2021		1,142
2022		1,025
Thereafter		1,074
TOTAL	$	7,168

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Interest Bearing Deposits (Tables)

12 Months Ended

Dec. 31, 2017

Interest Bearing Deposits [Abstract]

Summary of Scheduled Maturities of Certificates of Deposit

Following is a summary of scheduled maturities of certificates of deposit during the years following December 31, 2017:

2018	$	92,678
2019		46,243
2020		35,619
2021		55,086
2022		20,424
Thereafter		13,855
TOTAL	$	263,905

Summary of Year-end Interest Bearing Deposits

Following is a summary of year-end interest bearing deposits:

		2017		2016
Demand	$	440,347	$	378,317
Money Market		253,181		317,079
Savings		234,940		226,770
Certificates of Deposit		263,905		235,720
TOTAL	$	1,192,373	$	1,157,886

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Short-term Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Long-term Advances from the Federal Home Loan Bank

At year end, long-term advances from the FHLB were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Fixed-rate constant payment advance, at rates from 1.20%    to 1.70% at December 31, 2017 and 2016	$	4,785		1.70	%	$	7,876		1.57	%
Convertible and putable fixed-rate advance with a rate of    4.45% at December 31, 2016		0		0.00	%		5,000		4.45	%
Total advances	$	4,785		1.70	%	$	12,876		2.69	%

Summary of Securities Sold under Agreements to Repurchase

The securities are held in segregated safekeeping accounts at the Federal Reserve Bank, Trust and the FHLB. Information concerning securities sold under agreements to repurchase is summarized as follows

	2017			2016			2015
Average balance during the year	$	82,627		$	84,368		$	71,779
Average interest rate during the year		0.13	%		0.07	%		0.07	%
Maximum month-end balance during the year	$	94,208		$	98,687		$	89,574
Weighted average year-end interest rate		0.14	%		0.08	%		0.06	%
Balance at year-end	$	74,215		$	78,110		$	75,482

Schedule Disaggregation of the Obligation by the Class of Collateral Pledged for Short-Term Financing Obtained Through the Sales of Repurchase Agreements

The following table provides a disaggregation of the obligation by class of collateral pledged for short-term financing obtained through the sales of repurchase agreements:

	2017		2016
Overnight and continuous repurchase agreements
U.S. Treasury and U.S. government sponsored entities	$	4,811	$	6,555
State and political subdivisions		20,696		12,304
Mortgage-backed securities - residential		43,936		52,628
Collateralized mortgage obligations		4,772		6,623
Total borrowings	$	74,215	$	78,110

Pledged

Summary of Long-term Advances from the Federal Home Loan Bank

FHLB advances are secured by pledgings described in the following Long-Term Borrowings footnote.  Balances at year end were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Repurchase advance with a rate of .59% to 1.48% at    December 31, 2017 and 2016	$	125,000		1.47	%	$	100,000		0.63	%
Fixed rate advances with a rate of 1.43% to 1.49% at    December 31, 2017		90,000		1.45	%		0		0.00	%
Cash management advance with rates from 0% to .59%    at December 31, 2017 and 2016		0		0.00	%		20,000		0.59	%
Total advances	$	215,000		1.46	%	$	120,000		0.63	%

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Long-Term Borrowings (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of Long-term Advances from the Federal Home Loan Bank

At year end, long-term advances from the FHLB were as follows:

	2017					2016
			Weighted					Weighted
			Average					Average
	Amount		Rate			Amount		Rate
Fixed-rate constant payment advance, at rates from 1.20%    to 1.70% at December 31, 2017 and 2016	$	4,785		1.70	%	$	7,876		1.57	%
Convertible and putable fixed-rate advance with a rate of    4.45% at December 31, 2016		0		0.00	%		5,000		4.45	%
Total advances	$	4,785		1.70	%	$	12,876		2.69	%

Schedule Of Federal Home Loan Bank Advances Maturities Table Text Block

Scheduled payments of long-term FHLB advances are as follows:

Maturing in:
2018	$	1,075
2019		931
2020		860
2021		792
2022		729
Thereafter		398
TOTAL	$	4,785

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Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

The Contractual Amounts of Financial Instruments with Off-Balance-Sheet Risk at Year End

The contractual amounts of financial instruments with off-balance-sheet risk at year end were as follows:

	2017				2016
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments and unused lines of credit	$	74,119	$	265,260	$	74,798	$	247,080

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Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Award Activity under Plans

The following is the activity under the Plans during the years ended December 31, 2017:

	2017 Incentive Plan					2012 Incentive Plan
	Maximum Awarded Units			Weighted Average Grant Date Fair Value		Maximum Awarded Units			Weighted Average Grant Date Fair Value
Beginning balance - nonvested shares		0		$	0.00		499,390		$	8.30
Granted		128,241			13.77		0			0
Vested		0			0		(21,928	)		7.14
Forfeited		(3,623	)		13.53		(12,234	)		8.28
Ending balance - nonvested shares		124,618		$	13.77		465,228		$	8.14

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Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2017

Regulatory Capital Requirements [Abstract]

Schedule of Actual and Required Capital Amounts (Not Including Capital Conservation Buffer) and Ratios

Actual and required capital amounts (not including the capital conservation buffer) 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
2017
Common equity tier 1 capital ratio
Consolidated	$	199,201		11.86	%	$	75,573		4.5	%	N/A		N/A
Bank		192,080		11.45	%		75,462		4.5	%		109,001		6.5	%
Total risk based capital ratio
Consolidated		213,725		12.73	%		134,352		8.0	%	N/A		N/A
Bank		204,395		12.19	%		134,155		8.0	%		167,694		10.0	%
Tier I risk based capital ratio
Consolidated		201,410		11.99	%		100,764		6.0	%	N/A		N/A
Bank		192,080		11.45	%		100,616		6.0	%		134,155		8.0	%
Tier I leverage ratio
Consolidated		201,410		9.50	%		84,800		4.0	%	N/A		N/A
Bank		192,080		9.12	%		84,253		4.0	%		105,316		5.0	%
2016
Common equity tier 1 capital ratio
Consolidated	$	180,475		11.69	%	$	69,474		4.5	%	N/A		N/A
Bank		171,064		11.12	%		69,244		4.5	%		100,020		6.5	%
Total risk based capital ratio
Consolidated		193,487		12.53	%		123,509		8.0	%	N/A		N/A
Bank		181,916		11.82	%		123,101		8.0	%		153,877		10.0	%
Tier I risk based capital ratio
Consolidated		182,635		11.83	%		92,632		6.0	%	N/A		N/A
Bank		171,064		11.12	%		92,326		6.0	%		123,101		8.0	%
Tier I leverage ratio
Consolidated		182,635		9.41	%		77,596		4.0	%	N/A		N/A
Bank		171,064		8.91	%		76,792		4.0	%		95,990		5.0	%

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Provision for Income Taxes (Credit)

The provision for income taxes (credit) consists of the following:

		2017		2016			2015
Current expense	$	9,451	$	8,642		$	3,046
Deferred expense (benefit)		618		(1,157	)		(547	)
TOTALS	$	10,069	$	7,485		$	2,499

Effective Tax Rates Differ from Federal Statutory Rate

Effective tax rates differ from federal statutory rate of 35% applied to income before income taxes due to the following:

		2017		2016			2015
Statutory tax	$	11,474		$	9,815		$	3,694
Effect of nontaxable interest		(2,054	)		(1,684	)		(1,403	)
Bank owned life insurance, net		(291	)		(283	)		(242	)
Tax credits		(371	)		(367	)		(236	)
Effect of nontaxable insurance premiums		(348	)		(143	)		0
Impact of enactment of federal tax reform		1,793			0			0
Nondeductible acquisition costs		70			40			401
Other		(204	)		107			285
ACTUAL TAX	$	10,069		$	7,485		$	2,499

Deferred Tax Assets (Liabilities)

Deferred tax assets (liabilities) are comprised of the following:

		2017			2016
Deferred tax assets:
Allowance for credit losses	$	2,525		$	3,621
Net unrealized loss on securities available for sale		0			1,522
Deferred and accrued compensation		981			1,922
Deferred loan fees and costs		517			729
Post-retirement benefits		0			25
Nonaccrual loan interest income		416			306
Other-than-temporary impairment		25			196
Restricted stock		647			509
AMT credit carryforward		64			205
Other		73			106
Gross deferred tax assets	$	5,248		$	9,141
Deferred tax liabilities:
Depreciation and amortization	$	(448	)	$	(740	)
Net unrealized gain on securities available for sale		(159	)		0
Federal Home Loan Bank dividends		(656	)		(1,093	)
Purchase accounting adjustments		(744	)		(1,559	)
Mortgage servicing rights		(261	)		(299	)
Prepaid expenses		(277	)		(271	)
Other		(8	)		(15	)
Gross deferred tax liabilities		(2,553	)		(3,977	)
NET DEFERRED TAX ASSET	$	2,695		$	5,164

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2017

Comprehensive Income Net Of Tax [Abstract]

Schedule of Other Comprehensive Income (Loss)

The following table represents the detail of other comprehensive income (loss) for the years ended December 31, 2017, 2016 and 2015.

	2017
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	5,107		$	(1,788	)	$	3,319
Reclassification adjustment for (gains) losses included in net    income (1)		(4	)		2			(2	)
Net unrealized losses on available-for-sale securities		5,103			(1,786	)		3,317
Change in funded status of post-retirement health plan		(55	)		19			(36	)
Net other comprehensive income (loss)	$	5,048		$	(1,767	)	$	3,281
	2016
	Pre-tax			Tax			After-Tax
Unrealized holding losses on available-for-sale securities during    the year	$	(4,270	)	$	1,494		$	(2,776	)
Reclassification adjustment for (gains) losses included in net    income (1)		(73	)		26			(47	)
Net unrealized gains on available-for-sale securities		(4,343	)		1,520			(2,823	)
Change in funded status of post-retirement health plan		(156	)		55			(101	)
Net other comprehensive income (loss)	$	(4,499	)	$	1,575		$	(2,924	)
	2015
	Pre-tax			Tax			After-Tax
Unrealized holding gains on available-for-sale securities during    the year	$	(1,403	)	$	491		$	(912	)
Reclassification adjustment for (gains) losses included in net    income (1)		(94	)		33			(61	)
Net unrealized losses on available-for-sale securities		(1,497	)		524			(973	)
Change in funded status of post-retirement health plan		20			(7	)		13
Net other comprehensive income (loss)	$	(1,477	)	$	517		$	(960	)

(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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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Loans to Principal Officers, Directors, and Their Affiliates

Loans to principal officers, directors, and their affiliates during 2017 were as follows:

Beginning balance	$	1,096
New loans		15
Effect of changes in composition of related parties		19,703
Repayments		(293	)
Ending balance	$	20,521

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The factors used in the earnings per share computation follow:

	2017		2016		2015
Basic EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares outstanding		27,567,909		27,180,230		22,678,338
Basic earnings per share	$	0.82	$	0.76	$	0.36
Diluted EPS
Net income	$	22,711	$	20,557	$	8,055
Weighted average shares for basic earnings per share		27,567,909		27,180,230		22,678,338
Average unvested restricted stock awards		51,167		29,108		5,232
Weighted average shares for diluted earnings per share		27,619,076		27,209,338		22,683,570
Diluted earnings per share	$	0.82	$	0.76	$	0.36

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Interest Rate Swaps (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary Information about Interest-Rate Swaps

Summary information about these interest-rate swaps as of year ended December 31, 2017, 2016 and 2015 is as follows:

	2017			2016			2015
Notional amounts	$	38,481		$	34,360		$	30,763
Weighted average pay rate on interest-rate swaps		4.46	%		4.34	%		4.25	%
Weighted average receive rate on interest-rate swaps		3.81	%		3.04	%		2.70	%
Weighted average maturity (years)		3.2			4.8			4.1
Fair value of interest-rate swaps	$	(653	)	$	(685	)	$	(789	)
Fair value of loan yield maintenance provisions	$	653		$	685		$	789

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

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

December 31, 2017	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Assets
Goodwill and other intangibles	$	4,426	$	39,120	$	2,645	$	(822	)	$	45,369
Total assets	$	11,261	$	2,140,508	$	3,365	$	3,935		$	2,159,069

December 31, 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Goodwill and other intangibles	$	4,681	$	38,235	$	2,884	$	(646	)	$	45,154
Total assets	$	10,980	$	1,948,800	$	3,528	$	2,805		$	1,966,113

For year ended 2017	Trust Segment		Bank Segment		Retirement Consulting Segment			Eliminations and Others			Consolidated Totals
Net interest income	$	109	$	73,618	$	0		$	(81	)	$	73,646
Provision for loan losses		0		3,350		0			0		$	3,350
Service fees, security gains and other    noninterest income		6,548		15,986		1,857			(340	)	$	24,051
Noninterest expense		4,801		51,284		1,363			1,029		$	58,477
Amortization and depreciation expense		277		2,558		255			0		$	3,090
Income before taxes		1,579		32,412		239			(1,450	)		32,780
Income tax		455		10,509		(23	)		(872	)	$	10,069
Net Income	$	1,124	$	21,903	$	262		$	(578	)	$	22,711

For year ended 2016	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	95	$	68,113	$	0	$	(88	)	$	68,120
Provision for loan losses		0		3,870		0		0		$	3,870
Service fees, security gains and other    noninterest income		6,341		15,191		1,990		(278	)	$	23,244
Noninterest expense		4,818		48,804		1,380		1,319		$	56,321
Amortization and depreciation expense		305		2,519		307		0		$	3,131
Income before taxes		1,313		28,111		303		(1,685	)	$	28,042
Income tax		462		7,586		107		(670	)	$	7,485
Net Income	$	851	$	20,525	$	196	$	(1,015	)	$	20,557

For year ended 2015	Trust Segment		Bank Segment		Retirement Consulting Segment		Eliminations and Others			Consolidated Totals
Net interest income	$	65	$	49,705	$	0	$	(33	)	$	49,737
Provision for loan losses		0		3,510		0		0			3,510
Service fees, security gains and other    noninterest income		6,239		10,192		2,130		(255	)		18,306
Noninterest expense		4,719		40,753		1,487		4,562			51,521
Amortization and depreciation expense		339		1,759		360		0			2,458
Income before taxes		1,246		13,875		283		(4,850	)		10,554
Income tax		425		2,968		97		(991	)		2,499
Net Income	$	821	$	10,907	$	186	$	(3,859	)	$	8,055

