FARMERS NATIONAL BANC CORP /OH/, 10-K, 1997-03-26

FARMERS NATIONAL BANC CORP /OH/
10-K, 1997-03-26
STATE COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)

For the fiscal year ended December 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)

For the transition period from ________ to __________

Commission file number 0-12055

Farmers National Banc Corp.
(Exact name of registrant as specified in its charter)

Ohio 34-1371693
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

20 South Broad Street
Canfield, Ohio 44406 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: None

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

Common Stock, no par value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark 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. [ ]

The registrant estimates that as of February 24, 1997, the
aggregate market value of the voting stock held by
non-affiliates of the registrant (including 242,536 shares held
by officers and directors of the registrant) was approximately
$80,496,925.

As of February 24, 1997, the registrant had outstanding
3,311,268 shares of common stock having no par value.

DOCUMENTS INCORPORATED BY REFERENCE

Parts of Form 10-K
into which
Document Document is Incorporated

1996 Annual Report to Shareholders II

Definitive proxy statement for the 1996 Annual
Meeting of Shareholders to be held on March 27, 1997 III

Form 10-K Cross Reference Index to Annual Report to Shareholders

Part I

Item 1 - Business
Description of Business 7
Average Balance Sheets/Interest /Rates 11
Securities 17
Risk Elements of Loan Portfolio 16
Loan Loss Experience 15
Deposits 18
Financial Ratios 10, 12
Short-Term Borrowings 30

Part II
Item 5
Market For Registrant's Common Stock
and Related Stockholder Matters 20

Item 6
Selected Financial Data 10

Item 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-19

Item 8
Financial Statements and Supplementary Data 22-36

Item 9
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure - None

Part IV
Report of Hill, Barth & King, Inc.,
Independent Auditors 21

Financial Statements:
Consolidated Balance Sheets -
December 31, 1996 and 1995 22
Consolidated Statements of Income -
Calendar Years 1996, 1995 and 1994 23
Consolidated Statement of Changes in
Stockholders' Equity - Calendar Years
1996, 1995 and 1994 24
Consolidated Statements of Cash
Flows - Calendar Years 1996, 1995
and 1994. 25
Notes to Financial Statements 26-36

FARMERS NATIONAL BANC CORP.
FORM 10-K
1996

INDEX

Part I. Page

Item 1. Business:
General I-2
Volume and Rate Analysis I-7
Loans I-8
Allocation of Allowance For Loan Losses I-9
Deposits I-10

Item 2. Properties I-11

Item 3. Legal Proceedings I-11

Item 4. Submission of Matters to a Vote of Security Holders I-11

Part III.

Item 10. Directors and Executive Officers of the Registrant III-1

Item 11. Executive Compensation III-2

Item 12. Security Ownership of Certain Beneficial Owners and
Management III-2

Item 13. Certain Relationships and Related Transactions III-2

Part IV.

Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K IV-1

Part I

Item 1. Business General

The Corporation

The registrant, Farmers National Banc Corp. (herein sometimes
referred to as the Corporation), is a one-bank holding company
registered under the Bank Holding Company Act of 1956, as
amended. The only subsidiary is The Farmers National Bank of
Canfield, which was acquired March 31, 1983. The Corporation
and its subsidiary operate in one industry, domestic banking.

The Corporation conducts no business activities except for
investment in securities permitted under the Bank Holding
Company Act. Bank holding companies are permitted under
Regulation Y of the Board of Governors of the Federal Reserve
System to engage in other activities such as leasing and
mortgage banking.

The Bank

The Bank is a full-service national bank engaged in commercial
and retail banking in Mahoning and Columbiana Counties, Ohio.
The Bank's commercial 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 and travelers
checks, "E" Bond transactions, utility bill payments, MasterCard
and Visa credit cards, and other miscellaneous services normally
offered by Commercial Banks. In addition, the Bank offers
Discount Brokerage Service.

Supervision and Regulation

The Corporation is a one bank holding company and is
regulated by the Federal Reserve Bank (the "FRB"). The bank is
a national bank and is regulated by the Office of the
Comptroller of the Currency (the "OCC"), as well as the Federal
Deposit Insurance Corporation (the "FDIC"). Changes have
developed over the past several years regarding minimum capital
requirements for financial institutions. A listing of the
minimum requirements for capital and the Corporation's capital
position as of December 31, 1996 are presented in Note J on
page 31 of the annual report to shareholders for the year ended
December 31, 1996 and is hereby incorporated by reference.

The Corporation is subject to regulation under the Bank
Holding Company Act of 1956, as amended. This Act restricts the
geographic and product range of bank holding companies by
defining the types and locations of institutions the holding
companies can own or acquire. This act also regulates
transactions between the Corporation and the bank and generally
prohibits tie-ins between credit and other products and
services.

Supervision and Regulation (Continued)

The bank is subject to regulation under the National
Banking Act and is periodically examined by the OCC and is
subject to the rules and regulations of the FRB. As an insured
institution and member of the Bank Insurance Fund ("BIF"), the
bank is also subject to regulation by the FDIC. Establishment
of branches is subject to approval of the OCC and geographic
limits established by state law. Ohio branch banking law
permits a bank having its principal place of business in the
State of Ohio to establish branch offices in any county in Ohio
without geographic restrictions.

FDICIA

The Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA") revised the bank regulatory and funding
provisions of the Federal Deposit Insurance Act and several
other federal banking statutes. Among other things, FDICIA
requires federal banking agencies to broaden the scope of
corrective action taken with respect to banks that do not meet
minimum capital requirements and to take such actions promptly
in order to minimize losses to the FDIC.

FDICIA established five capital tiers: "well capitalized";
"adequately capitalized"; "undercapitalized"; "significantly
undercapitalized"; and "critically undercapitalized" and imposes
significant restrictions on the operations of a depository
institution that is not in either of the first two of such
categories. A depository institution's capital tier will depend
upon the relationship of its capital to various capital
measures. A depository institution will be deemed to be "well
capitalized" if it significantly exceeds the minimum level
required by regulation for each relevant capital measure,
"adequately capitalized" if it meets each such measure,
"undercapitalized" if it is significantly below any such measure
and "critically undercapitalized" if it fails to meet any
critical capital level set forth in regulations. An institution
may be deemed to be in a capitalization category that is lower
than is indicated by its actual capital position if it receives
an unsatisfactory examination rating or is deemed to be in an
unsafe or unsound condition or to be engaging in unsafe or
unsound practices.

Under regulations adopted under these provisions, for an
institution to be well capitalized it must have a total
risk-based capital ratio of at least 10%, a Tier I risk-based
capital ratio of at least 6% and a Tier I leverage ratio of at
least 5% and not be subject to any specific capital order or
directive. For an institution to be adequately capitalized, it
must have a total risk-based capital ratio of at least 8%, a
Tier I risk-based capital ratio of at least 4% and a Tier I
leverage ratio of at least 4% (or in some cases 3%). Under the
regulations, an institution will be deemed to be
undercapitalized if the bank has a total risk-based capital
ratio that is less than 8%, a Tier I risk-based capital ratio
that is less than 4% or a Tier I leverage ratio of less than 4%
(or in some cases 3%). An institution will be deemed to be
significantly undercapitalized if the bank has a total
risk-based capital ratio that is less than 6%, a Tier I
risk-based capital ratio that is less than 3%, or a leverage
ratio that is less than 3% and will be deemed to be critically
undercapitalized if it has a ratio of tangible equity to total
assets that is equal to or less than 2%.

Supervision and Regulation (Continued)

FDICIA generally prohibits a depository institution from
making a capital distribution (including payment of dividends)
or paying management fees to any entity that controls the
institution if it thereafter would be undercapitalized.

If an institution becomes undercapitalized, it will be
generally restricted from borrowing from the Federal Reserve,
increasing its average total assets, making any acquisitions,
establishing any branches or engaging in any new line of
business. An undercapitalized institution must submit an
acceptable capital restoration plan to the appropriate federal
banking agency, which plan must, in the opinion of such agency,
be based on realistic assumptions and be "likely to succeed" in
restoring the institution's capital. In connection with the
approval of such a plan, the holding company of the institution
must guarantee that the institution will comply with the plan,
subject to a limitation of liability equal to a portion of the
institution's assets. If an undercapitalized institution fails
to submit an acceptable plan or fails to implement such a plan,
it will be treated as if it is significantly undercapitalized.

Under FDICIA, bank regulators are directed to require
"significantly undercapitalized" institutions, among other
things, to restrict business activities, raise capital through a
sale of stock, merge with another institution and/or take any
other action which the agency determines would better carry out
the purposes of FDICIA.

Within 90 days after an institution is determined to be
"critically undercapitalized", the appropriate federal banking
agency must, in most cases, appoint a receiver or conservator
for the institution or take such other action as the agency
determines would better achieve the purposes of FDICIA. In
general, "critically undercapitalized" institutions will be
prohibited from paying principal or interest on their
subordinated debt and will be subject to other substantial
restrictions.

Under FDICIA, an institution that is not well capitalized
is generally prohibited from accepting brokered deposits.
Undercapitalized institutions are prohibited from offering
interest rates on deposits significantly higher than prevailing
rates.

The provisions of FDICIA governing capital regulations
became effective on December 19, 1992. FDICIA also directs that
each federal banking agency prescribe standards for depository
institutions and depository institution holding companies
relating to internal controls, information systems, internal
audit systems, loan documentation, credit underwriting, interest
rate exposure, asset growth, a maximum ratio of classified
assets to capital, a minimum ratio of market value to book value
for publicly traded shares (if feasible) and such other
standards as the agency deems appropriate.

Supervision and Regulation (Continued)

FDICIA also contains a variety of other provisions that
could affect the operations of the Corporation, including new
reporting requirements, regulatory standards for real estate
lending, "truth in savings" provisions, the requirement that a
depository institution give 90 days' prior notice to customers
and regulatory authorities before closing any branch, limitations
on credit exposure between banks, restrictions on loans to a
bank's insiders and guidelines governing regulatory examinations.