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Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarter Ended 2017	March 31		June 30		September30		December 31
Total interest income	$	18,850	$	20,042	$	20,551	$	21,084
Total interest expense		1,319		1,669		1,876		2,017
Net interest income		17,531		18,373		18,675		19,067
Provision for loan losses		1,050		950		950		400
Noninterest income		5,887		6,055		6,058		6,051
Merger related costs		62		104		270		452
Noninterest expense		14,551		15,660		15,521		14,947
Income before income taxes		7,755		7,714		7,992		9,319
Income taxes *		1,972		2,004		2,009		4,084
Net income	$	5,783	$	5,710	$	5,983	$	5,235
Earnings per share - basic and diluted	$	0.21	$	0.21	$	0.22	$	0.19

Quarter Ended 2016	March 31		June 30		September30		December 31
Total interest income	$	17,747	$	17,950	$	18,332	$	18,469
Total interest expense		1,000		1,061		1,139		1,178
Net interest income		16,747		16,889		17,193		17,291
Provision for loan losses		780		990		1,110		990
Noninterest income		4,946		5,737		6,485		6,076
Merger related costs		289		224		31		19
Noninterest expense		14,155		14,559		15,194		14,981
Income before income taxes		6,469		6,853		7,343		7,377
Income taxes		1,671		1,833		1,967		2,014
Net income	$	4,798	$	5,020	$	5,376	$	5,363
Earnings per share - basic and diluted	$	0.18	$	0.19	$	0.20	$	0.20

* Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Dec. 31, 2017 USD ($) Location County_Economy Segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Number of locations served by bank | Location	39
Purchased and sold period of federal fund	1 day
Delinquent period of loans after which interest income is discontinued	90 days
Number of county economy from which credit risk exposure effected | County_Economy	9
Percentage of portfolio loans secured by real estate	69.80%
Impairment on loan	$ 750,000
Valuation allowance impairment against servicing assets	0	$ 0	$ 0
Other real estate owned	171,000	482,000
Restricted stock	$ 10,500,000	9,600,000
Recognized tax amount	50.00%
Deposits with Federal Reserve Bank	$ 30,000,000	16,400,000
Operating segments of business | Segment	3
Capitalization of leases as an asset	$ 2,900,000
Accumulated Other Comprehensive Income
Summary of Significant Accounting Policies (Textual) [Abstract]
Reclassification from accumulated other comprehensive income to retained earnings resulted from early adoption of ASU 2018-02	106,000	0	0
Retained Earnings
Summary of Significant Accounting Policies (Textual) [Abstract]
Reclassification from accumulated other comprehensive income to retained earnings resulted from early adoption of ASU 2018-02	$ (106,000)	0	$ 0
Minimum | Core Deposits
Summary of Significant Accounting Policies (Textual) [Abstract]
Intangible assets amortized period	7 years
Minimum | Customer Relationships
Summary of Significant Accounting Policies (Textual) [Abstract]
Intangible assets amortized period	13 years
Maximum | Core Deposits
Summary of Significant Accounting Policies (Textual) [Abstract]
Intangible assets amortized period	8 years
Maximum | Customer Relationships
Summary of Significant Accounting Policies (Textual) [Abstract]
Intangible assets amortized period	15 years
Buildings | Minimum
Summary of Significant Accounting Policies (Textual) [Abstract]
Range of buildings and furniture depreciated	5 years
Buildings | Maximum
Summary of Significant Accounting Policies (Textual) [Abstract]
Range of buildings and furniture depreciated	40 years
Furniture Fixtures and Equipment | Minimum
Summary of Significant Accounting Policies (Textual) [Abstract]
Range of buildings and furniture depreciated	3 years
Furniture Fixtures and Equipment | Maximum
Summary of Significant Accounting Policies (Textual) [Abstract]
Range of buildings and furniture depreciated	10 years
Mortgage Servicing Rights
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Valuation allowance impairment against servicing assets	$ 0	$ 0
Residential Real Estate
Summary of Significant Accounting Policies (Textual) [Abstract]
Loan financing period	15 years
Southwestern Pennsylvania
Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Number of locations served by bank | Location	2

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Business Combinations (Details Textual) - USD ($) $ / shares in Units, $ in Thousands					1 Months Ended	12 Months Ended
	Aug. 15, 2017	Jun. 01, 2016	Oct. 01, 2015	Jun. 19, 2015	Aug. 11, 2017	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill						$ 38,201	$ 37,164
Monitor Bancorp, Inc.
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition	Aug. 15, 2017
Shares of stock issued for acquisition	465,787
Fair value of total consideration transferred	$ 7,512
Maximum shares exchanged for stock	85.00%
Maximum shares exchanged for cash	15.00%
Cash consideration per share	$ 769.38
Multiplier used to calculate per share cash consideration	1.25
Period of trading days considered for volume weighted average closing price					20 days
Volume weighted average closing price per share of common shares	$ 14.04
Final stock exchange ratio	54.80
Goodwill	$ 1,037
Monitor Bancorp, Inc. | Core Deposits
Business Acquisition [Line Items]
Fair value of other intangible assets	$ 673
Bowers Insurance Agency, Inc.
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition						Jun. 01, 2016
Shares of stock issued for acquisition		123,280
Fair value of total consideration transferred		$ 3,155
Goodwill		1,849
Fair value of other intangible assets		1,630
Contingent future payments		1,200
Contingent consideration		$ 880				$ 316
Contingent consideration future payment liability						200
Reduction to acquisition related costs						364
Bowers Insurance Agency, Inc. | Earnout Payment
Business Acquisition [Line Items]
Contingent consideration						$ 564
Tri-State 1st Banc Incorporation
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition			Oct. 01, 2015
Shares of stock issued for acquisition			1,296,517
Fair value of total consideration transferred			$ 14,300
Cash consideration per share			$ 14.20
Goodwill			$ 3,000
Shares shareholders are entitled to elect to receive per shares			174.70%
Business Acquisition Shares Being Exchanged for Stock			75.00%
Business Acquisition Shares Being Exchanged for Cash			25.00%
Tri-State 1st Banc Incorporation | Series A Preferred Stock
Business Acquisition [Line Items]
Cash consideration per share			$ 13.60
Tri-State 1st Banc Incorporation | Core Deposits
Business Acquisition [Line Items]
Fair value of other intangible assets			$ 1,200
National Bancshares Corporation
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition				Jun. 19, 2015
Shares of stock issued for acquisition				7,262,955
Fair value of total consideration transferred				$ 74,800
Maximum shares exchanged for stock				80.00%
Maximum shares exchanged for cash				20.00%
Cash consideration per share				$ 32.15
Goodwill				$ 26,700
Shares shareholders are entitled to elect to receive per shares				403.40%
National Bancshares Corporation | Core Deposits
Business Acquisition [Line Items]
Fair value of other intangible assets				$ 4,400

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Business Combinations (Details) - USD ($) $ in Thousands	Aug. 15, 2017	Dec. 31, 2017	Dec. 31, 2016
Fair value of liabilities assumed
Goodwill created		$ 38,201	$ 37,164
Monitor Bancorp, Inc.
Consideration
Cash	$ 1,154
Stock	6,358
Fair value of total consideration transferred	7,512
Fair value of assets acquired
Cash and due from financial institutions	17,673
Securities available for sale	3,057
Loans, net	19,315
Premises and equipment	192
Core deposit intangible	673
Other assets	272
Total assets acquired	41,182
Fair value of liabilities assumed
Deposits	34,586
Accrued interest payable and other liabilities	121
Total liabilities	34,707
Net assets acquired	6,475
Goodwill created	1,037
Total net assets acquired	$ 7,512

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Business Combinations (Details 1) - USD ($) $ in Thousands		12 Months Ended
	Jun. 01, 2016	Dec. 31, 2017	Dec. 31, 2016
Assets and liabilities arising from acquisition
Goodwill created		$ 38,201	$ 37,164
Bowers Insurance Agency, Inc.
Consideration
Cash	$ 1,137
Stock	1,138
Contingent consideration	880	$ 316
Fair value of total consideration transferred	3,155
Fair value of assets acquired
Cash	64
Premises and equipment	290
Other assets	34
Total assets acquired	388
Fair value of liabilities assumed	124
Net assets acquired	264
Assets and liabilities arising from acquisition
Identified intangible assets	1,630
Deferred tax liability	(588)
Goodwill created	1,849
Total net assets acquired	$ 3,155

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Business Combinations (Details 2) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Business Combinations [Abstract]
Net interest income	$ 74,409	$ 69,341
Net income	$ 22,776	$ 20,661
Basic and diluted earnings per share	$ 0.83	$ 0.77

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Securities Available for Sale (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 392,576	$ 374,343
Gross Unrealized Gains	4,253	2,263
Gross Unrealized Losses	(3,498)	(6,611)
Fair Value	393,331	369,995
Corporate bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	1,238	1,343
Gross Unrealized Gains	4	4
Gross Unrealized Losses	(8)	(8)
Fair Value	1,234	1,339
Collateralized mortgage obligations
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	17,898	21,397
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(777)	(705)
Fair Value	17,121	20,693
Small Business Administration
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	14,608	17,236
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(396)	(530)
Fair Value	14,212	16,706
U.S. Treasury and U.S. government sponsored entities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	8,986	5,970
Gross Unrealized Gains	0	5
Gross Unrealized Losses	(69)	(54)
Fair Value	8,917	5,921
State and political subdivisions
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	188,032	157,014
Gross Unrealized Gains	3,614	1,049
Gross Unrealized Losses	(643)	(2,760)
Fair Value	191,003	155,303
Mortgage-backed securities - residential
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	161,635	171,215
Gross Unrealized Gains	419	1,019
Gross Unrealized Losses	(1,604)	(2,552)
Fair Value	160,450	169,682
Equity securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	179	168
Gross Unrealized Gains	216	185
Gross Unrealized Losses	(1)	(2)
Fair Value	$ 394	$ 351

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Securities Available for Sale (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Proceeds from sales of available-for-sale securities and the associated gains and losses
Proceeds	$ 54,497	$ 11,493	$ 102,257
Gross gains	727	389	908
Gross losses	$ (723)	$ (316)	$ (814)

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Securities Available for Sale (Details Textual) $ in Thousands		12 Months Ended
		Dec. 31, 2017 USD ($) Securities	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Securities Available for Sale (Additional Textual) [Abstract]
Tax provision related to net realized gain	[1]	$ 2	$ 26	$ 33
Number of securities not more than 10% of stockholder equities | Securities		0
Number of securities | Securities		550
Number of securities on unrealized loss position | Securities		184
Securities Available for Sale (Textual) [Abstract]
Pledged to secure public deposits and repurchase agreements and Pledge to qualify carrying amount of securities		$ 269,000	242,000
Other than temporary impairment charges recognized		0	0	$ 0
Farmers Trust Company
Securities Available for Sale (Textual) [Abstract]
Pledged to secure public deposits and repurchase agreements and Pledge to qualify carrying amount of securities		$ 100	$ 100

[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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Securities Available for Sale (Details 2) $ in Thousands	Dec. 31, 2017 USD ($)
Amortized cost and fair value of the debt securities maturity
Amortized Cost, Within one year	$ 19,061
Amortized Cost, One to five years	47,277
Amortized Cost, Five to ten years	119,195
Amortized Cost, Beyond ten years	12,723
Amortized Cost, Mortgage-backed securities, collateralized mortgage obligations and Small Business Administration	194,141
Amortized Cost, Total	392,397
Fair Value, Within one year	19,030
Fair Value, One to five years	47,585
Fair Value, Five to ten years	121,866
Fair Value, Beyond ten years	12,673
Fair Value, Mortgage-backed securities, collateralized mortgage obligations and Small Business Administration	191,783
Fair Value, Total	$ 392,937

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Securities Available for Sale (Details 3) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	$ 79,350	$ 212,479
Unrealized Losses, Less Than 12 Months	(680)	(4,945)
Fair Value, 12 Months or Longer	111,378	49,393
Unrealized Losses, 12 Months or Longer	(2,818)	(1,666)
Fair Value, Total	190,728	261,872
Unrealized Losses, Total	(3,498)	(6,611)
Corporate bonds
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	397	786
Unrealized Losses, Less Than 12 Months	(3)	(8)
Fair Value, 12 Months or Longer	383	0
Unrealized Losses, 12 Months or Longer	(5)	0
Fair Value, Total	780	786
Unrealized Losses, Total	(8)	(8)
Collateralized mortgage obligations
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	1,701	7,956
Unrealized Losses, Less Than 12 Months	(22)	(108)
Fair Value, 12 Months or Longer	15,420	10,972
Unrealized Losses, 12 Months or Longer	(755)	(597)
Fair Value, Total	17,121	18,928
Unrealized Losses, Total	(777)	(705)
Small Business Administration
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	0	8,770
Unrealized Losses, Less Than 12 Months	0	(205)
Fair Value, 12 Months or Longer	14,182	7,890
Unrealized Losses, 12 Months or Longer	(396)	(325)
Fair Value, Total	14,182	16,660
Unrealized Losses, Total	(396)	(530)
U.S. Treasury and U.S. government sponsored entities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	3,970	4,015
Unrealized Losses, Less Than 12 Months	(34)	(54)
Fair Value, 12 Months or Longer	1,912	502
Unrealized Losses, 12 Months or Longer	(35)	0
Fair Value, Total	5,882	4,517
Unrealized Losses, Total	(69)	(54)
State and political subdivisions
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	33,188	92,560
Unrealized Losses, Less Than 12 Months	(220)	(2,745)
Fair Value, 12 Months or Longer	25,721	286
Unrealized Losses, 12 Months or Longer	(423)	(15)
Fair Value, Total	58,909	92,846
Unrealized Losses, Total	(643)	(2,760)
Mortgage-backed securities - residential
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	40,072	98,348
Unrealized Losses, Less Than 12 Months	(400)	(1,823)
Fair Value, 12 Months or Longer	53,760	29,743
Unrealized Losses, 12 Months or Longer	(1,204)	(729)
Fair Value, Total	93,832	128,091
Unrealized Losses, Total	(1,604)	(2,552)
Equity securities
Investment securities with unrealized losses
Fair Value, Less Than 12 Months	22	44
Unrealized Losses, Less Than 12 Months	(1)	(2)
Fair Value, 12 Months or Longer	0	0
Unrealized Losses, 12 Months or Longer	0	0
Fair Value, Total	22	44
Unrealized Losses, Total	$ (1)	$ (2)

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Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Schedule of loan balances
Total loans	$ 1,565,066	$ 1,416,783
Allowance for loan losses	(12,315)	(10,852)	$ (8,978)	$ (7,632)
Commercial real estate
Schedule of loan balances
Allowance for loan losses	(4,260)	(3,577)	(3,127)	(2,676)
Commercial
Schedule of loan balances
Allowance for loan losses	(2,011)	(1,874)	(1,373)	(1,420)
Residential real estate
Schedule of loan balances
Allowance for loan losses	(2,521)	(2,205)	(1,845)	(1,689)
Consumer
Schedule of loan balances
Allowance for loan losses	(2,848)	(2,766)	$ (2,160)	$ (1,663)
Originated Loans
Schedule of loan balances
Total loans	1,262,167	1,051,103
Originated Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	140,321	109,750
Originated Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	199,080	165,861
Originated Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of loan balances
Loan balances	70,534	34,155
Originated Loans | Commercial real estate, Other | Commercial real estate
Schedule of loan balances
Loan balances	89,025	70,823
Originated Loans | Commercial, Commercial and industrial | Commercial
Schedule of loan balances
Loan balances	193,347	171,145
Originated Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of loan balances
Loan balances	272,421	224,222
Originated Loans | Commercial, Agricultural | Commercial
Schedule of loan balances
Loan balances	32,587	24,598
Originated Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of loan balances
Loan balances	71,507	59,642
Originated Loans | Consumer, Indirect | Consumer
Schedule of loan balances
Loan balances	155,950	156,633
Originated Loans | Consumer, Direct | Consumer
Schedule of loan balances
Loan balances	28,519	26,663
Originated Loans | Consumer, Other | Consumer
Schedule of loan balances
Loan balances	8,876	7,611
Acquired Loans
Schedule of loan balances
Total loans	312,355	373,134
Net deferred loan costs	2,859	3,398
Allowance for loan losses	(12,315)	(10,852)
Acquired Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	53,031	60,928
Acquired Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of loan balances
Loan balances	20,286	24,949
Acquired Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of loan balances
Loan balances	47,754	54,204
Acquired Loans | Commercial real estate, Other | Commercial real estate
Schedule of loan balances
Loan balances	11,964	14,665
Acquired Loans | Commercial, Commercial and industrial | Commercial
Schedule of loan balances
Loan balances	27,094	33,626
Acquired Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of loan balances
Loan balances	96,759	112,015
Acquired Loans | Commercial, Agricultural | Commercial
Schedule of loan balances
Loan balances	12,206	16,024
Acquired Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of loan balances
Loan balances	28,755	34,795
Acquired Loans | Consumer, Direct | Consumer
Schedule of loan balances
Loan balances	14,378	21,681
Acquired Loans | Consumer, Other | Consumer
Schedule of loan balances
Loan balances	$ 128	$ 247

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Loans (Details 1) - National Bancshares Corporation - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable Impaired [Line Items]
Total outstanding balance	$ 2,129	$ 2,338
Carrying amount, net of allowance	1,733	2,181
Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Impaired [Line Items]
Loans acquired with deteriorated credit quality	670	689
Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable Impaired [Line Items]
Loans acquired with deteriorated credit quality	387	436
Commercial, Commercial and industrial | Commercial
Financing Receivable Impaired [Line Items]
Loans acquired with deteriorated credit quality	$ 1,072	$ 1,213

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Loans (Details 1) (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Receivables Acquired with Deteriorated Credit Quality | National Bancshares Corporation
Financing Receivable Impaired [Line Items]
Acquired with deteriorated credit quality, allowances	$ 0	$ 0

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Loans (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Beginning balance	$ 247	$ 323
New loans purchased	0	0
Accretion of income	(77)	(76)
Ending balance	$ 170	$ 247

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Loans (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for loan losses
Beginning balance	$ 10,852	$ 8,978	$ 7,632
Provision for loan losses	3,350	3,870	3,510
Loans charged off	(3,286)	(2,801)	(3,204)
Recoveries	1,399	805	1,040
Ending balance	12,315	10,852	8,978
Commercial real estate
Allowance for loan losses
Beginning balance	3,577	3,127	2,676
Provision for loan losses	298	784	857
Loans charged off	(207)	(349)	(536)
Recoveries	592	15	130
Ending balance	4,260	3,577	3,127
Commercial
Allowance for loan losses
Beginning balance	1,874	1,373	1,420
Provision for loan losses	446	701	234
Loans charged off	(375)	(245)	(290)
Recoveries	66	45	9
Ending balance	2,011	1,874	1,373
Residential real estate
Allowance for loan losses
Beginning balance	2,205	1,845	1,689
Provision for loan losses	378	436	354
Loans charged off	(162)	(188)	(320)
Recoveries	100	112	122
Ending balance	2,521	2,205	1,845
Consumer
Allowance for loan losses
Beginning balance	2,766	2,160	1,663
Provision for loan losses	1,983	1,992	1,776
Loans charged off	(2,542)	(2,019)	(2,058)
Recoveries	641	633	779
Ending balance	2,848	2,766	2,160
Unallocated
Allowance for loan losses
Beginning balance	430	473	184
Provision for loan losses	245	(43)	289
Loans charged off	0	0	0
Recoveries	0	0	0
Ending balance	$ 675	$ 430	$ 473

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Loans (Details 4) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 162	$ 249
Collectively evaluated for impairment	12,048	10,603
Acquired loans collectively evaluated for impairment	105	0
Total ending allowance balance	12,315	10,852	$ 8,978	$ 7,632
Loans:
Loans individually evaluated for impairment	5,536	7,338
Loans collectively evaluated for impairment	1,259,993	1,048,074
Acquired loans	310,118	370,359
Acquired with deteriorated credit quality	895,561	779,340
Loans	1,577,381	1,427,635
Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	1,734	1,864
Commercial real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	86
Collectively evaluated for impairment	4,214	3,491
Acquired loans collectively evaluated for impairment	46	0
Total ending allowance balance	4,260	3,577	3,127	2,676
Loans:
Loans individually evaluated for impairment	658	3,457
Loans collectively evaluated for impairment	497,168	376,632
Acquired loans	131,926	153,228
Loans	630,700	534,285
Commercial real estate | Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	948	968
Commercial
Ending allowance balance attributable to loans:
Individually evaluated for impairment	4	111
Collectively evaluated for impairment	1,993	1,763
Acquired loans collectively evaluated for impairment	14	0
Total ending allowance balance	2,011	1,874	1,373	1,420
Loans:
Loans individually evaluated for impairment	260	477
Loans collectively evaluated for impairment	225,312	195,146
Acquired loans	38,503	48,536
Loans	264,861	245,055
Commercial | Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	786	896
Residential real estate
Ending allowance balance attributable to loans:
Individually evaluated for impairment	158	52
Collectively evaluated for impairment	2,322	2,153
Acquired loans collectively evaluated for impairment	41	0
Total ending allowance balance	2,521	2,205	1,845	1,689
Loans:
Loans individually evaluated for impairment	4,559	3,308
Loans collectively evaluated for impairment	339,143	280,215
Acquired loans	125,182	146,672
Loans	468,884	430,195
Residential real estate | Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	0	0
Consumer
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	2,844	2,766
Acquired loans collectively evaluated for impairment	4	0
Total ending allowance balance	2,848	2,766	2,160	1,663
Loans:
Loans individually evaluated for impairment	59	96
Loans collectively evaluated for impairment	198,370	196,081
Acquired loans	14,507	21,923
Loans	212,936	218,100
Consumer | Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	0	0
Unallocated
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	675	430
Acquired loans collectively evaluated for impairment	0	0
Total ending allowance balance	675	430	$ 473	$ 184
Loans:
Loans individually evaluated for impairment	0	0
Loans collectively evaluated for impairment	0	0
Acquired loans	0	0
Loans	0	0
Unallocated | Receivables Acquired with Deteriorated Credit Quality
Ending allowance balance attributable to loans:
Acquired with deteriorated credit quality	0	0
Loans:
Acquired with deteriorated credit quality	$ 0	$ 0

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Loans (Details 5) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	$ 4,282	$ 5,561	$ 7,205
Unpaid Principal Balance, With an allowance recorded	1,636	2,710	4,014
Unpaid Principal Balance	5,918	8,271	11,219
Recorded Investment, With no related allowance recorded	3,925	4,649	6,090
Recorded Investment, With an allowance recorded	1,611	2,689	3,992
Recorded Investment	5,536	7,338	10,082
Allowance for Loan Losses Allocated	162	249	497
Average Recorded Investment, With no related allowance recorded	3,757	5,196	5,400
Average Recorded Investment, With an allowance recorded	1,892	3,374	5,074
Average Recorded Investment	5,649	8,570	10,474
Interest Income Recognized, With no related allowance recorded	180	258	335
Interest Income Recognized, With related allowance recorded	70	140	196
Interest Income Recognized	250	398	531
Consumer
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	145	205	214
Unpaid Principal Balance, With an allowance recorded	0	0
Recorded Investment, With no related allowance recorded	59	96	103
Recorded Investment, With an allowance recorded	0	0
Allowance for Loan Losses Allocated	0	0
Average Recorded Investment, With no related allowance recorded	74	97	81
Average Recorded Investment, With an allowance recorded	2	1
Interest Income Recognized, With no related allowance recorded	11	13	14
Interest Income Recognized, With related allowance recorded	0	0
Commercial real estate, Owner occupied | Commercial real estate
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	659	1,974	2,956
Unpaid Principal Balance, With an allowance recorded	0	173	1,597
Recorded Investment, With no related allowance recorded	658	1,456	2,436
Recorded Investment, With an allowance recorded	0	173	1,595
Allowance for Loan Losses Allocated	0	14	379
Average Recorded Investment, With no related allowance recorded	767	1,601	2,080
Average Recorded Investment, With an allowance recorded	134	874	2,008
Interest Income Recognized, With no related allowance recorded	10	70	106
Interest Income Recognized, With related allowance recorded	6	29	70
Commercial real estate, Non-owner occupied | Commercial real estate
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	0	332	343
Unpaid Principal Balance, With an allowance recorded	0	1,118	1,480
Recorded Investment, With no related allowance recorded	0	331	342
Recorded Investment, With an allowance recorded	0	1,118	1,480
Allowance for Loan Losses Allocated	0	30	50
Average Recorded Investment, With no related allowance recorded	68	334	372
Average Recorded Investment, With an allowance recorded	640	1,283	1,511
Interest Income Recognized, With no related allowance recorded	2	5	30
Interest Income Recognized, With related allowance recorded	28	67	79
Commercial real estate, Farmland | Commercial real estate
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	0
Unpaid Principal Balance, With an allowance recorded	0	380
Recorded Investment, With no related allowance recorded	0
Recorded Investment, With an allowance recorded	0	379
Allowance for Loan Losses Allocated	0	42
Average Recorded Investment, With no related allowance recorded	12
Average Recorded Investment, With an allowance recorded	63	127
Interest Income Recognized, With no related allowance recorded	0
Interest Income Recognized, With related allowance recorded	0	0
Commercial, Commercial and industrial | Commercial
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	214	205	834
Unpaid Principal Balance, With an allowance recorded	68	75	81
Recorded Investment, With no related allowance recorded	192	184	631
Recorded Investment, With an allowance recorded	68	75	81
Allowance for Loan Losses Allocated	4	4	5
Average Recorded Investment, With no related allowance recorded	184	641	433
Average Recorded Investment, With an allowance recorded	71	103	540
Interest Income Recognized, With no related allowance recorded	4	15	23
Interest Income Recognized, With related allowance recorded	4	4	4
Residential real estate, 1-4 family residential | Residential real estate
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	2,923	2,650	2,575
Unpaid Principal Balance, With an allowance recorded	1,409	661	769
Recorded Investment, With no related allowance recorded	2,697	2,403	2,310
Recorded Investment, With an allowance recorded	1,387	642	749
Allowance for Loan Losses Allocated	84	51	61
Average Recorded Investment, With no related allowance recorded	2,343	2,302	2,174
Average Recorded Investment, With an allowance recorded	837	828	919
Interest Income Recognized, With no related allowance recorded	138	145	147
Interest Income Recognized, With related allowance recorded	29	36	39
Commercial, Agricultural | Commercial
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	0
Unpaid Principal Balance, With an allowance recorded	0	219
Recorded Investment, With no related allowance recorded	0
Recorded Investment, With an allowance recorded	0	218
Allowance for Loan Losses Allocated	0	107
Average Recorded Investment, With no related allowance recorded	10
Average Recorded Investment, With an allowance recorded	50	73
Interest Income Recognized, With no related allowance recorded	0
Interest Income Recognized, With related allowance recorded	0	0
Residential real estate, Home equity lines of credit | Residential real estate
Financing Receivable Impaired [Line Items]
Unpaid Principal Balance, With no related allowance recorded	341	195	283
Unpaid Principal Balance, With an allowance recorded	159	84	87
Recorded Investment, With no related allowance recorded	319	179	268
Recorded Investment, With an allowance recorded	156	84	87
Allowance for Loan Losses Allocated	74	1	2
Average Recorded Investment, With no related allowance recorded	299	221	260
Average Recorded Investment, With an allowance recorded	95	85	96
Interest Income Recognized, With no related allowance recorded	15	10	15
Interest Income Recognized, With related allowance recorded	$ 3	$ 4	$ 4