Pursuant to FDICIA, the FDIC has developed a transitional
risk-based assessment system, under which, beginning on January
1, 1993, the assessment rate for an insured depository
institution varied according to its level of risk. An
institution's risk category will depend upon whether the
institution is well capitalized, adequately capitalized or less
than adequately capitalized and whether it is assigned to
Subgroup A, B or C. Subgroup A institutions are financially
sound institutions with few minor weaknesses; Subgroup B
institutions are institutions that demonstrate weaknesses which,
if not corrected, could result in significant deterioration; and
Subgroup C institutions are institutions for which there is a
substantial probability that the FDIC will suffer a loss in
connection with the institution unless effective action is taken
to correct the area of weakness. Based on its capital and
supervisory subgroups, each BIF member institution will be
assigned an annual FDIC assessment rate per $100 of insured
deposits.

INTERSTATE BANKING AND BRANCHING LEGISLATION

The Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "IBBEA") authorizes interstate acquisitions of
banks and bank holding companies without geographic constraint
beginning September 29, 1995. Beginning June 1, 1997, the IBBEA
also authorizes banks to merge with banks located in another
state provided that neither state has "opted out" of interstate
branching between September 29, 1994 and May 31, 1997. States
also may enact legislation permitting interstate merger
transactions prior to June 1, 1997. After acquiring interstate
branches through a merger, a bank may establish additional
branches in that state at the same locations as any bank
involved in the merger could have established branches under
state and federal law. In addition, a bank may establish a de
novo branch in another state that expressly permits the
establishment of such branches. A bank that establishes a de
novo interstate branch may thereafter establish additional
branches on the same basis as a bank that has established
interstate branches through a merger transaction.

If a state "opts out" of interstate branching, no bank from
another state may establish a branch in that state, whether
through a merger or de novo establishment. Several states are
considering legislation to opt out of the interstate branching
provisions of the IBBEA or, alternatively, to permit interstate
branching prior to the June 1, 1997 statutory effective date. It
is not possible to predict the full impact of these actions on
the Bank or the Corporation until May 31, 1997, the date by
which all such statutes must be adopted.

Competition

The Bank competes with state and national banks located in
Mahoning and Columbiana counties.

Many competitors have substantially greater resources than the
Bank. In the opinion of management, the principal methods of
competition are the rates of interest charged for loans, the
rates of interest paid for funds, the fees charged for services
and the availability of services.

RATE AND VOLUME ANALYSIS
<TABLE>
The following table analyzes by rate and volume the dollar amount of changes in the components of the
interest differential:
<CAPTION>
(In Thousands of Dollars)
1996 change from 1995 1995 change from 1994
Net Change Due Change Due Net Change Due Change Due
Change To Volume To Rate Change To Volume To Rate
<S> <C> <C> <C> <C> <C> <C>
Tax Equivalent Interest Income
Interest-earning assets:
Loans $2,939 $2,393 $546 $1,669 $974 $695
Taxable securities 169 65 104 21 (181) 202
Tax-exempt securities 13 15 (2) 19 (9) 28
Federal funds sold (199) (154) (45) 527 306 221
Total interest income $2,922 $2,319 $603 $2,236 $1,090 $1,146

Interest Expense
Time deposits $890 $817 $73 $1,907 $831 $1,076
Savings deposits (55) 41 (96) (270) (184) (86)
Demand deposits 83 77 6 (132) (29) (103)
Repurchase agreements 57 90 (33) 151 40 111
Borrowings 94 110 (16) 32 7 25
Total interest expense $1,069 $1,135 ($66) $1,688 $665 $1,023

Increase in tax equivalent
net interest income $1,853 $548
<FN>
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.
</FN>
</TABLE>

Loans

Total net loans were $263,504,434 at year-end 1996 compared to
$229,248,832 at year-end 1995. This is an increase of
$34,255,602, or 14.94%. Loans comprised 81.1% of the Bank's
average earning assets during 1996, compared to 78.8% in 1995.
The product mix in the Loan Portfolio shows Commercial Loans
comprising 9.9%, Real Estate Mortgage Loans 39.2% and
Installment Loans to Individuals 50.9% at December 31, 1996,
compared with 9.7%, 42.5% and 47.8%, respectively, at December
31, 1995.

Loans contributed 86.5% of total interest income in 1996
compared to 84.6% in 1995. Loan yield was 8.59% in 1996, 46
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
which 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.

Installment Loans to Individuals increased from $110,805,000 on
December 31, 1995 to $135,832,000 on December 31, 1996 which
represents a 22.6% increase. Management continues to target the
automobile dealer network to purchase indirect Installment
Loans. Dealer paper was purchased using strict underwriting
guidelines with an emphasis on quality. Indirect Loans comprise
77% of the Installment Loan Portfolio. Net loan losses on the
Installment Loan portfolio were $275,000 in 1996 as compared to
$148,000 in 1995. This represents .20% of total Installments
Loans outstanding for 1995 and .14% for 1995.

Real Estate Mortgage Loans increased to $104,389,000 at December
31, 1996, an increase of 5.8% over 1995. These loans are all
made within the Bank's primary market area. The corporation
originated both fixed rate and adjustable rate mortgages during
1996. All mortgage loans made in 1996 are held in the Mortgage
Loan portfolio and are not sold on the secondary market. Fixed
rate terms are limited to fifteen year terms while adjustable
rate products are offered with maturities up to thirty years.

Commercial Loans at December 31, 1996 increased from year-end
1995 with outstanding balances of $26,481,000. This portfolio
is comprised of primarily variable rate loans. 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 and business types. 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 improvements, the purchase of
inventory, general working capital purposes and small business
lines of credit.

ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
The allowance for possible loan and lease losses has been allocated according to the amount deemed to be reasonably
necessary to provide for the possibility of losses being incurred within the following categories of loans as of the dates
indicated:
<CAPTION>
(In Thousands of Dollars)

December 31, 1996 1995 1994 1993 1992
Loans Loans Loans Loans Loans
to to to to to
Total Total Total Total Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial,
Financial and
Agricultural $1,873 9.9% $1,800 9.7% $1,700 11.2% $1,692 11.9% $1,599 12.8%

Real Estate-
Mortgage 263 39.2% 250 42.5% 200 42.6% 170 40.1% 75 38.0%

Installment
Loans to
Individuals 1,062 50.9% 861 47.8% 846 46.2% 759 48.0% 600 49.2%
$3,198 100.0% $2,911 100.0% $2,746 100.0% $2,621 100.0% $2,274 100.0%

<FN>
The allocation of the allowance as shown in the table above should not be interpreted as an indication
that charge-offs in 1997 will occur in the same proportions or that the allocation indicates future charge-off
trends. Furthermore, the portion allocated to each loan category is not the total amount available for
losses that might occur within such categories since the total allowance is a general allowance applicable
to the entire portfolio.
</FN>
</TABLE>

Deposits

Deposits represent the Corporation'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
Corporation's total deposits grew from $267,955,000 in 1995 to
$283,811,000 in 1996, which equates to an increase of 5.9% .
Most of this growth occurred in time deposits, which increased
from $119,468,000 in 1995 to $129,651,000 in 1996. This
increase is primarily the result of a special rate offering on
certificates of deposit occurring in the fourth quarter of the
year which generated approximately $7,200,000 in new money to
the Corporation. As a result of this special offering, the
overall cost of time deposits increased slightly, from 5.71% in
1995 to 5.77% in 1996.

Item 2. Properties

Farmers National Banc Corp.'s Properties

The Farmers National Banc Corp. owns no property. Operations
are conducted at 20 South Broad Street, Canfield, Ohio.

Bank Property

The Main Office is located at 20 S. Broad Street, Canfield,
Ohio. The other eight offices of the bank are:

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 1858 E. State Street, Salem, Ohio

Columbiana Office 340 State Rt. 14, Columbiana, Ohio

Leetonia Office 16 Walnut St., Leetonia, Ohio

Damascus Office 29053 State Rt. 62 Damascus, Ohio

The bank owns the Main Office, Austintown, Cornersburg, Lake
Milton, Salem, Columbiana, Leetonia and Damascus Offices. The
Colonial Plaza and Western Reserve offices are occupied under
operating leases expiring at various times to 1999. All of the
leases provide for renewal options in favor of the bank.

Item 3. Legal Proceedings

There are no material pending legal proceedings to which the
registrant or its subsidiary is a party or of which any of its
property is subject, except proceedings which arise in the
ordinary course of business. In the opinion of management,
pending legal proceedings will not have a material affect on the
consolidated financial position of the registrant or its
subsidiary.

Item 4. Submission of Matters to a Vote of Security Holders

There are no matters submitted to a vote of security holders
through the solicitation of proxies or otherwise during the
fourth quarter of 1996.

PART III

Item 10. Directors and Executive Officers of the Registrant

Information relating to Directors is set forth in the
registrant's definitive proxy statement, which was used in
connection with its annual meeting of shareholders which will be
held March 27, 1997. The proxy statement is attached hereto.

Executive Officers of the Registrant

The names, ages and positions of the executive officers as of
March 1, 1997:

Name Age Position Held

William D. Stewart 67 Chairman

Richard L. Calvin 70 Vice Chairman

Frank L. Paden 46 President and Secretary

Carl D. Culp 33 Executive Vice President
and Treasurer

Donald F. Lukas 50 Senior Vice President

Adrianne R. Kempers 39 Auditor

Officers are elected annually by the Board of Directors
immediately following the annual meeting of shareholders. 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. William D. Stewart has served as Chairman since March 1996.
Prior to that time, he was President and Secretary since the
inception of registrant on March 31, 1983, was President of the
Bank since 1972 and has held various other executive positions
with the Bank.

Mr. Richard L. Calvin has served as Vice Chairman since March
1996. Prior to that time, he was Executive Vice President and
Treasurer of the registrant since its inception on March 31,
1983, was Executive Vice President of the bank since 1972 and
has held various other executive positions with the Bank.

Mr. Frank L. Paden has served as President and Secretary since
March 1996. Prior to that time he was Executive Vice President
of the registrant since March 1995, was Executive Vice President
of the Bank since March 1995 and has held various other
executive positions with the Bank.

PART III, (Continued)

Mr. Carl D. Culp has served as Executive Vice President and
Treasurer since March 1996. Prior to that time he was
Controller of the registrant since November 1995 and was
Controller of the Bank since November 1995.

Mr. Donald F. Lukas has served as Senior Vice President of the
registrant since March 1996. Prior to that time, he was Vice
President of the Bank since March 1987.