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Loans (Details 6) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	$ 6,663	$ 6,489
Loans Past Due 90 Days or More Still Accruing	1,032	1,681
Originated Loans
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	4,572	4,209
Loans Past Due 90 Days or More Still Accruing	929	932
Originated Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	501	958
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	0	343
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	45	58
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Commercial, Commercial and industrial | Commercial
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	249	400
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	2,653	1,929
Loans Past Due 90 Days or More Still Accruing	393	295
Originated Loans | Commercial, Agricultural | Commercial
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	2	12
Loans Past Due 90 Days or More Still Accruing	0	0
Originated Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	602	202
Loans Past Due 90 Days or More Still Accruing	8	118
Originated Loans | Consumer, Indirect | Consumer
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	457	298
Loans Past Due 90 Days or More Still Accruing	361	438
Originated Loans | Consumer, Direct | Consumer
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	63	9
Loans Past Due 90 Days or More Still Accruing	153	65
Originated Loans | Consumer, Other | Consumer
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	14	16
Acquired Loans
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	2,091	2,280
Loans Past Due 90 Days or More Still Accruing	103	749
Acquired Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	0	85
Loans Past Due 90 Days or More Still Accruing	0	0
Acquired Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	216	0
Loans Past Due 90 Days or More Still Accruing	0	0
Acquired Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	0	380
Loans Past Due 90 Days or More Still Accruing	0	0
Acquired Loans | Commercial, Commercial and industrial | Commercial
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	943	961
Loans Past Due 90 Days or More Still Accruing	19	0
Acquired Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	613	386
Loans Past Due 90 Days or More Still Accruing	69	545
Acquired Loans | Commercial, Agricultural | Commercial
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	9	236
Loans Past Due 90 Days or More Still Accruing	0	0
Acquired Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	170	119
Loans Past Due 90 Days or More Still Accruing	0	109
Acquired Loans | Consumer, Direct | Consumer
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	140	89
Loans Past Due 90 Days or More Still Accruing	15	95
Acquired Loans | Commercial real estate, Other | Commercial real estate
Schedule of investment in nonaccrual and loans past due over 90 days still on accrual by class of loans
Nonaccrual	0	24
Loans Past Due 90 Days or More Still Accruing	$ 0	$ 0

XML

Loans (Details 7) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of investment in past due loans
Total Past Due	$ 17,886	$ 20,916
Loans Not Past Due	1,559,495	1,406,719
Loans	1,577,381	1,427,635
Commercial real estate
Schedule of investment in past due loans
Loans	630,700	534,285
Commercial
Schedule of investment in past due loans
Loans	264,861	245,055
Residential real estate
Schedule of investment in past due loans
Loans	468,884	430,195
Consumer
Schedule of investment in past due loans
Loans	212,936	218,100
Financing Receivables, 30 to 59 Days Past Due
Schedule of investment in past due loans
Total Past Due	8,012	10,485
Financing Receivables, 60 to 89 Days Past Due
Schedule of investment in past due loans
Total Past Due	2,179	2,261
Financing Receivables, Equal to Greater than 90 Days Past Due
Schedule of investment in past due loans
Total Past Due	7,695	8,170
Residential real estate, 1-4 family residential | Residential real estate
Schedule of investment in past due loans
Loans	368,592	335,718
Residential real estate, Home equity lines of credit | Residential real estate
Schedule of investment in past due loans
Loans	100,292	94,477
Consumer, Indirect | Consumer
Schedule of investment in past due loans
Loans	160,848	161,713
Consumer, Direct | Consumer
Schedule of investment in past due loans
Loans	43,084	48,528
Consumer, Other | Consumer
Schedule of investment in past due loans
Loans	9,004	7,859
Originated Loans
Schedule of investment in past due loans
Total Past Due	13,100	13,715
Loans Not Past Due	1,251,918	1,040,781
Loans	1,265,018	1,054,496
Originated Loans | Financing Receivables, 30 to 59 Days Past Due
Schedule of investment in past due loans
Total Past Due	5,745	7,215
Originated Loans | Financing Receivables, 60 to 89 Days Past Due
Schedule of investment in past due loans
Total Past Due	1,854	1,359
Originated Loans | Financing Receivables, Equal to Greater than 90 Days Past Due
Schedule of investment in past due loans
Total Past Due	5,501	5,141
Originated Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of investment in past due loans
Total Past Due	845	958
Loans Not Past Due	139,081	108,475
Loans	139,926	109,433
Originated Loans | Commercial real estate, Owner occupied | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	4	0
Originated Loans | Commercial real estate, Owner occupied | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	340	0
Originated Loans | Commercial real estate, Owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	501	958
Originated Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	343
Loans Not Past Due	198,588	165,105
Loans	198,588	165,448
Originated Loans | Commercial real estate, Non-owner occupied | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Non-owner occupied | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Non-owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	343
Originated Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of investment in past due loans
Total Past Due	45	58
Loans Not Past Due	70,398	34,057
Loans	70,443	34,115
Originated Loans | Commercial real estate, Farmland | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Farmland | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Farmland | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	45	58
Originated Loans | Commercial real estate, Other | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Loans Not Past Due	88,703	70,542
Loans	88,703	70,542
Originated Loans | Commercial real estate, Other | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Other | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial real estate, Other | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Originated Loans | Commercial, Commercial and industrial | Commercial
Schedule of investment in past due loans
Total Past Due	544	490
Loans Not Past Due	192,335	170,242
Loans	192,879	170,732
Originated Loans | Commercial, Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	292	90
Originated Loans | Commercial, Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	3	0
Originated Loans | Commercial, Commercial and industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	249	400
Originated Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of investment in past due loans
Total Past Due	5,493	5,948
Loans Not Past Due	266,338	217,752
Loans	271,831	223,700
Originated Loans | Residential real estate, 1-4 family residential | Financing Receivables, 30 to 59 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	2,044	3,368
Originated Loans | Residential real estate, 1-4 family residential | Financing Receivables, 60 to 89 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	403	356
Originated Loans | Residential real estate, 1-4 family residential | Financing Receivables, Equal to Greater than 90 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	3,046	2,224
Originated Loans | Commercial, Agricultural | Commercial
Schedule of investment in past due loans
Total Past Due	76	41
Loans Not Past Due	32,605	24,632
Loans	32,681	24,673
Originated Loans | Commercial, Agricultural | Financing Receivables, 30 to 59 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	74	0
Originated Loans | Commercial, Agricultural | Financing Receivables, 60 to 89 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	0	29
Originated Loans | Commercial, Agricultural | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	2	12
Originated Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of investment in past due loans
Total Past Due	783	434
Loans Not Past Due	70,754	59,248
Loans	71,537	59,682
Originated Loans | Residential real estate, Home equity lines of credit | Financing Receivables, 30 to 59 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	155	77
Originated Loans | Residential real estate, Home equity lines of credit | Financing Receivables, 60 to 89 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	18	37
Originated Loans | Residential real estate, Home equity lines of credit | Financing Receivables, Equal to Greater than 90 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	610	320
Originated Loans | Consumer, Indirect | Consumer
Schedule of investment in past due loans
Total Past Due	4,076	4,276
Loans Not Past Due	156,772	157,437
Loans	160,848	161,713
Originated Loans | Consumer, Indirect | Financing Receivables, 30 to 59 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	2,429	2,844
Originated Loans | Consumer, Indirect | Financing Receivables, 60 to 89 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	829	696
Originated Loans | Consumer, Indirect | Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	818	736
Originated Loans | Consumer, Direct | Consumer
Schedule of investment in past due loans
Total Past Due	1,098	1,031
Loans Not Past Due	27,608	25,815
Loans	28,706	26,846
Originated Loans | Consumer, Direct | Financing Receivables, 30 to 59 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	632	744
Originated Loans | Consumer, Direct | Financing Receivables, 60 to 89 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	250	213
Originated Loans | Consumer, Direct | Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	216	74
Originated Loans | Consumer, Other | Consumer
Schedule of investment in past due loans
Total Past Due	140	136
Loans Not Past Due	8,736	7,476
Loans	8,876	7,612
Originated Loans | Consumer, Other | Financing Receivables, 30 to 59 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	115	92
Originated Loans | Consumer, Other | Financing Receivables, 60 to 89 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	11	28
Originated Loans | Consumer, Other | Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	14	16
Acquired Loans
Schedule of investment in past due loans
Total Past Due	4,786	7,201
Loans Not Past Due	307,577	365,938
Loans	312,363	373,139
Acquired Loans | Financing Receivables, 30 to 59 Days Past Due
Schedule of investment in past due loans
Total Past Due	2,267	3,270
Acquired Loans | Financing Receivables, 60 to 89 Days Past Due
Schedule of investment in past due loans
Total Past Due	325	902
Acquired Loans | Financing Receivables, Equal to Greater than 90 Days Past Due
Schedule of investment in past due loans
Total Past Due	2,194	3,029
Acquired Loans | Commercial real estate, Owner occupied | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	298
Loans Not Past Due	53,051	60,630
Loans	53,051	60,928
Acquired Loans | Commercial real estate, Owner occupied | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	8
Acquired Loans | Commercial real estate, Owner occupied | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	205
Acquired Loans | Commercial real estate, Owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	85
Acquired Loans | Commercial real estate, Non-owner occupied | Commercial real estate
Schedule of investment in past due loans
Total Past Due	216	134
Loans Not Past Due	20,042	24,815
Loans	20,258	24,949
Acquired Loans | Commercial real estate, Non-owner occupied | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	134
Acquired Loans | Commercial real estate, Non-owner occupied | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Acquired Loans | Commercial real estate, Non-owner occupied | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	216	0
Acquired Loans | Commercial real estate, Farmland | Commercial real estate
Schedule of investment in past due loans
Total Past Due	454	463
Loans Not Past Due	47,301	53,741
Loans	47,755	54,204
Acquired Loans | Commercial real estate, Farmland | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	454	83
Acquired Loans | Commercial real estate, Farmland | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Acquired Loans | Commercial real estate, Farmland | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	380
Acquired Loans | Commercial real estate, Other | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	24
Loans Not Past Due	11,976	14,642
Loans	11,976	14,666
Acquired Loans | Commercial real estate, Other | Financing Receivables, 30 to 59 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Acquired Loans | Commercial real estate, Other | Financing Receivables, 60 to 89 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	0
Acquired Loans | Commercial real estate, Other | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial real estate
Schedule of investment in past due loans
Total Past Due	0	24
Acquired Loans | Commercial, Commercial and industrial | Commercial
Schedule of investment in past due loans
Total Past Due	1,385	1,239
Loans Not Past Due	25,709	32,387
Loans	27,094	33,626
Acquired Loans | Commercial, Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	327	278
Acquired Loans | Commercial, Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	96	0
Acquired Loans | Commercial, Commercial and industrial | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	962	961
Acquired Loans | Residential real estate, 1-4 family residential | Residential real estate
Schedule of investment in past due loans
Total Past Due	1,617	2,991
Loans Not Past Due	95,144	109,027
Loans	96,761	112,018
Acquired Loans | Residential real estate, 1-4 family residential | Financing Receivables, 30 to 59 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	858	1,556
Acquired Loans | Residential real estate, 1-4 family residential | Financing Receivables, 60 to 89 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	77	504
Acquired Loans | Residential real estate, 1-4 family residential | Financing Receivables, Equal to Greater than 90 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	682	931
Acquired Loans | Commercial, Agricultural | Commercial
Schedule of investment in past due loans
Total Past Due	96	257
Loans Not Past Due	12,111	15,767
Loans	12,207	16,024
Acquired Loans | Commercial, Agricultural | Financing Receivables, 30 to 59 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	87	21
Acquired Loans | Commercial, Agricultural | Financing Receivables, 60 to 89 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	0	0
Acquired Loans | Commercial, Agricultural | Financing Receivables, Equal to Greater than 90 Days Past Due | Commercial
Schedule of investment in past due loans
Total Past Due	9	236
Acquired Loans | Residential real estate, Home equity lines of credit | Residential real estate
Schedule of investment in past due loans
Total Past Due	331	389
Loans Not Past Due	28,424	34,406
Loans	28,755	34,795
Acquired Loans | Residential real estate, Home equity lines of credit | Financing Receivables, 30 to 59 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	161	152
Acquired Loans | Residential real estate, Home equity lines of credit | Financing Receivables, 60 to 89 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	0	9
Acquired Loans | Residential real estate, Home equity lines of credit | Financing Receivables, Equal to Greater than 90 Days Past Due | Residential real estate
Schedule of investment in past due loans
Total Past Due	170	228
Acquired Loans | Consumer, Indirect | Consumer
Schedule of investment in past due loans
Loans	0	0
Acquired Loans | Consumer, Direct | Consumer
Schedule of investment in past due loans
Total Past Due	686	1,306
Loans Not Past Due	13,692	20,376
Loans	14,378	21,682
Acquired Loans | Consumer, Direct | Financing Receivables, 30 to 59 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	380	938
Acquired Loans | Consumer, Direct | Financing Receivables, 60 to 89 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	151	184
Acquired Loans | Consumer, Direct | Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	155	184
Acquired Loans | Consumer, Other | Consumer
Schedule of investment in past due loans
Total Past Due	1	100
Loans Not Past Due	127	147
Loans	128	247
Acquired Loans | Consumer, Other | Financing Receivables, 30 to 59 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	0	100
Acquired Loans | Consumer, Other | Financing Receivables, 60 to 89 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	1	0
Acquired Loans | Consumer, Other | Financing Receivables, Equal to Greater than 90 Days Past Due | Consumer
Schedule of investment in past due loans
Total Past Due	$ 0	$ 0

XML

Loans (Details Textual)	12 Months Ended
	Dec. 31, 2017 USD ($) Loans	Dec. 31, 2016 USD ($) Loans	Dec. 31, 2015 USD ($) Loans
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings	$ 5,000,000	$ 7,000,000
Specific reserves to customers	162,000	249,000
Commitments to lend additional amounts to borrowers classified as troubled debt restructurings	0	0
Allowance adjustment charge offs	75,000	344,000	$ 129,000
Increase in the allowance for loan losses as a result of the allowance	$ 75,000	43,000	101,000
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans	0
Loans default payment past due period	30 days
Maximum commercial loan and commercial real estate relationships	$ 750,000
Commercial real estate loan
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings		$ 1,200,000	$ 40,000
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans		2	1
Residential real estate loan
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings		$ 1,000	$ 1,000
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans		1	1
Residential real estate, Home equity lines of credit
Financing Receivable Modifications [Line Items]
Total troubled debt restructurings		$ 10,000	$ 11,000
Troubled debt restructured loans with subsequent payment defaults | Loans | Loans		1	1
Troubled debt restructurings
Financing Receivable Modifications [Line Items]
Specific reserves to customers	$ 68,000	$ 101,000
Contractual Interest Rate Reduction | Minimum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	0.49%
Contractual Interest Rate Reduction | Maximum
Financing Receivable Modifications [Line Items]
Reduction of the notes stated interest rate	11.51%
Extended Maturity | Minimum
Financing Receivable Modifications [Line Items]
Maturity period loans	6 months
Extended Maturity | Maximum
Financing Receivable Modifications [Line Items]
Maturity period loans	132 months

XML

Loans (Details 8) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) Loan	Dec. 31, 2016 USD ($) Loan	Dec. 31, 2015 USD ($) Loan
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	61	51
Pre-Modification Outstanding Recorded Investment	$ 1,515	$ 881
Post-Modification Outstanding Recorded Investment	$ 1,522	$ 882
Originated Loans
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	54	44	31
Pre-Modification Outstanding Recorded Investment	$ 1,305	$ 670	$ 1,741
Post-Modification Outstanding Recorded Investment	$ 1,312	$ 671	$ 1,741
Originated Loans | Residential real estate, 1-4 family residential
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	15	15	13
Pre-Modification Outstanding Recorded Investment	$ 910	$ 436	$ 760
Post-Modification Outstanding Recorded Investment	$ 917	$ 437	$ 760
Originated Loans | Residential real estate, Home equity lines of credit
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	10	1	2
Pre-Modification Outstanding Recorded Investment	$ 234	$ 40	$ 60
Post-Modification Outstanding Recorded Investment	$ 234	$ 40	$ 60
Originated Loans | Consumer, Indirect
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	29	26	12
Pre-Modification Outstanding Recorded Investment	$ 161	$ 182	$ 104
Post-Modification Outstanding Recorded Investment	$ 161	$ 182	$ 104
Originated Loans | Commercial real estate, Owner occupied
Financing Receivable Modifications [Line Items]
Number of Loans | Loan			2
Pre-Modification Outstanding Recorded Investment			$ 801
Post-Modification Outstanding Recorded Investment			$ 801
Originated Loans | Consumer
Financing Receivable Modifications [Line Items]
Number of Loans | Loan		2	1
Pre-Modification Outstanding Recorded Investment		$ 12	$ 8
Post-Modification Outstanding Recorded Investment		$ 12	$ 8
Originated Loans | Commercial | Commercial and industrial
Financing Receivable Modifications [Line Items]
Number of Loans | Loan			1
Pre-Modification Outstanding Recorded Investment			$ 8
Post-Modification Outstanding Recorded Investment			$ 8
Acquired Loans
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	7	7	33
Pre-Modification Outstanding Recorded Investment	$ 210	$ 211	$ 2,698
Post-Modification Outstanding Recorded Investment	$ 210	$ 211	$ 2,698
Acquired Loans | Residential real estate, 1-4 family residential
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	3	4
Pre-Modification Outstanding Recorded Investment	$ 85	$ 153
Post-Modification Outstanding Recorded Investment	$ 85	$ 153
Acquired Loans | Residential real estate, Home equity lines of credit
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	1	1
Pre-Modification Outstanding Recorded Investment	$ 57	$ 18
Post-Modification Outstanding Recorded Investment	$ 57	$ 18
Acquired Loans | Consumer
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	2	2
Pre-Modification Outstanding Recorded Investment	$ 55	$ 40
Post-Modification Outstanding Recorded Investment	$ 55	$ 40
Acquired Loans | Commercial | Commercial and industrial
Financing Receivable Modifications [Line Items]
Number of Loans | Loan	1		2
Pre-Modification Outstanding Recorded Investment	$ 13		$ 957
Post-Modification Outstanding Recorded Investment	$ 13		$ 957

XML

Loans (Details 9) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 895,561	$ 779,340
Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	873,901	759,104
Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	11,415	7,672
Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	10,245	12,564
Originated Loans
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	723,220	574,943
Originated Loans | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	711,466	564,374
Originated Loans | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	6,459	4,310
Originated Loans | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	5,295	6,259
Originated Loans | Commercial real estate | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	139,926	109,433
Originated Loans | Commercial real estate | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	198,588	165,448
Originated Loans | Commercial real estate | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	70,443	34,115
Originated Loans | Commercial real estate | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	88,703	70,542
Originated Loans | Commercial real estate | Pass | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	137,913	106,448
Originated Loans | Commercial real estate | Pass | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	198,043	162,465
Originated Loans | Commercial real estate | Pass | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	70,354	34,057
Originated Loans | Commercial real estate | Pass | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	88,421	69,947
Originated Loans | Commercial real estate | Special Mention | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	442	490
Originated Loans | Commercial real estate | Special Mention | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	419	522
Originated Loans | Commercial real estate | Special Mention | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	44	0
Originated Loans | Commercial real estate | Special Mention | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	36	325
Originated Loans | Commercial real estate | Substandard | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,571	2,495
Originated Loans | Commercial real estate | Substandard | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	126	2,461
Originated Loans | Commercial real estate | Substandard | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	45	58
Originated Loans | Commercial real estate | Substandard | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	246	270
Originated Loans | Commercial | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	192,879	170,732
Originated Loans | Commercial | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	32,681	24,673
Originated Loans | Commercial | Pass | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	184,444	167,062
Originated Loans | Commercial | Pass | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	32,291	24,395
Originated Loans | Commercial | Special Mention | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	5,326	2,720
Originated Loans | Commercial | Special Mention | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	192	253
Originated Loans | Commercial | Substandard | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	3,109	950
Originated Loans | Commercial | Substandard | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	198	25
Acquired Loans
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	172,341	204,397
Acquired Loans | Pass
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	162,435	194,730
Acquired Loans | Special Mention
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	4,956	3,362
Acquired Loans | Substandard
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	4,950	6,305
Acquired Loans | Commercial real estate | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	53,051	60,928
Acquired Loans | Commercial real estate | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	20,258	24,949
Acquired Loans | Commercial real estate | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	47,755	54,204
Acquired Loans | Commercial real estate | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	11,976	14,666
Acquired Loans | Commercial real estate | Pass | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	51,133	58,655
Acquired Loans | Commercial real estate | Pass | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	19,823	23,577
Acquired Loans | Commercial real estate | Pass | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	43,694	53,039
Acquired Loans | Commercial real estate | Pass | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	11,299	14,060
Acquired Loans | Commercial real estate | Special Mention | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	466	707
Acquired Loans | Commercial real estate | Special Mention | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	63	1,195
Acquired Loans | Commercial real estate | Special Mention | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	3,304	0
Acquired Loans | Commercial real estate | Special Mention | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	567	464
Acquired Loans | Commercial real estate | Substandard | Commercial real estate, Owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,452	1,566
Acquired Loans | Commercial real estate | Substandard | Commercial real estate, Non-owner occupied
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	372	177
Acquired Loans | Commercial real estate | Substandard | Commercial farmland
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	757	1,165
Acquired Loans | Commercial real estate | Substandard | Commercial real estate, Other
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	110	142
Acquired Loans | Commercial | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	27,094	33,626
Acquired Loans | Commercial | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	12,207	16,024
Acquired Loans | Commercial | Pass | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	25,286	30,543
Acquired Loans | Commercial | Pass | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	11,200	14,856
Acquired Loans | Commercial | Special Mention | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	2	311
Acquired Loans | Commercial | Special Mention | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	554	685
Acquired Loans | Commercial | Substandard | Commercial and industrial
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	1,806	2,772
Acquired Loans | Commercial | Substandard | Commercial, Agricultural
Financing Receivable Recorded Investment [Line Items]
Total risk category of loans by class of loans	$ 453	$ 483

XML

Loans (Details 10) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Financing Receivable Recorded Investment [Line Items]
Loans	$ 1,577,381	$ 1,427,635
Residential real estate
Financing Receivable Recorded Investment [Line Items]
Loans	468,884	430,195
Residential real estate | Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Loans	368,592	335,718
Residential real estate | Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Loans	100,292	94,477
Consumer
Financing Receivable Recorded Investment [Line Items]
Loans	212,936	218,100
Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Loans	160,848	161,713
Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Loans	43,084	48,528
Consumer | Consumer, Other
Financing Receivable Recorded Investment [Line Items]
Loans	9,004	7,859
Originated Loans
Financing Receivable Recorded Investment [Line Items]
Loans	1,265,018	1,054,496
Originated Loans | Residential real estate | Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Loans	271,831	223,700
Originated Loans | Residential real estate | Residential real estate, 1-4 family residential | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	268,785	221,476
Originated Loans | Residential real estate | Residential real estate, 1-4 family residential | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	3,046	2,224
Originated Loans | Residential real estate | Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Loans	71,537	59,682
Originated Loans | Residential real estate | Residential real estate, Home equity lines of credit | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	70,927	59,362
Originated Loans | Residential real estate | Residential real estate, Home equity lines of credit | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	610	320
Originated Loans | Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Loans	160,848	161,713
Originated Loans | Consumer | Consumer, Indirect | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	160,030	160,977
Originated Loans | Consumer | Consumer, Indirect | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	818	736
Originated Loans | Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Loans	28,706	26,846
Originated Loans | Consumer | Consumer, Direct | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	28,490	26,772
Originated Loans | Consumer | Consumer, Direct | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	216	74
Originated Loans | Consumer | Consumer, Other
Financing Receivable Recorded Investment [Line Items]
Loans	8,876	7,612
Originated Loans | Consumer | Consumer, Other | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	8,862	7,596
Originated Loans | Consumer | Consumer, Other | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	14	16
Acquired Loans
Financing Receivable Recorded Investment [Line Items]
Loans	312,363	373,139
Acquired Loans | Residential real estate | Residential real estate, 1-4 family residential
Financing Receivable Recorded Investment [Line Items]
Loans	96,761	112,018
Acquired Loans | Residential real estate | Residential real estate, 1-4 family residential | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	96,079	111,087
Acquired Loans | Residential real estate | Residential real estate, 1-4 family residential | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	682	931
Acquired Loans | Residential real estate | Residential real estate, Home equity lines of credit
Financing Receivable Recorded Investment [Line Items]
Loans	28,755	34,795
Acquired Loans | Residential real estate | Residential real estate, Home equity lines of credit | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	28,585	34,567
Acquired Loans | Residential real estate | Residential real estate, Home equity lines of credit | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	170	228
Acquired Loans | Consumer | Consumer, Indirect
Financing Receivable Recorded Investment [Line Items]
Loans	0	0
Acquired Loans | Consumer | Consumer, Indirect | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	0	0
Acquired Loans | Consumer | Consumer, Indirect | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	0	0
Acquired Loans | Consumer | Consumer, Direct
Financing Receivable Recorded Investment [Line Items]
Loans	14,378	21,682
Acquired Loans | Consumer | Consumer, Direct | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	14,223	21,498
Acquired Loans | Consumer | Consumer, Direct | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	155	184
Acquired Loans | Consumer | Consumer, Other
Financing Receivable Recorded Investment [Line Items]
Loans	128	247
Acquired Loans | Consumer | Consumer, Other | Performing Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	128	247
Acquired Loans | Consumer | Consumer, Other | Nonperforming Financing Receivable
Financing Receivable Recorded Investment [Line Items]
Loans	$ 0	$ 0

XML

Loan Servicing - Summary of Principal Balance for Mortgage Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
FHLMC
Mortgage loan portfolio serviced for:
Loan Portfolio Expense	$ 179,253	$ 121,274

XML

Loan Servicing - Additional Information (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Transfers And Servicing [Abstract]
Escrow balances maintained in connection with serviced loans	$ 1,400,000	$ 961,000
Mortgage servicing rights, valuation allowance	$ 0	$ 0	$ 0

XML

Loan Servicing - Summary of Activity for Mortgage Servicing Rights of Acquisition (Details ) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Servicing rights:
Beginning balance	$ 854	$ 453	$ 347
Additions	701	611	166
Amortization to expense	(313)	(210)	(60)
Ending balance	$ 1,242	$ 854	$ 453

XML

Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Financial Assets
Securities available for sale	$ 393,331	$ 369,995
Loan yield maintenance provisions	653	685	$ 789
Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	393,331	369,995
Loan yield maintenance provisions	653	685
Corporate bonds
Financial Assets
Securities available for sale	1,234	1,339
Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	1,234	1,339
Collateralized mortgage obligations
Financial Assets
Securities available for sale	17,121	20,693
Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	17,121	20,693
Small Business Administration
Financial Assets
Securities available for sale	14,212	16,706
Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	14,212	16,706
U.S. Treasury and U.S. government sponsored entities
Financial Assets
Securities available for sale	8,917	5,921
U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	8,917	5,921
State and political subdivisions
Financial Assets
Securities available for sale	191,003	155,303
State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	191,003	155,303
Mortgage-backed securities - residential
Financial Assets
Securities available for sale	160,450	169,682
Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	160,450	169,682
Equity securities
Financial Assets
Securities available for sale	394	351
Equity securities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	394	351
Interest rate swaps | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	653	685
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	394	351
Loan yield maintenance provisions	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
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
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	394	351
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	392,929	369,632
Loan yield maintenance provisions	653	685
Significant Other Observable Inputs (Level 2) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	1,234	1,339
Significant Other Observable Inputs (Level 2) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	17,121	20,693
Significant Other Observable Inputs (Level 2) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	14,212	16,706
Significant Other Observable Inputs (Level 2) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	8,917	5,921
Significant Other Observable Inputs (Level 2) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	191,003	155,303
Significant Other Observable Inputs (Level 2) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	160,442	169,670
Significant Other Observable Inputs (Level 2) | Equity securities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Other Observable Inputs (Level 2) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	653	685
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	8	12
Loan yield maintenance provisions	0	0
Significant Unobservable Inputs (Level 3) | Corporate bonds | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Collateralized mortgage obligations | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Small Business Administration | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | U.S. Treasury and U.S. government sponsored entities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | State and political subdivisions | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Mortgage-backed securities - residential | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	8	12
Significant Unobservable Inputs (Level 3) | Equity securities | Fair Value, Measurements, Recurring
Financial Assets
Securities available for sale	0	0
Significant Unobservable Inputs (Level 3) | Interest rate swaps | Fair Value, Measurements, Recurring
Financial Liabilities
Derivative liabilities	$ 0	$ 0

XML

Fair Value (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) Property	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value assets liabilities transfers amount between level 1 and level 2	$ 0	$ 0
Impaired loans, unpaid principal balance with allowance recorded	1,636	2,710	$ 4,014
Impaired loans, allowance	162	249	497
Provision for loan losses	3,350	3,870	$ 3,510
Troubled debt restructurings	$ 5,000	7,000
Number of properties charged down reflecting updated appraisals | Property	1
Other real estate owned measured at fair value less costs to sell	$ 0
Write down of other real estate owned	$ 23	36
Maximum maturity period of short term borrowings	90 days
Measured Using Present Value of Cash Flows
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Troubled debt restructurings	$ 763	2,000
Collateral Dependent Impaired Loans
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impaired loans, unpaid principal balance with allowance recorded	851	727
Impaired loans, allowance	109	173
Provision for loan losses	$ 272	$ 139