Ms. Adrianne R. Kempers has served as Auditor of the registrant
since November 1995 and as Auditor of the Bank since November
1995.

Item 11. Executive Compensation

Information regarding this item is set forth in the registrant's
definitive proxy statement, which was used in connection with
its annual meeting of shareholders which will be held March 27,
1997. The proxy statement is attached hereto.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information relating to this item is set forth in the
registrant's definitive proxy statement, which was used in
connection with its annual meeting of shareholders which will be
held March 27, 1997. The proxy statement is attached hereto.

Item 13. Certain Relationships and Related Transactions

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)1. Financial Statements

Included in Part II of this report

Item 8., Financial Statements and Supplementary Data
is set forth in the registrant's 1996 Annual Report to
Shareholders and is incorporated by reference in Part II
of this report.

(a)2. Financial Statement Schedules Page

Accountant's consent IV-2

All schedules are omitted because they are
not applicable.

(a)3. Exhibits

The exhibits filed or incorporated by reference as a part of
this report are listed in the Index of Exhibits, which appears
at page IV-4 hereof and is incorporated herein by reference.

(b) Report on Form 8-K

No reports were filed for three months ended December 31, 1996.

INDEPENDENT AUDITORS' CONSENT

FARMERS NATIONAL BANC CORP.:

We hereby consent to the incorporation by reference in this Registration
Statement of our report dated January 23, 1997, relating to the consolidated
financial statements of Farmers National Banc Corp. and subsidiary.

/s/ HILL, BARTH & KING, INC.

Warren, Ohio
March 25, 1997

SIGNATURES

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

Farmers National Banc Corp. Farmers National Banc Corp.

by__________________________ by_____________________________

Frank L. Paden Carl D. Culp
President and Secretary Executive Vice President and
Treasurer

________________________ Chairman March 25, 1997
William D. Stewart

________________________ Director March 25, 1997
Benjamin R. Brown

________________________ Vice Chairman March 25, 1997
Richard L. Calvin

________________________ Director March 25, 1997
Joseph O. Lane

________________________ Director March 25, 1997
David C. Myers

________________________ Director March 25, 1997
Edward A. Ort

________________________ President March 25, 1997
Frank L. Paden and Director

________________________ Director March 25, 1997
Ronald V. Wertz

INDEX TO EXHIBITS

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

2. Not applicable.

3(i). Not applicable.

3(ii). Not applicable.

4. The registrant agrees to furnish to the Commission upon request
copies of all instruments not filed herewith defining the rights
of holders of long-term debt of the registrant and its subsidiaries.

9. Not applicable.

10. Not applicable.

11. Not applicable.

12. Not applicable.

13. Annual Report to security holders (filed herewith).

16. Not applicable.

18. Not applicable.

21. Subsidiaries of the registrant (filed herewith).

22. Not applicable.

23. Not applicable.

24. Not applicable.

27. Financial Data Schedule (filed herewith)

99. Definitive Proxy Statement (filed herewith)

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

INSIDE FRONT COVER

BOARD OF DIRECTORS

Picture of Board of Directors

William D. Stewart, Chairman of Farmers National Banc Corp. and
of the Farmers National Bank of Canfield

Richard L. Calvin, Vice Chairman of Farmers National Banc Corp.
and of the Farmers National Bank of Canfield

Frank L. Paden, President and Secretary of Farmers National Banc
Corp.; President and Chief Executive Officer of the Farmers
National Bank of Canfield

Benjamin R. Brown, President - Castruction Co.

Joseph O. Lane, President - Lane Funeral Homes, Inc. and Lane
Life Corp.

David C. Myers, President - Myers Equipment Corp.

Edward A. Ort, President - Ort Furniture Manufacturing Co.

Ronald V. Wertz, President - Boyer Insurance Inc.

<TABLE>
HIGHLIGHTS OF 1996

Selected Financial Data (In Thousands except Per Share Data)

<CAPTION> Percent
For the Year 1996 1995 Change
<S> <C> <C> <C>
Net Income $4,131 $3,576 15.52%
Return on Average Assets 1.27% 1.20% 5.83%
Return on Average Equity 11.60% 11.45% 1.31%

Per Share
Net Income $1.22 $1.09 * 11.93%
Book Value 10.51 10.33 * 1.74%

Balances at Year-End
Assets $338,112 $314,229 7.60%
Securities 47,079 47,333 -0.54%
Net Loans 263,504 229,249 14.94%
Deposits 283,811 267,955 5.92%
Stockholders Equity 34,809 33,976 2.45%
Shares Outstanding 3,311 3,290 * 0.64%
Cash Dividends 1,455 1,268 14.75%

<FN>
* Adjusted to reflect weighted outstanding shares and adjusted for stock dividends and 2-for-1 stock split.
</FN>
</TABLE>

FORM 10-K

A copy of the Annual Report filed with the Securities and
Exchange Commission will be available on April 1, 1997
without charge upon written request to:

Mr. Carl D. Culp, Treasurer
Farmers National Banc Corp.
20 South Broad St. P.O. Box 555
Canfield, Ohio 44406

Mailing address and phone:
Farmers National Banc Corp.
20 South Broad St. P.O. Box 555
Canfield, Ohio 44406
Phone: (330) 533-3341

The Annual Meeting of the Shareholders of Farmers
National Banc Corp. will be held at Colonial Catering at
429 Lisbon St. Canfield, Ohio on Thursday, March 27,
1997 at 3:30 p.m.

TABLE OF CONTENTS

Highlights of 1996 1

Report to Stockholders 2-5

Officers 6

Description of Business 7

Selected Financial Data 8-11

Management's Discussion 12-19

Stock Prices and Dividends 20

Accountant's Report 21

Financial Data 22-36

PRESIDENT'S LETTER TO STOCKHOLDERS

Dear Shareholders:

The year 1996 is now a completed chapter in our 109 year
history, a year characterized by corporate-wide achievements and
individual milestones that light the way for our transition into
the coming century.

Farmers National Bank has a history of growth and success
no other locally owned bank can match. This past year marks the
fifteenth consecutive year that the Bank has been able to
increase both assets and net income over the previous year.
With great pleasure I share some of the highlights and
accomplishments of your company that were attained in 1996.

FINANCIAL PERFORMANCE

Net income for the year reached a record high of $4.13 million,
up 15.5 percent over 1995. Total assets for Farmers National
Banc Corp. at year-end were $338 million, an increase of 7.6
percent over year-end 1995.

The net income per share was $1.22 per share in 1996 as
compared to $1.09 per share in 1995. This represents an 11.9
percent increase. Cash dividends paid on Farmers National Banc
Corp. common stock were $.44 per share in 1996, representing a
10 percent increase over a year ago. These amounts have been
adjusted to reflect the recent two-for-one stock split that was
completed on January 17, 1997. In addition to the cash
dividends and stock split, the Corporation also paid
shareholders a 2% stock dividend in October 1996.

Equity, in the form of capital ratios, is a measure used in
defining safety within the banking industry. The $34.8 million
in Shareholder Equity gives the Corporation a 10.18 percent Tier
1 capital to average asset ratio -- well above regulatory
measures and near the top percentile in comparison to our peer
group of banks. Shareholder participation in the Corporation's
Dividend Reinvestment Plan continues to provide a source of
additional capital to the Corporation. During 1996,
shareholders reinvested cash dividends of $800,000 and made
additional cash contributions in the amount of $1.7 million,
totaling $2.5 million that was used to purchase shares of
common stock in Farmers National Banc Corp.

Picture of Bank Staff

The higher earnings and returns were a result of several
factors. Net interest income is the major factor that affects
net income. In 1996, net interest income, before provision for
loan losses, was $14.1 million as compared to $12.3 million in
1995. This 14 percent increase is a major reason for the
favorable results for 1996. Total loans increased to record
levels of $266.7 million at year-end 1996, a 15 percent increase
from 1995. Other factors attributing to our successful results
for 1996 include proper management of interest rate risks,
ongoing monitoring of asset quality, active capital management
and a tight control of overhead expenses.

You will note from the financial information outlined in this
report that Farmers National Banc Corp.'s operating and
performance measurements identify continuing positive trends.
Nineteen hundred and ninety-six was a financially successful
year as detailed in the accompanying review, analysis and
graphs. This review summarizes careful management of operating
fundamentals, size of our Corporation and shareholder return.

OPERATIONS

During 1996, we completed the second phase of a total upgrade
of data processing systems. This project included a new and
improved delivery system for customer information and the
implementation of a platform automation system for both loans
and new accounts. These new systems enable the bank to be more
efficient in delivering new products and services. Rapid
changes in technology continue to challenge all business
entities. We are committed to investigate and evaluate new and
ongoing technology so that we can better position our Bank for
the future and provide the services and products needed in the
financial service industry.

Rapid changes in technology continue to challenge all business
entities. We are committed to investigate and evaluate new and
ongoing technology so that we can better position our bank for
the future and provide the services needed in the financial
service industry.

In October 1996, Farmers National Bank negotiated to purchase
certain real estate and equipment located in Damascus, Ohio.
This site represents the tenth community banking office for
Farmers National Bank. This former bank office was remodeled
and opened for business on January 6, 1997. We are excited
about being a part of the Damascus community and look forward to
a long and rewarding relationship. This office is the third
branch bank that we have opened in the past twenty-four months.

Picture of branch located in Damascus, Ohio

Farmers National Bank will introduce "The Common Sense Card"
during the first quarter of 1997. This debit card product will
be made available to all depositors of Farmers National Bank and
is to be used as an alternative to writing a check. We have
chosen the VISA Check Card as our debit card affiliation because
of it's acceptance and recognition. Transactions originated
through the debit card will be processed similarly to a credit
card transaction with the only difference being that funds are
deducted from your checking account rather than a loan advance
on your credit card. "The Common Sense Card" will automate
transactions and offer the card holder additional features that
I encourage you to utilize.

Plans for 1997 also include the introduction of an automated
phone system that will let our customers inquire on their
accounts, transfer funds between accounts, make loan and utility
payments and get current information concerning interest rates
and bank products.

Other products and services under study or in the development
stage include home banking through your personal computer, check
imaging and the viability of offering the non-traditional bank
products -- alternative investment products, various types of
insurance, annuities, financial planning and trust services.