XML

Fair Value (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs
Beginning Balance	$ 12	$ 15	$ 10
Total unrealized gains or losses:
Included in other comprehensive income	0	0	0
Repayments, calls and maturities	(4)	(3)	(1)
Acquired and/or purchased	0	0	6
Ending Balance	$ 8	$ 12	$ 15

XML

Fair Value (Details 2) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	$ 5,536	$ 7,338	$ 10,082
Commercial real estate, Owner occupied | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		23
Other real estate owned, 1–4 family residential | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		16
Commercial real estate, Farmland | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		339
Commercial, Agricultural | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		113
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate, Owner occupied | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other real estate owned, 1–4 family residential | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate, Farmland | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial, Agricultural | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Other Observable Inputs (Level 2) | Commercial real estate, Owner occupied | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Other Observable Inputs (Level 2) | Other real estate owned, 1–4 family residential | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Other Observable Inputs (Level 2) | Commercial real estate, Farmland | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Other Observable Inputs (Level 2) | Commercial, Agricultural | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		0
Significant Unobservable Inputs (Level 3) | Commercial real estate, Owner occupied | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		23
Significant Unobservable Inputs (Level 3) | Other real estate owned, 1–4 family residential | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		16
Significant Unobservable Inputs (Level 3) | Commercial real estate, Farmland | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		339
Significant Unobservable Inputs (Level 3) | Commercial, Agricultural | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment		113
Residential Real Estate | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	740	77
Residential Real Estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Residential Real Estate | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Residential Real Estate | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	740	77
Consumer | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	2	2
Consumer | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Consumer | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	0	0
Consumer | Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recorded Investment	$ 2	$ 2

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Fair Value (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value measurements for financial instruments
Recorded Investment	$ 5,536	$ 7,338	$ 10,082
Fair Value, Measurements, Nonrecurring | Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment	740	77
Fair Value, Measurements, Nonrecurring | Consumer
Fair value measurements for financial instruments
Recorded Investment	2	2
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Residential Real Estate
Fair value measurements for financial instruments
Recorded Investment	$ 740	$ 77
Fair Value Measurements Valuation Technique(s) Description	Sales comparison	Sales comparison
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Residential Real Estate | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(15.76%)	(12.97%)
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Residential Real Estate | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	27.92%	14.22%
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Residential Real Estate | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.53%	(3.38%)
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Consumer
Fair value measurements for financial instruments
Recorded Investment	$ 2	$ 2
Fair Value Measurements Valuation Technique(s) Description	Sales comparison	Sales comparison
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Consumer | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	(21.98%)	(20.00%)
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Consumer | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	21.98%	20.00%
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Consumer | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent	0.00%	0.00%
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Commercial real estate
Fair value measurements for financial instruments
Recorded Investment		$ 23
Fair Value Measurements Valuation Technique(s) Description		Sales comparison
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Commercial real estate | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(24.02%)
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Other Real Estate Owned Residential
Fair value measurements for financial instruments
Recorded Investment		$ 16
Fair Value Measurements Valuation Technique(s) Description		Sales comparison
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Other Real Estate Owned Residential | Minimum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(10.36%)
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Other Real Estate Owned Residential | Maximum
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		17.10%
Fair Value, Measurements, Nonrecurring | Sales Comparison Valuation | Other Real Estate Owned Residential | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		(1.90%)
Fair Value, Measurements, Nonrecurring | Quoted price for loan relationship | Commercial real estate
Fair value measurements for financial instruments
Recorded Investment		$ 339
Fair Value Measurements Valuation Technique(s) Description		Quoted price for loan relationship
Fair Value, Measurements, Nonrecurring | Quoted price for loan relationship | Commercial real estate | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		35.77%
Fair Value, Measurements, Nonrecurring | Quoted price for loan relationship | Commercial
Fair value measurements for financial instruments
Recorded Investment		$ 113
Fair Value Measurements Valuation Technique(s) Description		Quoted price for loan relationship
Fair Value, Measurements, Nonrecurring | Quoted price for loan relationship | Commercial | Weighted Average
Fair value measurements for financial instruments
Adjustment for differences between earning multiplier and comparable sales, Percent		34.98%

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Fair Value (Details 4) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Financial assets
Cash and cash equivalents, Carrying Amount	$ 57,614	$ 41,778	$ 56,014	$ 27,428
Restricted stock, Carrying Amount	10,491	9,583
Loans held for sale, Carrying Amount	272	355
Loans, net, Carrying Amount	1,565,066	1,416,783
Accrued interest receivable, Carrying Amount	6,669	5,504
Financial liabilities
Deposits, Carrying Amount	1,604,719	1,524,756
Short-term borrowings, Carrying Amount	289,565	198,460
Long-term borrowings	6,994	15,036
Accrued interest payable, Carrying Amount	633	507
Fair Value, Measurements, Recurring
Financial assets
Cash and cash equivalents, Fair Value	57,614	41,778
Loans held for sale, Fair Value	283	365
Loans, net, Fair Value	1,569,381	1,406,951
Accrued interest receivable, Fair Value	6,669	5,504
Financial liabilities
Deposits, Fair Value	1,600,160	1,521,447
Short-term borrowings, Fair Value	289,565	198,460
Long-term borrowings, Fair Value	6,690	15,009
Accrued interest payable, Fair value	633	507
Fair Value, Measurements, Recurring | Level 1
Financial assets
Cash and cash equivalents, Fair Value	17,785	19,678
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	1,340,814	1,289,037
Short-term borrowings, Fair Value	0	0
Long-term borrowings, Fair Value	0	0
Accrued interest payable, Fair value	46	35
Fair Value, Measurements, Recurring | Level 2
Financial assets
Cash and cash equivalents, Fair Value	39,829	22,100
Loans held for sale, Fair Value	283	365
Loans, net, Fair Value	0	0
Accrued interest receivable, Fair Value	2,255	1,924
Financial liabilities
Deposits, Fair Value	259,346	232,410
Short-term borrowings, Fair Value	289,565	198,460
Long-term borrowings, Fair Value	6,690	15,009
Accrued interest payable, Fair value	587	472
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	1,569,381	1,406,951
Accrued interest receivable, Fair Value	4,414	3,580
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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Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Premises and equipment
Premises and equipment, gross	$ 43,688	$ 44,671
Less accumulated depreciation	(21,402)	(21,446)
NET BOOK VALUE	22,286	23,225
Land
Premises and equipment
Premises and equipment, gross	4,775	4,972
Buildings
Premises and equipment
Premises and equipment, gross	24,692	25,064
Furniture Fixtures and Equipment
Premises and equipment
Premises and equipment, gross	13,739	14,169
Leasehold Improvements
Premises and equipment
Premises and equipment, gross	$ 482	$ 466

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Premises and Equipment (Details Textual) $ in Thousands	1 Months Ended		12 Months Ended
	Aug. 31, 2017 Location	Jun. 30, 2016 Location	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Premises and Equipment (Textual) [Abstract]
Depreciation expense | $			$ 1,600	$ 1,700	$ 1,500
Rent expense | $			$ 449	$ 362	$ 332
Monitor acquisition
Premises and Equipment (Textual) [Abstract]
Number of new locations added by bank | Location	1
Bowers Insurance Agency, Inc.
Premises and Equipment (Textual) [Abstract]
Number of additional location served by bank | Location		1

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Premises and Equipment (Details 1) $ in Thousands	Dec. 31, 2017 USD ($)
Rent commitments
2018	$ 425
2019	419
2020	384
2021	380
2022	270
Thereafter	973
TOTAL	$ 2,851

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Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill And Intangible Assets [Line Items]
Goodwill associated with the Company's recent purchase and other past acquisitions	$ 38,201	$ 37,164
Other intangibles	7,168	7,990
Aggregate amortization expense	1,494	$ 1,461	$ 983
Core Deposits
Goodwill And Intangible Assets [Line Items]
Other intangibles	$ 6,300

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Other intangible assets
Gross Carrying Amount	$ 14,414	$ 13,742
Accumulated Amortization	(7,246)	(5,752)
Customer Relationships
Other intangible assets
Gross Carrying Amount	7,210	7,210
Accumulated Amortization	(4,919)	(4,253)
Non-compete contracts
Other intangible assets
Gross Carrying Amount	430	430
Accumulated Amortization	(376)	(357)
Trade Name
Other intangible assets
Gross Carrying Amount	520	520
Accumulated Amortization	(175)	(113)
Core Deposits
Other intangible assets
Gross Carrying Amount	6,254	5,582
Accumulated Amortization	$ (1,776)	$ (1,029)

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Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
2018	$ 1,418
2019	1,306
2020	1,203
2021	1,142
2022	1,025
Thereafter	1,074
TOTAL	$ 7,168	$ 7,990

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Interest Bearing Deposits (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Interest Bearing Deposits (Textual) [Abstract]
Minimum time deposits amount	$ 250,000
Time deposits of $100 thousand or more	$ 51,900,000	$ 43,300,000

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Interest Bearing Deposits (Details) - Certificates of Deposit $ in Thousands	Dec. 31, 2017 USD ($)
Summary of scheduled maturities of certificates of deposit
2018	$ 92,678
2019	46,243
2020	35,619
2021	55,086
2022	20,424
Thereafter	13,855
TOTAL	$ 263,905

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Interest Bearing Deposits (Details 1) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Summary of year-end interest bearing deposits
Demand	$ 440,347	$ 378,317
Money Market	253,181	317,079
Savings	234,940	226,770
Certificates of Deposit	263,905	235,720
TOTAL	$ 1,192,373	$ 1,157,886

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Short-term borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets Sold Under Agreements To Repurchase [Line Items]
Amount of Advances	$ 4,785	$ 12,876
Weighted Average
Assets Sold Under Agreements To Repurchase [Line Items]
Weighted Average Interest Rate	1.70%	2.69%
Pledged
Assets Sold Under Agreements To Repurchase [Line Items]
Amount of Advances	$ 215,000	$ 120,000
Pledged | Weighted Average
Assets Sold Under Agreements To Repurchase [Line Items]
Weighted Average Interest Rate	1.46%	0.63%
Pledged | Repurchase advance
Assets Sold Under Agreements To Repurchase [Line Items]
Amount of Advances	$ 125,000	$ 100,000
Pledged | Repurchase advance | Weighted Average
Assets Sold Under Agreements To Repurchase [Line Items]
Weighted Average Interest Rate	1.47%	0.63%
Pledged | Fixed rate advances
Assets Sold Under Agreements To Repurchase [Line Items]
Amount of Advances	$ 90,000	$ 0
Pledged | Fixed rate advances | Weighted Average
Assets Sold Under Agreements To Repurchase [Line Items]
Weighted Average Interest Rate	1.45%	0.00%
Pledged | Cash management advance
Assets Sold Under Agreements To Repurchase [Line Items]
Amount of Advances	$ 0	$ 20,000
Pledged | Cash management advance | Weighted Average
Assets Sold Under Agreements To Repurchase [Line Items]
Weighted Average Interest Rate	0.00%	0.59%

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Short-term borrowings (Parenthetical) (Details) - Pledged	Dec. 31, 2017	Dec. 31, 2016
Repurchase advance
Assets Sold Under Agreements To Repurchase [Line Items]
Federal Home Loan Bank interest rate	0.59%	1.48%
Fixed rate advances | Minimum
Assets Sold Under Agreements To Repurchase [Line Items]
Federal Home Loan Bank interest rate	1.43%
Fixed rate advances | Maximum
Assets Sold Under Agreements To Repurchase [Line Items]
Federal Home Loan Bank interest rate	1.49%
Cash management advance
Assets Sold Under Agreements To Repurchase [Line Items]
Federal Home Loan Bank interest rate	0.00%	0.59%

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Short-term borrowings (Details Textual)	12 Months Ended
	Dec. 31, 2017 USD ($) Bank	Dec. 31, 2016 USD ($)
Line Of Credit Facility [Line Items]
Maturity of repurchase agreements	89 days
Securities Sold under Agreements to Repurchase and Other Short Term Borrowings (Additional Textual) [Abstract]
Interest rate, effective percentage	4.50%	4.50%
Domestic Line of Credit
Line Of Credit Facility [Line Items]
Access to lines of credit at domestic banks	$ 20,000,000
Number of domestic banks | Bank	2
Unsecured revolving line of credit, outstanding balance	$ 0	$ 0
Revolving Credit Facility
Line Of Credit Facility [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Revolving Credit Facility | Farmers National Banc Corp | Unsecured Debt
Line Of Credit Facility [Line Items]
Unsecured revolving line of credit, outstanding balance	$ 6,500,000
Letter of Credit
Line Of Credit Facility [Line Items]
Unsecured revolving line of credit, outstanding balance	$ 350,000	350,000
Debt Instrument, Interest Rate, Stated Percentage	3.50%
US Treasury and Government Short-term Debt Securities
Line Of Credit Facility [Line Items]
Pledged securities, percentage of repurchase agreement balances	105.00%
Carrying amount of securities sold under repurchase agreement	$ 77,900,000	$ 82,000,000

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Short-term borrowings (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of securities sold under agreements to repurchase
Average balance during the year	$ 82,627	$ 84,368	$ 71,779
Average interest rate during the year	0.13%	0.07%	0.07%
Maximum month-end balance during the year	$ 94,208	$ 98,687	$ 89,574
Weighted average year-end interest rate	0.14%	0.08%	0.06%
Balance at year-end	$ 74,215	$ 78,110	$ 75,482

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Short-term borrowings (Details 2) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	$ 289,565	$ 198,460
Repurchase agreement
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	74,215	78,110
Repurchase agreement | U.S. Treasury and U.S. government sponsored entities
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	4,811	6,555
Repurchase agreement | State and political subdivisions
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	20,696	12,304
Repurchase agreement | Mortgage-backed securities - residential
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	43,936	52,628
Repurchase agreement | Collateralized mortgage obligations
Assets Sold Under Agreements To Repurchase [Line Items]
Total borrowings	$ 4,772	$ 6,623