Another product that currently is near completion with plans to
introduce in 1997, is our own WEB SITE page on the Internet.
When all details are complete, you will be able to access
various information about the bank on the Internet -- our domain
name will be FNB-CANF.COM. Our long range plan is to provide
our customers access to the Internet through a server that will
be located in our bank.

Our management team is changing elements of operations to take
into account the fundamental changes in the banking industry,
including consolidation and the growing number of activities
that banks engage.

As part of our Mission Statement and 1997 Strategic Plan, "...
through the provisions of high quality, modern, progressive, and
a complete line of products and services, The Farmers National
Bank attempts to meet the financial needs of its customers. Our
corporate mission is to maximize shareholder value and to act as
the financial leader in the communities we serve as a locally
owned, independent community banking organization."

Picture of Bank Staff

Everyone associated with Farmers National Bank would agree that
1996 was a noteworthy year in the storied history of this
institution. As you recall, at the annual shareholder meeting
held on March 28, 1996, Mr. William D. Stewart announced
significant management changes that were to take place in 1996.
The major thrusts of his message were changes in the executive
and senior management positions of the bank. This management
succession plan had been in planning over two years ago. The
Board of Directors crafted the final chapter of this plan and
used 1996 as the "transition" year for this new management team
to be fully acclimated in their new positions by March 27, 1997,
the date for this year's annual shareholder meeting. We have
taken the opportunity to include various photos of this new
management team. This group of individuals is a very dedicated,
loyal group of individuals that are strongly committed to the
continued success of Farmers National Bank. This group has many
years of service with Farmers National Bank and each one of them
has had the opportunity to work under the leadership of Mr.
William D. Stewart and Mr. Richard L. Calvin. As planned in the
year of transition, Mr. Stewart and Mr. Calvin both provided
their expertise and knowledge to management as everyone moved
forward in their new roles during 1996.

Picture of William D. Stewart and Richard L. Calvin

Mr. William D. Stewart, Chairman of the Board and Mr. Richard
L. Calvin, Vice Chairman of the Board will officially step down
as Executive Officers of the Bank at the annual reorganization
meeting that will be held immediately following the Annual
Shareholder Meeting on March 27, 1997. Combined, these two
individuals have given Farmers National Bank a total of
sixty-four years of service.

Mr. Stewart started with the bank in 1967. He was elected to
the Board of Directors in 1971 and was appointed as President in
1972, replacing Asa I. Skelton. He served in that capacity until
1996 at which time he was named Chairman of the Board. His
vision and leadership guided Farmers National Bank through a
period of unprecedented growth and expansion. In 1972, Farmers'
total assets were $43 million and the bank had three offices.
Mr. Stewart's efforts over the next twenty-three years saw the
bank grow to ten community locations and assets in excess of
$330 million. Mr. Stewart's accomplishments can be best
recognized as evidenced by the strong community support that
Farmers National Bank has gained through his leadership.
Management, sound and safe business decisions, and his ability
to gain shareholder support and loyalty are achievements that
did not go unnoticed. Bill will continue to serve on the Board
of Directors.

Mr. Calvin was recently recognized for his thirty-five years of
service to Farmers National Bank. He started with the bank in
1961 and held an officer title until being appointed as
Executive Vice President in 1972 and was elected as a Director
in 1975. Mr. Calvin was very instrumental in the development of
the bank's branch network. The Austintown Office was opened in
1959 with Mr. Calvin serving as Manager of that office from 1961
to 1975, at which time he moved to the Main Office in Canfield.
In his role as the chief operating officer, Richard guided the
development of the bank as a single back-office system into a
more efficient operating entity able to meet the regulatory
requirements for the banking industry. Richard, too, will
continue to serve as a Director.

On a personal note, I want to express my sincere appreciation
to both of these gentlemen. They have instilled a sense of
pride and honor to all of us working for Farmers National Bank.
Their efforts, loyalty and leadership are characteristics that
will be used to help guide your Corporation in the twenty-first
century. Thanks for a job well done. We wish a long and
healthy retirement for both Bill & Wilma and Richard & Corrine,
as they enjoy time with their children and grandchildren.

In closing, I would like to offer special thanks to our
shareholders, directors, officers, employees and customers for
their loyal patronage of our services and steadfast commitment
to our bank. We are extremely confident as we prepare for the
twenty-first century, and we welcome you to be a part of it.

Sincerely,

Frank L. Paden
President & CEO

OFFICERS

Officers - Farmers National Banc Corp.

William D. Stewart Richard L. Calvin Frank L. Paden
Chairman Vice Chairman President and Secretary

Carl D. Culp Donald F. Lukas Adrianne R. Kempers
Executive Vice President Senior Vice President Auditor
& Treasurer

Farmers National Bank of Canfield
Officers & Management

Frank L. Paden Andrew A. Baird
President & CEO Assistant Cashier,
Manager - Data Center

Carl D. Culp Daniel G. Cerroni
Executive Vice President, Assistant Cashier
Cashier & CFO Main Office Loan Department

Donald F. Lukas Joseph E. Chapman
Senior Vice President, Assistant Cashier,
Bank Systems Manager - Collection Department

Adrianne R. Kempers Merle C. Garritano
Auditor Assistant Cashier/Consumer Loans

Mark L. Graham Diane Moran
Vice President/Loan Administrator Mortgage Loan Department

Anthony F. Peluso Janine M. Cox
Vice President/Human Resources Credit Administration

Alfred F. Ridel Joanie Orr
Vice President/Consumer Loans General Ledger Accounting Officer

Charles L. Burgoyne Phyllis A. Welton
Assistant Vice President, Assistant Cashier,
Loan Review & Compliance Manager - Bookkeeping Dept.

Bradley S. Henderson Gary J. Rosati
Assistant Vice President, Staff Legal Counsel
Branch Administration & Security

Roy A. Jackson Dorothy J. Weeden
Assistant Vice President, Assistant Cashier,
Indirect Lending Manager - Main Office

Barbara C. Fisher Pamela J. Cleghorn
Assistant Vice President, Manager, Colonial Plaza
Marketing & Deposit Operations

Susan E. Miller Keith A. Leonard
Assistant Vice President, Assistant Cashier
Corporate Services Administration Manager - Austintown Office

Patricia C. Rosko Greg V. Walla
Asst. Manager, Austintown Office Asst. Manager, Salem Office

Geraldine J. Gbur Jane C. Logan
Assistant Cashier, Asst. Manager, Columbiana Office
Manager - Columbiana Office

Kay A. Hedl Lynnita J. Kaschak
Manager, Leetonia Office Asst. Manager, Leetonia

Michele M. Ossoff Dennis S. Vitt
Manager, Damascus Office Assistant Cashier,
Manager - Lake Milton Office

Jennifer C.Tikkanen Robert L. Rozeski
Asst. Manager, Lake Milton Office Manager, Cornersburg Office

Barbara L. Sitler Larry A. Staub
Asst. Manager, Cornersburg Assistant Cashier,
Manager - Western Reserve Office

Claire F. Baldwin Larry E. White
Asst. Manager, Assistant Vice President,
Western Reserve Office Manager - Salem Office

Brief Description of Business

Farmers National Banc Corp.

Farmers National Banc Corp. (the "Corporation") is a
one-bank holding company formed under the Bank Holding Company
Act of 1956, as amended, operating under regulations of the
Board of Governors of the Federal Reserve System. Its principal
subsidiary is The Farmers National Bank of Canfield, which was
acquired March 31, 1983. Presently the Corporation and its
subsidiary operate in one industry, domestic banking.

The Corporation conducts no business activities except
for investment in securities permitted under the Bank Holding
Company Act. The Board of Directors of the Corporation and the
Bank are identical. The officers of the Corporation are William
D. Stewart, Chairman, Richard L. Calvin, Vice Chairman, Frank L.
Paden, President and Secretary, Carl D. Culp, Executive Vice
President and Treasurer, Donald F. Lukas, Senior Vice
President, and Adrianne R. Kempers, Auditor.

Bank holding companies are permitted under Regulation Y
of the Board of Governors of the Federal Reserve System to
engage in other activities considered closely related to banking
such as leasing and mortgage banking. The Corporation has no
other subsidiaries engaged in such activities at this time.

The Farmers National Bank of Canfield

The Bank is a full service national bank engaged in
commercial and retail banking with the exception of trust
services. The Bank's commercial banking services include
checking accounts, savings accounts, time deposit accounts,
commercial, mortgage and installment loans, night depository,
automatic teller machines, safe deposit boxes, money order
services, travelers checks, government bond sales, food stamp
redemption, utility bill payments, MasterCard and Visa Credit
Cards, and other miscellaneous services normally offered by
commercial banks. In addition, the Bank offers discount
brokerage service through a correspondent bank.

The Bank's main office is located at 20 South Broad Street,
Canfield, Ohio. Business is conducted at a total of ten (10)
offices located in the counties of Mahoning and Columbiana in
Ohio. As a national banking association, the Bank is a member
of the Federal Reserve System, subject to supervision and
regulation of the Comptroller of the Currency and its deposits
are insured by the Federal Deposit Insurance Corporation to the
extent provided by law. The Bank is affected also by the
monetary and fiscal policies of the United States and of various
regulatory agencies.

The Bank competes with state and national banks located in
Mahoning and Columbiana counties.

The Bank also competes with a large number of other
financial institutions, such as savings and loan associations,
insurance companies, consumer finance companies, credit unions
and commercial finance and leasing companies, for deposits,
loans and service business. Money market mutual funds,
brokerage houses and similar institutions provide, in a
relatively unregulated environment, many of the financial
services offered by the Bank. In the opinion of management, the
principal methods of competition are the rates of interest
charged for loans, the rates of interest paid for funds, the
fees charged for services and the availability of services.

As of December 31, 1996, the Corporation and its
subsidiary had 178 employees. The bank considers its relations
with its employees to be satisfactory.