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Long-Term Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Summary of long-term advances from the Federal Home Loan Bank
Amount of Advances	$ 4,785	$ 12,876
Weighted Average
Summary of long-term advances from the Federal Home Loan Bank
Weighted Average Interest Rate	1.70%	2.69%
Fixed-rate constant payment advances
Summary of long-term advances from the Federal Home Loan Bank
Amount of Advances	$ 4,785	$ 7,876
Fixed-rate constant payment advances | Weighted Average
Summary of long-term advances from the Federal Home Loan Bank
Weighted Average Interest Rate	1.70%	1.57%
Convertible and putable fixed-rate advance
Summary of long-term advances from the Federal Home Loan Bank
Amount of Advances	$ 0	$ 5,000
Convertible and putable fixed-rate advance | Weighted Average
Summary of long-term advances from the Federal Home Loan Bank
Weighted Average Interest Rate	0.00%	4.45%

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Long-Term Borrowings (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Long-term Debt [Abstract]
Residential mortgage loans	$ 280.2	$ 276.9
Additional borrowing limit	60.4
Long-term investments	$ 2.2	$ 2.2	$ 2.1
Interest rate	3.02%
Debt interest rate payment description	The debt has a floating rate that is determined quarterly based on the three-month LIBOR
Debenture maturity date	Dec. 15, 2036
Fixed-rate constant payment advances | Minimum
Long-term Debt [Abstract]
Federal Home Loan Bank interest rate	1.20%	1.20%
Fixed-rate constant payment advances | Maximum
Long-term Debt [Abstract]
Federal Home Loan Bank interest rate	1.70%	1.70%
Convertible and putable fixed-rate advance
Long-term Debt [Abstract]
Federal Home Loan Bank interest rate	4.45%	4.45%

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Long-Term Borrowings (Details 1) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Maturing in:
2018	$ 1,075
2019	931
2020	860
2021	792
2022	729
Thereafter	398
TOTAL	$ 4,785	$ 12,876

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Commitments and Contingent Liabilities (Details) - Commitments and Unused Lines of Credit - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fixed Rate
The contractual amounts of financial instruments with off-balance-sheet risk at year end
Total contractual amounts of financial instruments with off-balance-sheet risk	$ 74,119	$ 74,798
Variable Rate
The contractual amounts of financial instruments with off-balance-sheet risk at year end
Total contractual amounts of financial instruments with off-balance-sheet risk	$ 265,260	$ 247,080

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Commitments and Contingent Liabilities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingent Liabilities (Additional Textual) [Abstract]
Maximum commitment period to make loans	30 days
Standby letters of credit contractual value	$ 4,900,000	$ 4,300,000
Maximum subscription amount committed in SBIC investment funds	8,000,000
Investment in SBIC funds	$ 5,000,000
Fixed Rate
Commitments and Contingent Liabilities (Textual) [Abstract]
Fixed rate loan commitments maturity range		15 years
Commitments and Unused Lines of Credit | Minimum
Commitments and Contingent Liabilities (Textual) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	2.99%	0.10%
Commitments and Unused Lines of Credit | Maximum
Commitments and Contingent Liabilities (Textual) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage	16.00%	18.00%
Commitments to make loans | Minimum
Commitments and Contingent Liabilities (Textual) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage		4.25%
Debt Instrument, Variable Interest Rate Percentage		4.69%
Commitments to make loans | Maximum
Commitments and Contingent Liabilities (Textual) [Abstract]
Debt Instrument, Interest Rate, Stated Percentage		5.25%
Debt Instrument, Variable Interest Rate Percentage		5.75%

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Stock Based Compensation (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2012
2017 Incentive Plan | Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum shares available under equity incentive plan	800,000
Shares awarded under equity incentive plan	128,241
Stock based compensation expense	$ 2,400	$ 892	$ 486
Unrecognized compensation expense	$ 1,300
Compensation cost not yet recognized, period for recognition	2 years
2017 Incentive Plan | Time Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares awarded under equity incentive plan	63,248
2017 Incentive Plan | Performance Based Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares awarded under equity incentive plan	64,993
2012 Incentive Plan | Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum shares available under equity incentive plan				500,000
Shares awarded under equity incentive plan	0
Stock based compensation expense	$ 2,400	$ 892	$ 486
Unrecognized compensation expense	$ 1,300
Compensation cost not yet recognized, period for recognition	2 years

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Stock Based Compensation (Details) - Restricted Stock Awards	12 Months Ended
	Dec. 31, 2017 $ / shares shares
2017 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - nonvested shares, Maximum Awarded Unit | shares	0
Granted, Maximum Awarded Units | shares	128,241
Vested, Maximum Awarded Units | shares	0
Forfeited, Maximum Awarded Units | shares	(3,623)
Ending balance - nonvested shares, Maximum Awarded Unit | shares	124,618
Beginning balance - nonvested shares, Weighted Average Grant Date Fair Value | $ / shares	$ 0.00
Granted, Weighted Average Grant Date Fair Value | $ / shares	13.77
Vested, Weighted Average Grant Date Fair Value | $ / shares	0
Forfeited, Weighted Average Grant Date Fair Value | $ / shares	13.53
Ending balance - nonvested shares, Weighted Average Grant Date Fair Value | $ / shares	$ 13.77
2012 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Beginning balance - nonvested shares, Maximum Awarded Unit | shares	499,390
Granted, Maximum Awarded Units | shares	0
Vested, Maximum Awarded Units | shares	(21,928)
Forfeited, Maximum Awarded Units | shares	(12,234)
Ending balance - nonvested shares, Maximum Awarded Unit | shares	465,228
Beginning balance - nonvested shares, Weighted Average Grant Date Fair Value | $ / shares	$ 8.30
Granted, Weighted Average Grant Date Fair Value | $ / shares	0
Vested, Weighted Average Grant Date Fair Value | $ / shares	7.14
Forfeited, Weighted Average Grant Date Fair Value | $ / shares	8.28
Ending balance - nonvested shares, Weighted Average Grant Date Fair Value | $ / shares	$ 8.14

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Regulatory Matters (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Regulatory Matters (Additional Textual) [Abstract]
Common equity tier 1 capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Tier 1 capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Total capital to risk-weighted assets, capital conservation buffer ratio	2.50%
Capital conservation buffer ratio	1.25%	0.625%
Capital conservation buffer, additional capital amount required	$ 31,500,000	$ 19,300,000
Minimum ratio of common equity tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum ratio of tier 1 capital to risk-weighted assets	6.00%	6.00%
Minimum ratio of total capital to risk-weighted assets	8.00%	8.00%
Minimum leverage ratio	4.00%	4.00%
Farmers National Banc Corp
Regulatory Matters (Additional Textual) [Abstract]
Minimum ratio of common equity tier 1 capital to risk-weighted assets	4.50%	4.50%
Minimum ratio of tier 1 capital to risk-weighted assets	6.00%	6.00%
Minimum ratio of total capital to risk-weighted assets	8.00%	8.00%
Minimum leverage ratio	4.00%	4.00%
Dividends that can be declared without prior approval	$ 16,200,000
Farmers Trust Company
Regulatory Matters (Additional Textual) [Abstract]
Minimum capital maintained by trust	3,000,000
Dividends that can be declared without prior approval	$ 400,000

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Regulatory Matters (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Common equity tier 1 capital ratio
Actual, Amount	$ 199,201	$ 180,475
Actual, Ratio	11.86%	11.69%
Requirement for Capital Adequacy Purposes, Amount	$ 75,573	$ 69,474
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
Total risk based capital ratio
Actual, Amount	$ 213,725	$ 193,487
Actual, Ratio	12.73%	12.53%
Requirement for Capital Adequacy Purposes, Amount	$ 134,352	$ 123,509
Requirement for Capital Adequacy Purposes, Ratio	8.00%	8.00%
Tier 1 risk based capital ratio
Actual, Amount	$ 201,410	$ 182,635
Actual, Ratio	11.99%	11.83%
Requirement for Capital Adequacy Purposes, Amount	$ 100,764	$ 92,632
Requirement for Capital Adequacy Purposes, Ratio	6.00%	6.00%
Tier 1 leverage ratio
Actual, Amount	$ 201,410	$ 182,635
Actual, Ratio	9.50%	9.41%
Requirement for Capital Adequacy Purposes, Amount	$ 84,800	$ 77,596
Requirement for Capital Adequacy Purposes, Ratio	4.00%	4.00%
Farmers National Banc Corp
Common equity tier 1 capital ratio
Actual, Amount	$ 192,080	$ 171,064
Actual, Ratio	11.45%	11.12%
Requirement for Capital Adequacy Purposes, Amount	$ 75,462	$ 69,244
Requirement for Capital Adequacy Purposes, Ratio	4.50%	4.50%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 109,001	$ 100,020
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	6.50%	6.50%
Total risk based capital ratio
Actual, Amount	$ 204,395	$ 181,916
Actual, Ratio	12.19%	11.82%
Requirement for Capital Adequacy Purposes, Amount	$ 134,155	$ 123,101
Requirement for Capital Adequacy Purposes, Ratio	8.00%	8.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 167,694	$ 153,877
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	10.00%	10.00%
Tier 1 risk based capital ratio
Actual, Amount	$ 192,080	$ 171,064
Actual, Ratio	11.45%	11.12%
Requirement for Capital Adequacy Purposes, Amount	$ 100,616	$ 92,326
Requirement for Capital Adequacy Purposes, Ratio	6.00%	6.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 134,155	$ 123,101
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	8.00%	8.00%
Tier 1 leverage ratio
Actual, Amount	$ 192,080	$ 171,064
Actual, Ratio	9.12%	8.91%
Requirement for Capital Adequacy Purposes, Amount	$ 84,253	$ 76,792
Requirement for Capital Adequacy Purposes, Ratio	4.00%	4.00%
To be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 105,316	$ 95,990
To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	5.00%	5.00%

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Employee Benefit Plans (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
The accrued postretirement benefit liability due to termination of plan	$ 0	$ 70,000
Defined Benefit Postretirement Health Coverage
Defined Benefit Plan Disclosure [Line Items]
(Benefit) expense under the plan	(70,000)	(184,000)	$ (12,000)
National Bancshares Corporation
Defined Benefit Plan Disclosure [Line Items]
(Benefit) expense under the plan	91,000	130,000	0
Liability under the Plan	$ 1,000,000	1,000,000
Director age for eligibility for annual retirement benefit plan	70 years
Maximum years for benefit payment under the plan	15 years
Retirement Savings Plan
Defined Benefit Plan Disclosure [Line Items]
Employees who have completed no days of service	90 days
Percentage of the participants' voluntary contributions of gross wages	6.00%
(Benefit) expense under the plan	$ 556,000	506,000	431,000
Profit Sharing Plan
Defined Benefit Plan Disclosure [Line Items]
(Benefit) expense under the plan	$ 103,000	$ 103,000	$ 82,000
Annual compensation for associates, Percent	1.00%	1.00%	1.00%
Deferred Compensation Plan
Defined Benefit Plan Disclosure [Line Items]
(Benefit) expense under the plan	$ 8,000	$ 9,000	$ 10,000
Liability under the Plan	133,000	141,000
Deferred compensation plan asset recorded	566,000	345,000	67,000
Deferred compensation plan liability recorded	566,000	345,000	$ 67,000
ESOP | Tri-State 1st Banc Incorporation
Defined Benefit Plan Disclosure [Line Items]
Contributions to the plan	$ 0	$ 0
Shares held in trust	0	39,690

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017	[1]	Sep. 30, 2017	[1]	Jun. 30, 2017	[1]	Mar. 31, 2017	[1]	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Provision for income taxes (credit)
Current expense													$ 9,451	$ 8,642	$ 3,046
Deferred expense (benefit)													618	(1,157)	(547)
TOTALS	$ 4,084		$ 2,009		$ 2,004		$ 1,972		$ 2,014	$ 1,967	$ 1,833	$ 1,671	$ 10,069	$ 7,485	$ 2,499

[1] Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes (Textual) [Abstract]
Federal statutory income tax rate		21.00%	35.00%
Valuation allowance for deferred tax assets	$ 0		$ 0	$ 0
Unrecognized tax benefits	0		0	0
Penalties or interest			0	0
Amounts accrued for penalties or interest	0		0	0
Impact of enactment of federal tax reform	1,800		1,793	0	$ 0
Alternative minimum tax credit carryforward	$ 64		$ 64	$ 205
Earliest Tax Year
Income Taxes (Textual) [Abstract]
Open tax year			2014
Latest Tax Year
Income Taxes (Textual) [Abstract]
Open tax year			2017

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Income Taxes (Details 1) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017		Sep. 30, 2017	[1]	Jun. 30, 2017	[1]	Mar. 31, 2017	[1]	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Statutory tax													$ 11,474	$ 9,815	$ 3,694
Effect of nontaxable interest													(2,054)	(1,684)	(1,403)
Bank owned life insurance, net													(291)	(283)	(242)
Tax credits													(371)	(367)	(236)
Effect of nontaxable insurance premiums													(348)	(143)	0
Impact of enactment of federal tax reform	$ 1,800												1,793	0	0
Nondeductible acquisition costs													70	40	401
Other													(204)	107	285
TOTALS	$ 4,084	[1]	$ 2,009		$ 2,004		$ 1,972		$ 2,014	$ 1,967	$ 1,833	$ 1,671	$ 10,069	$ 7,485	$ 2,499

[1] Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Allowance for credit losses	$ 2,525	$ 3,621
Net unrealized loss on securities available for sale	0	1,522
Deferred and accrued compensation	981	1,922
Deferred loan fees and costs	517	729
Post-retirement benefits	0	25
Nonaccrual loan interest income	416	306
Other-than-temporary impairment	25	196
Restricted stock	647	509
AMT credit carryforward	64	205
Other	73	106
Gross deferred tax assets	5,248	9,141
Deferred tax liabilities:
Depreciation and amortization	(448)	(740)
Net unrealized gain on securities available for sale	(159)	0
Federal Home Loan Bank dividends	(656)	(1,093)
Purchase accounting adjustments	(744)	(1,559)
Mortgage servicing rights	(261)	(299)
Prepaid expenses	(277)	(271)
Other	(8)	(15)
Gross deferred tax liabilities	(2,553)	(3,977)
NET DEFERRED TAX ASSET	$ 2,695	$ 5,164