Picture of Exterior of Main Office

GRAPHS AND CHARTS

Line Graph Depicting Total Deposits in Thousands

Year Amount

1992 $231,671

1993 $240,440

1994 $244,302

1995 $267,955

1996 $283,811

Line Graph Depicting Total Assets in Thousands

Year Amount

1992 $265,440

1993 $275,385

1994 $284,445

1995 $314,229

1996 $338,112

Line Graph Depicting Return on Average Assets

Year Rate

1992 1.10%

1993 1.16%

1994 1.22%

1995 1.20%

1996 1.27%

Line Graph Depicting Net Income in Thousands

Year Amount

1992 $2,825

1993 $3,160

1994 $3,424

1995 $3,576

1996 $4,131

Line Graph Depicting Net Loans in Thousands

Year Amount

1992 $189,813

1993 $200,993

1994 $214,988

1995 $229,249

1996 $263,504

Line Graph Depicting Net Income Per Share

Year Rate

1992 $0.97

1993 $1.04

1994 $1.09

1995 $1.09

1996 $1.22

Line Graph Depicting Efficiency Ratio

Year Rate

1992 56.62%

1993 58.98%

1994 59.66%

1995 59.63%

1996 56.50%

Line Graph Depicting Total Stockholders Equity in Thousands

Year Amount

1992 $22,698

1993 $25,996

1994 $28,915

1995 $33,976

1996 $34,809

<TABLE>
SELECTED FINANCIAL DATA

(In Thousands except Per Share Data)
<CAPTION>
For the years Ending 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Summary of Earnings
Total Interest Income (including fees on loans) $24,877 $21,961 $19,731 $20,166 $21,464
Total Interest Expense 10,756 9,688 8,000 8,738 10,273
Net Interest Income 14,121 12,273 11,731 11,428 11,191
Provision for Credit Losses 655 270 330 620 1,310
Total Other Income 1,478 1,342 1,357 1,298 1,270
Total Other Expense 8,883 8,119 7,755 7,473 7,013
Income Before Federal Income Taxes 6,061 5,226 5,003 4,633 4,138
Federal Income Taxes 1,930 1,650 1,579 1,473 1,313
NET INCOME 4,131 3,576 3,424 3,160 2,825

Per Share Data (Note)
Net Income 1.22 1.09 1.09 1.04 0.97
Cash Dividends Paid 0.44 0.40 0.40 0.38 0.36
Book Value at Year-End 10.51 10.33 9.29 8.90 8.22

Balances at Year-End
Total Assets 338,112 314,229 284,445 275,385 265,440
Earning Assets 319,449 294,122 268,724 260,965 248,484
Total Deposits 283,811 267,955 244,302 240,440 231,671
Net Loans 263,504 229,249 214,988 200,993 189,813
Total Stockholder's Equity 34,809 33,976 28,915 25,996 22,698

Average Balances
Total Assets 325,537 297,159 279,839 273,257 256,160
Total Stockholder's Equity 35,629 31,177 27,221 24,557 21,390

Significant Ratios
Return on Average Assets (ROA) 1.27% 1.20% 1.22% 1.16% 1.10%
Return on Average Equity (ROE) 11.60 11.45 12.58 12.85 13.12
Average Earning Assets/Average Assets 94.88 94.75 94.91 94.55 94.24
Net Loans/Deposits 92.85 85.56 88.00 83.59 81.93
Allowance for Credit Losses/Total Loans 1.20 1.25 1.26 1.29 1.18
Allowance for Credit Losses/Nonperforming Loans 152.42 192.87 154.63 97.35 84.69
Efficiency Ratio 56.50 59.63 59.66 58.98 56.62
Cash Dividends as a Percentage of Net Income 35.22 35.46 34.45 33.41 32.83

<FN>
Note: Per share data is based on weighted average shares outstanding adjusted for stock dividends and 2-for-1 stock split.
</FN>
</TABLE>

<TABLE>
SELECTED FINANCIAL DATA
Average Balance Sheets and Related Yields and Rates
(In Thousands of Dollars)
<CAPTION>
Years ended December 31, 1996 1995 1994

EARNING ASSETS

AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans $250,616 $21,519 8.59% $221,955 $18,580 8.37% $210,148 $16,911 8.05%
Taxable securities 40,334 2,352 5.83 39,167 2,183 5.57 42,352 2,162 5.10
Tax-exempt securities 7,434 683 9.19 7,266 670 9.22 7,364 651 8.84
Federal funds sold 10,506 562 5.35 13,181 761 5.77 5,721 234 4.09
Total earning assets 308,890 25,116 8.13 281,569 22,194 7.88 265,585 19,958 7.51

NONEARNING ASSETS

Cash and due from banks 11,310 11,437 10,610
Premises and equipment 5,597 4,671 4,165
Allowance for Loan Losses (2,946) (2,897) (2,745)
Other assets 2,686 2,379 2,224
Total Assets $325,537 $297,159 $279,839

INTEREST-BEARING LIABILITIES

Time deposits $122,973 $7,095 5.77% $108,626 $6,205 5.71% $90,750 $4,298 4.74%
Savings deposits 76,182 1,931 2.53 74,752 1,986 2.66 80,969 2,256 2.79
Demand deposits 51,890 1,092 2.10 48,267 1,009 2.09 49,280 1,141 2.32
Repurchase agreements 12,075 497 4.12 10,032 440 4.39 8,832 289 3.27
Borrowings 2,651 142 5.36 804 48 5.97 551 16 2.90
Total Interest-Bearing Liabilities 265,771 10,757 4.05 242,481 9,688 4.00 230,382 8,000 3.47

NONINTEREST-BEARING LIABILITIES

Demand deposits 22,979 20,631 21,224
Other Liabilities 1,158 2,870 1,012
Stockholder's equity 35,629 31,177 27,221
Total Liabilities and
Stockholders' Equity $325,537 $297,159 $279,839

Net interest income $14,359 $12,506 $11,958
Net interest income to earning assets 4.65% 4.44% 4.50%

<FN>
Fully taxable equivalent basis computed at 35% in 1996, 1995 and 1994.
</FN>
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Results of Operations

The Corporation's net income totaled $4,131,415 during 1996, an
increase of 15.52% from $3,576,229 for 1995. On a per share
basis, net income was $1.22 for 1996 as compared to $1.09 for
1995 and 1994. Common comparative ratios for results of
operations include the return on average assets and return on
average stockholders equity. For 1996, the return on average
equity was 11.60% as compared to 11.45% for 1995 and 12.58% for
1994. The return on average assets was 1.27% for 1996 as
compared to 1.20% and 1.22% for 1995 and 1994, respectively.

These results of operations are the direct result of
management's concerted efforts to control expenses and increase
interest from our interest bearing assets. Overall growth in
deposits and the use of those funds in the loan portfolio,
particularly installment and mortgage loans, together with
control over the bank's general expenses have produced these
results.

Net Interest Income

Net interest income, the principal source of the Corporation's
earnings, represents the difference between interest income on
interest-earning assets and interest expense on interest-bearing
liabilities. For 1996, net interest income increased $1,848,000
or 15.06% over 1995. The increase for 1995 was $542,000 or
4.62% over 1994. Interest-earning assets averaged $308,890,000
during 1996 representing a 9.70% increase over 1995, while 1995
averaged $281,569,000 or a 6.02% increase over 1994.

The Corporation 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.

The profit margin, or spread, on invested funds is a key
performance measure. The Corporation 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 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 1996 the net interest margin,
measured on a fully taxable equivalent basis, totaled 4.65% in
comparison to 4.44% and 4.50% for 1995 and 1994, respectively.
The increase in net interest income margin in 1996 was due in
part to the increase in the interest rate environment and
increased loan demand.

Total interest income was $24,877,000 for 1996 as compared to
$21,961,000 and $19,731,000 for 1995 and 1994, respectively.
The 13.3% increase in interest income is largely attributed to a
14.94% increase in net loans and an increase in the interest
rate earned from 8.37% to 8.59%. Net loans were $263,504,000 at
year-end 1996 as compared to $229,249,000 at year-end 1995.

Total interest expense amounted to $10,757,000 for 1996,
representing an 11.03% increase from 1995 while interest expense
of $9,688,000 for 1995 represents a 21.10% decrease from 1994.
The increase in interest expense is primarily due to an increase
in the level of time deposits and the average rate paid on these
deposits. The average balances for time deposits increased by
13.2% over 1995 while the interest rate paid on those deposits
increased by 6 basis points.

Return on Equity and Assets

Information for the years indicated as follows: 1996 1995 1994

Net income to average total assets 1.27% 1.20% 1.22%
Net income to average equity 11.60% 11.45% 12.58%
Dividends per share to net income per share 36.07% 36.04% 34.96%
Average equity to average total assets 10.94% 10.49% 9.73%

Other Income

Other income increased $136,000 or 10.11% from 1995. Total
other income for 1995 decreased $15,000 or 1.11% from 1994. The
increase in other income is a result of increased levels of
service charges and fees related to deposit accounts.
Management continues to explore new products and services that
could increase other income in future years.

Other Expenses

Total other expenses for 1996 increased 9.41% over 1995 as
compared to an increase of 4.69% from 1995 over 1994. The rise
in other expenses is primarily due to salary and employee
benefits, which increased 15.78% from 1995. This increase is
the result of hiring additional employees to staff the new
branch offices. At December 31, 1996, the bank employed 170
full time equivalent employees compared to 154 in 1995. State
and local taxes also increased 17.05% from 1995. Management
will continue to closely monitor and keep the increases in other
expenses to a minimum.

Income Taxes

Federal income taxes are computed using the appropriate
effective tax rates for each period. The effective tax rates
are less than the statutory tax rate primarily due to nontaxable
interest and dividend income. The effective federal income tax
rate was 32% for the periods ending 1996, 1995 and 1994.

Asset/Liability Management

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 Corporation, 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. Although the Corporation does not
match each of its interest sensitive assets against specific
interest sensitive liabilities, it does monitor total assets and
liabilities to determine the overall interest rate position over
various time frames.

As of year-end 1996, the Corporation had a negative gap at
both three month and twelve month time periods. This liability
sensitive position typically produces a favorable contribution
to earnings during a period of decreasing rates. Although in
general rates may rise, the Corporation has the capacity to take
steps to minimize the negative effect of such movement.

With the largest amount of interest sensitive assets and
liabilities maturing within twelve months, the Corporation
monitors this area most closely. The Corporation does not
emphasize interest sensitivity analysis beyond this time frame
because it believes various unpredictable factors could result
in erroneous interpretations. Early withdrawal of deposits,
prepayments of loans and loan delinquencies are some of the
factors that could have such an effect. In addition, changes in
rates on interest sensitive assets and liabilities may not be
equal, which could result in a change in net margin.

<TABLE>
Interest Rate Sensitivity
<CAPTION>
(In Thousands of Dollars)
December 31, 1996 December 31, 1995 December 31, 1994
Total Within Total Within Total Within
3 month 12 month 3 month 12 month 3 month 12 month
<S> <C> <C> <C> <C> <C> <C>
Total Interest-Sensitive Assets $36,137 $105,161 $44,064 $100,658 $36,940 $96,137
Total Interest-Sensitive Liabilities 56,249 112,027 55,706 103,701 53,912 77,970
Total Sensitivity Gap (20,112) (6,866) (11,642) (3,043) (16,972) 18,167
Ratio of Interest-Sensitive Assets to
Interest-Sensitive Liabilities 0.64 0.94 0.79 0.97 0.69 1.23
</TABLE>

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.

Liquidity

The Corporation maintains, in the opinion of management,
liquidity sufficient to satisfy depositors' requirements and
meet the credit needs of customers. The Corporation depends on
its ability to maintain its market share of deposits as well as
acquiring new funds. The Corporation's ability to attract
deposits and borrow funds depends in large measure on its
profitability, capitalization and overall financial condition.

Principal sources of liquidity for the Corporation 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, the Corporation 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, 1996, the
Corporation 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 Corporation also has additional borrowing capacity
with the Federal Home Loan Bank of Cincinnati, as well as access
to the Federal Reserve Discount Window, which provides an
additional source of funds. Advances outstanding from the
Federal Home Loan Bank at December 31, 1996 amounted to
$1,400,000.

Cash flows generated from operating activities increased
19.48% to $6,289,000 in 1996 compared to $5,263,000 in 1995.
This increase is a result of an increase in total interest
received, as explained in the Net Interest Income section of
this report. Cash flows used in investing activities increased
128% to $35,715,000 in 1996 compared to $15,681,000 in 1995.
This is a result of increased loan demand, as net loans
increased 14.9%. Cash flows provided from financing activities
amount to $18,999,000 as compared to $25,305,000 in 1995. This
drop is a result of a smaller increase in time deposits during
1996 compared to the activity in 1995.

<TABLE>
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:
<CAPTION>
(In Thousands of Dollars)
Years Ended December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, Financial and
Agricultural $26,481 9.9% $22,677 9.7% $24,477 11.2% $24,373 11.9% $24,572 12.8%
Real Estate-Mortgage 104,389 39.2 98,678 42.5 92,773 42.6 81,726 40.1 73,043 38.0
Installment Loans to
Individuals 135,832 50.9 110,805 47.8 100,484 46.2 97,515 48.0 94,432 49.2
Lease Financing 0 0.0 0 0.0 0 0.0 0 0.0 41 0.0
266,702 100.0 232,160 100.0 217,734 100.0 203,614 100.0 192,088 100.0
Less Unearned Income 0 0 0 0 1
Total Loans $266,702 100.0% $232,160 100.0% $217,734 100.0% $203,614 100.0% $192,087 100.0%

</TABLE>

The following schedule sets forth maturities based on remaining scheduled
repayments of principal for various categories of loans listed above as of
December 31, 1996:

(In Thousands of Dollars)
Types of Loans 1 Year or less 1 to 5 Years Over 5 years
Commercial, Financial and
Agricultural $7,143 $2,399 $16,939

The amounts of commerical, financial and agricultural loans as of December 31,
1996, based on remaining scheduled repayments of principal, are shown in the
following table:

(In Thousands of Dollars)
Loan Sensitivities 1 Year or less Over 1 year Total
Floating or Adjustable Rates
of Interest $5,464 $1,740 $7,204
Fixed Rates of Interest 1,679 17,598 19,277
Total Loans $7,143 $19,338 $26,481

Loan Portfolio

Outstanding loans increased $34,542,000 or 15% in 1996. Most
of this growth occurred in the installment loan portfolio,
which increased from $110,805,000 in 1995 to $135,832,000 in
1996. Real estate mortgage loans also increased from
$98,678,000 in 1995 to $104,389,000 in 1996 which represents a
6% increase over the past year.

The bank's consumer loan portfolio represents approximately 51%
of the banks total loans outstanding. These loans, which
consist of automobile loans, home improvement loan, home equity
lines of credit and credit card plans reported a 23% growth in
1996. Consumers continue to take advantage of the low interest
rate environment with loans to purchase new automobiles and make
capital improvements to their homes.

The commercial loan balances outstanding have remained
relatively stable over the past few years. All commercial loans
are made to local small businesses for various purposes such as
equipment purchases, capital improvements, the purchase of
inventory or general working capital needs. This portfolio of
$26,481,000 is primarily variable rate loans that play an
important role in the banks monitoring of rate sensitive assets.

<TABLE>
Summary of Loan Loss Experience

The following is an analysis of the allowance for loan and lease losses for the periods indicated:
<CAPTION>
(In Thousands of Dollars)
Years Ended December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $2,911 $2,746 $2,621 $2,274 $1,630
Loan Losses:
Commercial, Financial and Agricultural (75) (1) (185) (69) (411)
Real Estate-Mortgage (22) 0 0 (16) (63)
Installment Loans to Individuals (455) (275) (202) (351) (332)
Total Loan Losses (552) (276) (387) (436) (806)
Recoveries on Previous Loan Losses:
Commercial, Financial and Agricultural 9 44 39 36 36
Real Estate-Mortgage 15 0 0 7 0
Installment Loans to Individuals 160 127 143 120 104
Total Recoveries 184 171 182 163 140
Net Loan Losses (368) (105) (205) (273) (666)
Provision Charged to Operations (1) 655 270 330 620 1,310
Balance at End of Year $3,198 $2,911 $2,746 $2,621 $2,274
Ratio of Net Loan and Lease Losses to Average
Net Loans and Leases Outstanding 0.15% 0.05% 0.10% 0.14% 0.36%

<FN>
(1) The provisions for possible credit 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 credit loss experience, the status of past due interest
and principal payments, the quality of financial information
supplied by loan customers and the general condition of the
industries in the community to which loans have been made.
</FN>
</TABLE>

Provisions charged to operations increased from $270,000 in
1995 to $655,000 in 1996. The balance in the allowance for
credit losses has increased substantially since 1992 to
$3,198,000 or 1.20% of loans at December 31,1996. The
substantial increase in provision charged to operations was a
result of the 15% growth in loans during 1996.

The allowance for possible loan and lease losses has been
allocated according to the amount deemed to be reasonably
necessary to provide for the possibility of losses being
incurred within the following categories of loans as of the
dates indicated:

<TABLE>
<CAPTION>
(In Thousands of Dollars)
December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Commercial, Financial and Agricultural $1,873 $1,800 $1,700 $1,692 $1,599
Real Estate-Mortgage 263 250 200 170 75
Installment Loans to Individuals 1,062 861 846 759 600
$3,198 $2,911 $2,746 $2,621 $2,274

<FN>
The allocation of the allowance as shown in the table above
should not be interpreted as an indication that charge-offs in
1997 will occur in the same proportions or that the allocation
indicates future charge-off trends. Furthermore, the portion
allocated to each loan category is not the total amount
available for future losses that might occur within such
categories since the total allowance is a general allowance
applicable to the entire portfolio.
</FN>
</TABLE>

Loan Commitments and Lines of Credit

In the normal course of business, the banking subsidiary 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. An
annual fee of two percent is charged for the issuance of a
letter of credit.

<TABLE>
Risk Elements

The following table sets forth aggregate loans in each of the following categories for the years indicated:
<CAPTION>
(In Thousands of Dollars)
December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Loans Accounted For on a Nonaccrual Basis $0 $125 $302 $349 $453
Loans Contractually Past Due 90 Days or More as to Interest
or Principal Payments (Not Included in Nonaccrual Loans Above) 2,098 1,384 1,475 2,343 2,232
Loans Considered Troubled Debt Restructuring
(Not Included in Nonaccrual Loans or Contractually Past Due Above) 0 75 0 108 0

<FN>
Management is not aware of any loans not included in the
table above where serious doubt exists as to the ability of the
borrower to comply with the current loan repayment terms.
</FN>
</TABLE>

Non-accrual loans are loans which are 90 days past due and
with respect to which, in Management's opinion, collection of
interest is doubtful. These loans no longer accrue interest
and are accounted for on a cash basis. Loans which are 90 days
or more past due but continue to accrue interest are loans
which, in Management's opinion, are well secured and are in the
process of collection.

As of December 31, 1996, there were no concentrations of
loans exceeding 25% of total loans which are not disclosed as a
category of loans. As of that date also, there were no other
interest-earning assets that are either nonaccrual, past due or
restructured.

The following shows the amounts of contracted interest income
and interest income reflected in income on loans accounted for
on a nonaccrual basis and loans considered troubled debt
restructuring for the periods indicated:

<TABLE>
<CAPTION>
(In Thousands of Dollars)
December 31, 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Gross Interest Income That Would have been Recorded if the Loans
had been Current in Accordance with Their Original Terms $0 $5 $21 $40 $51
Interest Income Included in Income on the Loans 0 0 0 0 0
</TABLE>

Investment Securities

The investment securities portfolio decreased slightly during
1996. Our objective in managing the investment portfolio is to
preserve and enhance corporate liquidity through investment in
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 following table shows the book value of investment
securities by type of obligation at the dates indicated:

<TABLE>
<CAPTION>
Type (In Thousands of Dollars)

December 31, 1996 1995 1994
<S> <C> <C> <C>
U.S. Treasury Securities and Government Agencies $31,449 $31,692 $29,887
Obligations of States and Political Subdivisons 7,501 6,943 8,013
Other Securities 8,130 8,698 10,106
$47,080 $47,333 $48,006
</TABLE>

A summary of securities held at December 31, 1996, classified according to
maturity and including weighted average yield for each range of maturities
is set forth below:

<TABLE>
<CAPTION>
(In Thousands of Dollars)
Type and Maturity Grouping December 31, 1996
Weighted
Book Average
Value Yield (1)
<S> <C> <C>
U.S. Treasury and U.S. Government Agency Securities:
Maturing Within One Year $10,079 5.41%
Maturing After One Year But Within Five Years 18,690 5.92%
Maturing After Five Years But Within Ten Years 0 0.00%
Maturing After Ten Years 2,680 6.47%
Total U.S. Treasury and U.S. Government Agency Securities: $31,449 5.80%

Obligations of States and Political Subdivisions
Maturing Within One Year $796 7.81%
Maturing After One Year But Within Five Years 1,070 8.22%
Maturing After Five Years But Within Ten Years 2,884 8.94%
Maturing After Ten Years 2,751 8.96%
Total Obligations of States and Political Subdivisions $7,501 8.73%

Other Securities
Maturing Within One Year $2,621 6.54%
Maturing After One Year But Within Five Years 5,509 6.41%
Maturing After Five Years But Within Ten Years 0 0.00%
Maturing After Ten Years 0 0.00%
Total Other Securities $8,130 6.46%

<FN>
(1) The weighted average yield has been computed by
dividing the total 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 statutory tax rate of 34% were $21,142, $29,919, $87,652
and $83,803 for the four ranges of maturities.
</FN>
</TABLE>

Deposits

Deposits represent the Corporation's principal source of
funds. The deposit base consists of demand deposits, savings
and money market accounts and other time deposits.