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Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Comprehensive Income Net Of Tax [Abstract]
Unrealized holding (losses) gains on available-for-sale securities during the year, pre-tax		$ 5,107	$ (4,270)	$ (1,403)
Reclassification adjustment for (gains) losses included in net income, pre-tax	[1]	(4)	(73)	(94)
Net unrealized holding gains (losses)		5,103	(4,343)	(1,497)
Change in funded status of post-retirement health plan, pre-tax		(55)	(156)	20
Net other comprehensive income (loss), pre-tax		5,048	(4,499)	(1,477)
Unrealized holding (losses) gains on available-for-sale securities during the year, tax		(1,788)	1,494	491
Reclassification adjustment for (gains) losses included in net income, tax	[1]	2	26	33
Net unrealized (losses) gains on available-for-sale securities, tax		(1,786)	1,520	524
Change in funded status of post-retirement health plan, tax		19	55	(7)
Net other comprehensive income (loss), tax		(1,767)	1,575	517
Unrealized holding (losses) gains on available-for-sale securities during the year, after-tax		3,319	(2,776)	(912)
Reclassification adjustment for (gains) losses included in net income, after-tax	[1]	(2)	(47)	(61)
Unrealized holding gains (losses), net of reclassification and tax		3,317	(2,823)	(973)
Change in funded status of post-retirement health plan, net of tax		(36)	(101)	13
Other comprehensive income (loss), net of tax		$ 3,281	$ (2,924)	$ (960)

[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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Related Party Transactions (Details) - Affiliated Entity $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Loans to principal officers, directors, and their affiliates
Beginning balance	$ 1,096
New loans	15
Effect of changes in composition of related parties	19,703
Repayments	(293)
Ending balance	$ 20,521

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Related Party Transactions (Details Textual) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Affiliated Entity
Related Party Transactions (Textual) [Abstract]
Deposits from principal officers, directors, and their affiliates	$ 5.9	$ 12.0

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Basic EPS
Net income	$ 5,235	$ 5,983	$ 5,710	$ 5,783	$ 5,363	$ 5,376	$ 5,020	$ 4,798	$ 22,711	$ 20,557	$ 8,055
Weighted average shares outstanding									27,567,909	27,180,230	22,678,338
Basic earnings per share									$ 0.82	$ 0.76	$ 0.36
Diluted EPS
Net income	$ 5,235	$ 5,983	$ 5,710	$ 5,783	$ 5,363	$ 5,376	$ 5,020	$ 4,798	$ 22,711	$ 20,557	$ 8,055
Weighted average shares outstanding									27,567,909	27,180,230	22,678,338
Average unvested restricted stock awards									51,167	29,108	5,232
Weighted average shares for diluted earnings per share									27,619,076	27,209,338	22,683,570
Diluted earnings per share									$ 0.82	$ 0.76	$ 0.36

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Earnings Per Share (Details Textual) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Restricted Stock Awards
Earnings Per Share Basic [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	0	0
Common stock
Earnings Per Share Basic [Line Items]
Anti-dilutive securities excluded from computation of earnings per share			193,105

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Interest Rate Swaps (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Derivative [Line Items]
Weighted average pay rate on interest-rate swaps	4.46%	4.34%	4.25%
Weighted average receive rate on interest-rate swaps	3.81%	3.04%	2.70%
Weighted average maturity (years)	3 years 2 months 12 days	4 years 9 months 18 days	4 years 1 month 6 days
Fair value of interest-rate swaps	$ (653)	$ (685)	$ (789)
Loan yield maintenance provisions	653	685	789
Interest rate swaps
Derivative [Line Items]
Notional amounts	$ 38,481	$ 34,360	$ 30,763

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Interest Rate Swaps (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest rate swaps
Derivative [Line Items]
Net Gain or Loss recognized in earnings	$ 0	$ 0	$ 0

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Goodwill and other intangibles	$ 45,369								$ 45,154				$ 45,369	$ 45,154
Total assets	2,159,069								1,966,113				2,159,069	1,966,113
Net interest income	19,067		$ 18,675		$ 18,373		$ 17,531		17,291	$ 17,193	$ 16,889	$ 16,747	73,646	68,120	$ 49,737
Provision for loan losses													3,350	3,870	3,510
Service fees, security gains and other noninterest income	6,051		6,058		6,055		5,887		6,076	6,485	5,737	4,946	24,051	23,244	18,306
Noninterest expense													58,477	56,321	51,521
Amortization and depreciation expense													3,090	3,131	2,458
INCOME BEFORE INCOME TAXES	9,319		7,992		7,714		7,755		7,377	7,343	6,853	6,469	32,780	28,042	10,554
Income tax	4,084	[1]	2,009	[1]	2,004	[1]	1,972	[1]	2,014	1,967	1,833	1,671	10,069	7,485	2,499
NET INCOME	5,235		$ 5,983		$ 5,710		$ 5,783		5,363	$ 5,376	$ 5,020	$ 4,798	22,711	20,557	8,055
Eliminations And Others
Segment Reporting Information [Line Items]
Goodwill and other intangibles	(822)								(646)				(822)	(646)
Total assets	3,935								2,805				3,935	2,805
Net interest income													(81)	(88)	(33)
Provision for loan losses													0	0	0
Service fees, security gains and other noninterest income													(340)	(278)	(255)
Noninterest expense													1,029	1,319	4,562
Amortization and depreciation expense													0	0	0
INCOME BEFORE INCOME TAXES													(1,450)	(1,685)	(4,850)
Income tax													(872)	(670)	(991)
NET INCOME													(578)	(1,015)	(3,859)
Trust Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	4,426								4,681				4,426	4,681
Total assets	11,261								10,980				11,261	10,980
Net interest income													109	95	65
Provision for loan losses													0	0	0
Service fees, security gains and other noninterest income													6,548	6,341	6,239
Noninterest expense													4,801	4,818	4,719
Amortization and depreciation expense													277	305	339
INCOME BEFORE INCOME TAXES													1,579	1,313	1,246
Income tax													455	462	425
NET INCOME													1,124	851	821
Bank Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	39,120								38,235				39,120	38,235
Total assets	2,140,508								1,948,800				2,140,508	1,948,800
Net interest income													73,618	68,113	49,705
Provision for loan losses													3,350	3,870	3,510
Service fees, security gains and other noninterest income													15,986	15,191	10,192
Noninterest expense													51,284	48,804	40,753
Amortization and depreciation expense													2,558	2,519	1,759
INCOME BEFORE INCOME TAXES													32,412	28,111	13,875
Income tax													10,509	7,586	2,968
NET INCOME													21,903	20,525	10,907
Retirement Consulting Segment | Operating Segments
Segment Reporting Information [Line Items]
Goodwill and other intangibles	2,645								2,884				2,645	2,884
Total assets	$ 3,365								$ 3,528				3,365	3,528
Net interest income													0	0	0
Provision for loan losses													0	0	0
Service fees, security gains and other noninterest income													1,857	1,990	2,130
Noninterest expense													1,363	1,380	1,487
Amortization and depreciation expense													255	307	360
INCOME BEFORE INCOME TAXES													239	303	283
Income tax													(23)	107	97
NET INCOME													$ 262	$ 196	$ 186

[1] Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Data Abstract
Total interest income	$ 21,084		$ 20,551		$ 20,042		$ 18,850		$ 18,469	$ 18,332	$ 17,950	$ 17,747	$ 80,527	$ 72,498	$ 53,827
Total interest expense	2,017		1,876		1,669		1,319		1,178	1,139	1,061	1,000	6,881	4,378	4,090
NET INTEREST INCOME	19,067		18,675		18,373		17,531		17,291	17,193	16,889	16,747	73,646	68,120	49,737
Provision for loan losses	400		950		950		1,050		990	1,110	990	780
Noninterest income	6,051		6,058		6,055		5,887		6,076	6,485	5,737	4,946	24,051	23,244	18,306
Merger related costs	452		270		104		62		19	31	224	289	888	563	6,392
Noninterest expense	14,947		15,521		15,660		14,551		14,981	15,194	14,559	14,155	61,567	59,452	53,979
INCOME BEFORE INCOME TAXES	9,319		7,992		7,714		7,755		7,377	7,343	6,853	6,469	32,780	28,042	10,554
INCOME TAXES	4,084	[1]	2,009	[1]	2,004	[1]	1,972	[1]	2,014	1,967	1,833	1,671	10,069	7,485	2,499
NET INCOME	$ 5,235		$ 5,983		$ 5,710		$ 5,783		$ 5,363	$ 5,376	$ 5,020	$ 4,798	$ 22,711	$ 20,557	$ 8,055
Earnings per share - basic and diluted	$ 0.19		$ 0.22		$ 0.21		$ 0.21		$ 0.20	$ 0.20	$ 0.19	$ 0.18	$ 0.82	$ 0.76	$ 0.36

[1] Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.

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Quarterly Financial Data (Unaudited) (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Impact of enactment of federal tax reform	$ 1,800	$ 1,793	$ 0	$ 0

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Parent Company Only Condensed Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2017		Sep. 30, 2017		Jun. 30, 2017		Mar. 31, 2017		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Assets:
Securities available for sale	$ 393,331								$ 369,995				$ 393,331	$ 369,995
Other	41,254								38,775				41,254	38,775
TOTAL ASSETS	2,159,069								1,966,113				2,159,069	1,966,113
Liabilities:
Other liabilities	15,717								14,645				15,717	14,645
TOTAL LIABILITIES	1,916,995								1,752,897				1,916,995	1,752,897
TOTAL STOCKHOLDERS' EQUITY	242,074								213,216				242,074	213,216	$ 198,047
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	2,159,069								1,966,113				2,159,069	1,966,113
Income:
Dividends from subsidiaries													537	515	287
Income tax benefit	(4,084)	[1]	$ (2,009)	[1]	$ (2,004)	[1]	$ (1,972)	[1]	(2,014)	$ (1,967)	$ (1,833)	$ (1,671)	(10,069)	(7,485)	(2,499)
NET INCOME	5,235		5,983		5,710		5,783		5,363	5,376	5,020	4,798	22,711	20,557	8,055
Cash flows from operating activities:
Net income	5,235		$ 5,983		$ 5,710		5,783		5,363	$ 5,376	$ 5,020	4,798	22,711	20,557	8,055
Security gains													(4)	(73)	(94)
Cash flows from investing activities:
Proceeds from maturities of available for sale securities													43,104	59,904	63,243
Cash flows from financing activities:
Repurchase of common shares													0	(168)	(213)
Cash dividends paid													(6,012)	(4,326)	(2,683)
NET CHANGE IN CASH AND CASH EQUIVALENTS													15,836	(14,236)	28,586
Farmers National Banc Corp
Assets:
Cash	3,614								2,620				3,614	2,620
Securities available for sale	258								234				258	234
Other	1,442								1,284				1,442	1,284
TOTAL ASSETS	244,885								215,785				244,885	215,785
Liabilities:
Other liabilities	250								57				250	57
Note payable	350								350				350	350
Subordinate debt	2,209								2,160				2,209	2,160
Other accounts payable	2								2				2	2
TOTAL LIABILITIES	2,811								2,569				2,811	2,569
TOTAL STOCKHOLDERS' EQUITY	242,074								213,216				242,074	213,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	244,885								215,785				244,885	215,785
Income:
Interest and dividends on securities													5	5	2
Security gains/(losses)													0	(19)	0
Other income													0	28	0
TOTAL INCOME													9,603	7,470	24,896
Interest on borrowings													(103)	(96)	(35)
Other expenses													(2,294)	(1,997)	(4,817)
Income before income tax benefit and undistributed subsidiary income													7,206	5,377	20,044
Income tax benefit													876	670	991
Equity in undistributed net income of subsidiaries (dividends in excess of net income)													14,629	14,510	(12,980)
NET INCOME													22,711	20,557	8,055
Cash flows from operating activities:
Net income													22,711	20,557	8,055
Security gains													0	19	0
Dividends in excess of net income (Equity in undistributed net income of subsidiary)													(14,629)	(14,510)	12,980
Other													78	(368)	(269)
NET CASH FROM OPERATING ACTIVITIES													8,160	5,698	20,766
Cash flows from investing activities:
Proceeds from maturities of available for sale securities													0	59	0
Net cash paid in business combinations													(1,154)	0	(18,077)
NET CASH FROM INVESTING ACTIVITIES													(1,154)	59	(18,077)
Cash flows from financing activities:
Proceeds from reissuance of treasury shares													0	0	0
Repurchase of common shares													0	(168)	(213)
Cash dividends paid													(6,012)	(4,326)	(2,683)
NET CASH FROM FINANCING ACTIVITIES													(6,012)	(4,494)	(2,896)
NET CHANGE IN CASH AND CASH EQUIVALENTS													994	1,263	(207)
Beginning cash and cash equivalents							$ 2,620					$ 1,357	2,620	1,357	1,564
Ending cash and cash equivalents	3,614								2,620				3,614	2,620	1,357
Farmers National Banc Corp | National Associates Incorporated
Assets:
Investment in subsidiaries	2,649								2,787				2,649	2,787
Income:
Dividends from subsidiaries													400	800	400
Equity in undistributed net income of subsidiaries (dividends in excess of net income)													(138)	(604)	(214)
Cash flows from operating activities:
Dividends in excess of net income (Equity in undistributed net income of subsidiary)													138	604	214
Farmers National Banc Corp | Bank Segment
Assets:
Investment in subsidiaries	224,843								198,030				224,843	198,030
Income:
Dividends from subsidiaries													8,373	5,836	23,744
Equity in undistributed net income of subsidiaries (dividends in excess of net income)													13,529	14,688	(12,837)
Cash flows from operating activities:
Dividends in excess of net income (Equity in undistributed net income of subsidiary)													(13,529)	(14,688)	12,837
Farmers National Banc Corp | Trust Segment
Assets:
Investment in subsidiaries	10,495								10,184				10,495	10,184
Income:
Dividends from subsidiaries													825	820	750
Equity in undistributed net income of subsidiaries (dividends in excess of net income)													299	31	71
Cash flows from operating activities:
Dividends in excess of net income (Equity in undistributed net income of subsidiary)													(299)	(31)	(71)
Farmers National Banc Corp | Captive
Assets:
Investment in subsidiaries	$ 1,584								$ 646				1,584	646
Income:
Equity in undistributed net income of subsidiaries (dividends in excess of net income)													939	395	0
Cash flows from operating activities:
Dividends in excess of net income (Equity in undistributed net income of subsidiary)													$ (939)	$ (395)	$ 0

[1] Income tax expense for the fourth quarter was elevated due to the additional $1.8 million of tax expense from the re-measurement of the Company’s net deferred tax asset.