Average Deposits
<TABLE>
The following table shows the classification of average deposits for
the periods indicated:
<CAPTION>
(In Thousands of Dollars)
Average Balances on December 31, 1996 1995 1994
<S> <C> <C> <C>
Noninterest-Bearing Demand Deposits $22,979 $20,631 $21,227
Interest-Bearing Demand Deposits 51,890 48,267 49,281
Savings Deposits 76,182 74,752 80,969
Time Deposits 122,973 108,626 90,750
Total Average Deposits $274,024 $252,276 $242,227
</TABLE>

<TABLE>
The following shows the average rate paid on the following deposit
categories for the periods indicated:
<CAPTION>
Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
Interest-Bearing Demand Deposits 2.10% 2.09% 2.32%
Savings 2.53% 2.66% 2.79%
Time Deposits 5.77% 5.71% 4.74%
</TABLE>

A summary of time deposits of $100,000 or more as of December 31, 1996 by
maturity range is shown below:

(In Thousands of Dollars)
3 Months or Less Remaining Until Maturity $5,221
3 to 6 Months Remaining Until Maturity 3,738
6 to 12 Months Remaining Until Maturity 2,606
Over 12 Months Remaining Until Maturity 10,864
Total Outstanding $22,429

The steady increase in total deposits over the years reflects managements'
efforts to continue to insure the growth of the bank and to maintain a viable
banking institution. During 1996, the bank has attracted deposits due to its
effort to remain competitive in the local community as to rates paid for all
types of deposits particularly in the time deposit area. The bank has been
at or near the top in interest rates paid to depositors throughout 1996.

Capital Resources

The capital management function is a continuous process which
consists of providing capital for both the current financial
position and the anticipated future growth of the Corporation.
Important to this process is internal equity generation,
particularly through earnings retention. Internal capital
generation is measured as the percent of return on equity
multiplied by the percent of earnings retained. The return on
average equity was 11.60%, 11.45% and 12.58% for 1996, 1995 and
1994, respectively. Total cash dividends declared in 1996
represented 35.22% of net income as compared to 35.46% in 1995
and 34.45% in 1994. The resulting internal equity growth
percentage amounted to 7.51% in 1996 as compared to 7.39% in
1995 and 8.25% in 1994.

The bank subsidiary, as a national bank, is subject to the
dividend restrictions set forth by the Comptroller of the
Currency. The Comptroller of the Currency 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). As of December 31,1996, the bank
subsidiary had $2,710,723 of retained earnings available for
distribution and $11,203,930 not available for distribution to
the company as dividends without prior approval of the
Comptroller of the Currency. The bank subsidiary is also
required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by the banking regulators. At
December 31, 1996, the bank subsidiary is required to have a
minimum Tier 1 and Total Capital ratios of 4.00% and 8.00%,
respectively. The bank subsidiary's actual Tier 1 and Total
Capital ratios at that date were 14.09% and 15.34% respectively.
The bank subsidiary's leverage ratio at December 31, 1996 was
10.18%.

Audit

The Company's internal auditor, who is responsible to the
Audit Committee of the Board of Directors, reviews the results
and performance of operating units within the Company for
adequacy, effectiveness and reliability of accounting and
reporting systems, as well as managerial and operating controls.

The Audit Committee consists of four nonemployee directors
whose duties include: consideration of the adequacy of the
internal controls of the Company and the objectivity of
financial reporting; inquiry into the number, extent, adequacy
and validity of regular and special audits conducted by
independent public accountants and the internal auditors; the
recommendation to the Board of Directors of independent
accountants to conduct the normal annual audit and special
purpose audits as may be required; and reporting to the Board of
Directors the Committee's findings and any recommendation for
changes in scope, methods or procedures of the auditing
functions. The Audit Committee held four meetings during 1996.

Compliance

There are many activities in today's banking that are subject
to compliance regulations. The bank's policies and procedures
govern the way departments function and ensure fair, consistent
and sound banking practices. When those policies and procedures
are affected by new regulations, or regulation changes, the
Compliance Department is responsible to change those policies
involved, and is responsible to inform and train personnel. For
example, many of the forms used in opening deposit accounts and
loan accounts must subscribe to standards of format that are
designed to protect and to inform the customer.

Compliance is an ongoing effort that requires continuous
training. New regulations are introduced, changes to existing
regulations are made, employees change positions, and new
employees are hired. Assessment is made for the training needs
of the bank and then clearly communicated to all appropriate
bank employees through training programs. Quite often, two to
three sessions are required to reach all persons who need
training due to conflicting schedules.

From training, compliance objectives follow to monitoring or
testing procedures. Monitoring can focus on a broad range of
compliance issues and procedures, or it can be applied to
limited areas. Often, the extent of monitoring relates to the
complexity or length of the regulation. Upon the completion of
monitoring projects, areas where training is needed may be
revealed. The cycle of training, to monitoring, to training is
ever continuing.

It is our bank's mission to keep our employees well informed.
We urge them to ask questions and to use initiative in becoming
informed, as compliance regulations have become very complex.
This all translates in efficient and better service for our
customers.

Information as to Stock Prices and Dividends

The common stock of the Corporation is traded mostly through a
local brokerage firm and some private sales. Set forth in the
accompanying table are per share prices at which common stock of
the Corporation has actually been purchased and sold in
transactions during the periods indicated, to the knowledge of
the corporation. Also included in the table are dividends per
share paid on the outstanding common stock and any stock
dividends paid. As of December 31, 1996, there were 1,704
shareholders of record of common stock.

Market and Dividend Summary

Dividend Date High Low Dividend

March 1995 $32.00 $31.00 $0.20

June 1995 34.25 32.00 0.20

September 1995 36.50 34.25 0.20

October 1995 2% Stock Dividend

December 1995 39.50 36.50 0.20

March 1996 40.00 39.50 0.20

June 1996 42.25 40.00 0.22

September 1996 44.50 42.25 0.22

October 1996 2% Stock Dividend

December 1996 46.25 44.50 0.24

December 1996 2-for-1 Stock Split

Line Graph Depicting Market Value and Book Value of Common Stock

Market Book
Value Value
Year

1992 $8.00 $8.22

1993 $10.50 $8.90

1994 $14.75 $9.29

1995 $19.70 $10.33

1996 $23.13 $10.51

NOTE: Per share data is adjusted to reflect a 2:1 stock split in 1996
and 1994.

INDEPENDENT AUDITOR'S REPORT

Hill, Barth & King, Inc.
Certified Public Accountants
Park Place South, Suite 200
155 South Park Avenue
Warren, Ohio 44481
Telephone (330) 394-3773
FAX (330) 395-3713

January 23, 1997

Board of Directors
Farmers National Banc Corp.
Canfield, Ohio

Independent Auditors' Report

We have audited the accompanying consolidated balance
sheets of Farmers National Banc Corp. and subsidiary as of
December 31, 1996 and 1995 and the related consolidated
statements of income, stockholders equity and cash flows for
each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the
company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of Farmers National Banc Corp.
and subsidiary as of December 31, 1996 and 1995 and the
consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted
accounting principles.

Hill, Barth & King, Inc.
Certified Public Accountants

<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, 1996 1995

ASSETS
<S> <C> <C>
Cash & due from banks $13,302,154 $14,766,117
Federal funds sold 5,667,000 14,630,000
TOTAL CASH AND CASH EQUIVALENTS 18,969,154 29,396,117

Securities available for sale - NOTE B 45,611,788 46,479,885
Other securities 1,467,650 852,900

Loans - NOTE C 266,702,323 232,159,670
Less allowance for credit losses - NOTE D 3,197,889 2,910,838
NET LOANS 263,504,434 229,248,832

Premises and equipment, net - NOTE E 5,697,598 5,563,232
Other assets 2,861,617 2,687,806
$338,112,241 $314,228,772

LIABILITIES AND STOCKHOLDERS EQUITY
Deposits (all domestic):
Noninterest-bearing $23,468,432 $23,586,312
Interest-bearing - NOTE F 260,342,434 244,368,461
TOTAL DEPOSITS 283,810,866 267,954,773

Short-term borrowings:
U. S. Treasury interest-bearing demand note 622,129 748,470
Securities sold under repurchase agreements - NOTE G 15,748,622 9,847,119
Federal Home Loan Bank advances 1,400,000 0
TOTAL SHORT-TERM BORROWINGS 17,770,751 10,595,589

Other liabilities and deferred credits 1,721,635 1,702,145
TOTAL LIABILITIES 303,303,252 280,252,507

Commitments and contingent liabilities - NOTE H
Stockholders Equity - NOTES I, J:
Common Stock - no par value in 1996 and $2.50 par
value per share in 1995; authorized 5,000,000
shares in 1996 and 2,400,000 in 1995; issued
and outstanding 3,311,268 in 1996 and
1,644,559 in 1995. 24,253,806 4,111,398
Additional paid-in capital 0 16,059,118
Retained earnings 14,766,370 13,591,018
Unrealized appreciation on debt securities,
net of applicable income taxes 108,191 214,731
Treasury stock, 164,544 shares at cost (4,319,378) 0
TOTAL STOCKHOLDERS EQUITY 34,808,989 33,976,265
$338,112,241 $314,228,772
<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Years ended December 31, 1996 1995 1994

INTEREST INCOME
<S> <C> <C> <C>
Interest and fees on loans $21,519,178 $18,580,412 $16,911,283
Interest and dividends on securities:
Taxable interest 2,256,701 2,154,188 2,141,376
Nontaxable interest 444,322 438,779 423,123
Dividends 94,782 25,987 20,527
Interest on federal funds sold 562,115 761,257 234,334
TOTAL INTEREST INCOME 24,877,098 21,960,623 19,730,643

INTEREST EXPENSE
Deposits 10,117,809 9,199,760 7,694,588
Short-term borrowings 638,514 488,110 305,297
TOTAL INTEREST EXPENSE 10,756,323 9,687,870 7,999,885
NET INTEREST INCOME 14,120,775 12,272,753 11,730,758
Provision for credit losses 655,000 270,000 330,000
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 13,465,775 12,002,753 11,400,758

OTHER INCOME
Service charges on deposit accounts 1,089,891 972,325 940,077
Investment security gains (losses) 0 (197) 88,327
Other operating income 388,258 370,261 329,179
TOTAL OTHER INCOME 1,478,149 1,342,389 1,357,583
14,943,924 13,345,142 12,758,341
OTHER EXPENSES
Salaries and employee benefits - NOTE K 4,778,702 4,127,380 3,748,069
Net occupancy expense of premises 525,033 540,242 466,006
Furniture and equipment expense,
including depreciation 520,610 463,097 540,810
State and local taxes 514,943 439,918 389,988
Other operating expenses 2,543,221 2,548,276 2,610,518
TOTAL OTHER EXPENSES 8,882,509 8,118,913 7,755,391
INCOME BEFORE FEDERAL INCOME TAXES 6,061,415 5,226,229 5,002,950
FEDERAL INCOME TAXES - NOTE L 1,930,000 1,650,000 1,579,000
NET INCOME $4,131,415 $3,576,229 $3,423,950

NET INCOME PER SHARE $1.22 $1.09 $1.09
<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
COMMON STOCK
Balance at beginning of year $4,111,398 $3,892,480 $3,652,140
33,729 shares issued as a 2% stock dividend in 1996,
31,956 in 1995 and 30,210 in 1994, including
fractional shares. 1,500,940 79,890 75,525
59,618 shares sold in 1996,
55,611 in 1995 and 57,973 in 1994. 2,582,350 139,028 164,815
Transfer of additional paid-in capital to common stock 16,059,118 0 0
Balance at end of year 24,253,806 4,111,398 3,892,480

ADDITIONAL PAID-IN CAPITAL
Balance at beginning of year 16,059,118 13,300,977 11,260,621
Excess proceeds over par value of shares sold
in 1995 and 1994 1,735,549 1,360,631
Excess of fair value over par value of shares issued as
stock dividends in 1995 and 1994, including
fractional shares 1,022,592 679,725
Transfer of balance to common stock in 1996. (16,059,118) 0 0
Balance at end of year 0 16,059,118 13,300,977

RETAINED EARNINGS
Balance at beginning of year 13,591,018 12,385,429 10,896,312
Net income 4,131,415 3,576,229 3,423,950
Dividends declared:
$.88 cash dividends per share in 1996,
$.80 in 1995 and $.98 in 1994. (1,455,123) (1,268,158) (1,179,583)
Stock dividends (1,500,940) (1,102,482) (755,250)
Balance at end of year 14,766,370 13,591,018 12,385,429

UNREALIZED APPRECIATION (DEPRECIATION)
ON DEBT SECURITIES
Balance at beginning of year 214,731 (663,619) 187,006
Net change in unrealized appreciation (depreciation) on
debt securities, net of income taxes. (106,540) 878,350 (850,625)
Balance at end of year 108,191 214,731 (663,619)

TREASURY STOCK, AT COST
Balance at beginning of year 0 0 0
Purchase of treasury stock (4,319,378) 0 0
Balance at end of year (4,319,378) 0 0
TOTAL STOCKHOLDERS EQUITY AT END OF YEAR $34,808,989 $33,976,265 $28,915,267
<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

Years ended December 31, 1996 1995 1994
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Interest received $25,979,036 $22,784,609 $20,697,876
Fees and commissions received 1,418,149 1,342,586 1,291,231
Interest paid (10,758,848) (9,399,584) (8,006,238)
Cash paid to suppliers and employees (8,274,784) (7,779,200) (7,294,773)
Income taxes paid (2,075,000) (1,685,000) (1,690,726)
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,288,553 5,263,411 4,997,370

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investment securities available for sale 14,329,066 18,140,000 14,123,630
Proceeds from maturities of investment securities held to maturity 0 2,343,086 5,966,905
Proceeds from sales of investment securities available for sale 0 1,999,687 4,081,530
Purchases of other securities and securities available for sale (14,466,574) (18,114,267) (18,414,362)
Purchases of investment securities held to maturity 0 (2,639,035) (4,041,914)
Net increase in loans made to customers (35,031,303) (16,079,770) (14,615,389)
Purchases of premises and equipment (545,977) (1,582,773) (343,288)
Purchase of other real estate 0 0 (164,433)
Proceeds from sale of other real estate 0 252,291 0
NET CASH USED IN INVESTING ACTIVITIES (35,714,788) (15,680,781) (13,407,321)

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts (906,533) (3,148,523) 3,339,998
Net increase in time deposits 21,380,975 27,746,071 2,227,314
Net increase in Federal Home Loan Bank Borrowings 1,400,000 0 0
Purchase of Treasury Stock (4,319,378) 0 0
Dividends paid (1,138,142) (1,167,362) (999,957)
Proceeds from sale of common stock 2,582,350 1,874,577 1,525,446
NET CASH PROVIDED BY FINANCING ACTIVITIES 18,999,272 25,304,763 6,092,801
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,426,963) 14,887,393 (2,317,150)

CASH AND CASH EQUIVALENTS
Beginning of year 29,396,117 14,508,724 16,825,874
End of year $18,969,154 $29,396,117 $14,508,724

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
Net income $4,131,415 $3,576,229 $3,423,950
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 394,384 379,012 379,224
Amortization and accretion 1,177,727 966,775 958,468
Provision for credit losses 655,000 270,000 330,000
(Gain) Loss on sale of investment securities 0 197 (88,327)
Deferred income taxes (70,000) (12,636) (197,613)
Other 27 83,834 191,668
NET CASH PROVIDED BY OPERATING ACTIVITIES $6,288,553 $5,263,411 $4,997,370

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
Supplemental schedule of noncash investing and financing activities:
Unrealized loss on available for sale securities $48,228 $67,517 $1,005,950
Transfer of investment securities available for sale 0 4,663,982 0
Land exchanged for other borrowing 0 250,000 0

<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principals of Consolidation: The consolidated financial
statements include the accounts of the company and its
wholly-owned subsidiary, The Farmers' National Bank of Canfield.
All significant intercompany balances and transactions have
been eliminated.

Nature of Operations: The company's wholly owned subsidiary,
The Farmers National Bank of Canfield, operates under a national
bank charter and provides full banking services. 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 area served by the Bank is the northeastern
region of Ohio and service is provided at ten (10) locations.

Estimates: The preparation of financial statements in
conformity with 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 and Cash Equivalents: Cash and cash equivalents include
cash on hand, due from banks and federal funds sold. Generally,
federal funds are purchased and sold for one-day periods.

Securities Available for Sale: Securities available for sale
are carried at fair value. Fair value is based on market price
if available. If market price is not available, fair value is
based on broker quotations. Deferred income taxes are provided
on any unrealized appreciation or decline in value. Such
appreciation or decline in value, net of deferred taxes, is
reflected as a separate component of stockholders equity. Gains
and losses are determined using the specific identification
method. The company does not utilize a trading account.

Other Securities: Other securities include stock in the Federal
Reserve Bank and the Federal Home Loan Bank and are recorded at
amortized cost.

Loans: Interest on loans is accrued and credited to income
based on the principal amount outstanding. The accrual of
interest income is ordinarily discontinued when a loan becomes
90 days past due as to principal or interest; however,
management may elect to continue the accrual when the estimated
net realizable value of collateral is sufficient to cover the
principal balance and the accrued interest. When interest
accruals are discontinued, interest credited to income in the
current year is reversed. When the loan is determined to be
uncollectible, interest accrued in prior years and the principal
are charged to the allowance for loan losses. This policy
applies to the bank's installment, real estate and commercial
and industrial loans.

Loan Origination Fees and Costs: Loan origination fees and
certain direct origination costs are capitalized and recognized
as an adjustment of the yield on the related loan.

Impaired Loans: Impaired loans are classified according to the
Financial Accounting Standards Board Statement 114, "Accounting
by creditors for impairment of loans". Under this standard, the
1996 reserve for loan losses related to loans that are
considered impaired would be based on discounted cash flows
using the loan's initial effective interest rate and the fair
value of the collateral for certain collateral dependent loans.
At the present time, management did not have any loans it
considers to be impaired.

Allowance for Credit Losses: the allowance for credit losses
represents the amounts which, in management's judgment, are
adequate to absorb charge-offs, of existing loans which may
become uncollectible. The allowance is based on management's
judgment taking into consideration past loss experience, reviews
of individual credits, 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 allowances. If additions to the original
estimate of the allowance for credit losses are deemed
necessary, they will be reported in earnings in the period in
which they become reasonably estimable.

Premises and Equipment: Premises and equipment are stated at
cost. Depreciation is computed on the straight-line method.

Income Taxes: Income taxes, based on filing a consolidated
return with the company's subsidiary, are provided for amounts
currently due and deferred amounts arising form temporary
differences between the financial accounting and income tax
basis of assets and liabilities. Deferred taxes are computed on
the liability method as prescribed in Statement of Financial
Accounting Standards (SFAS) no. 109, "Accounting for Income
Taxes".

Per Share Amounts: Earnings per share are based on weighted
average shares outstanding. Average shares outstanding, per
share amounts and reference to number of shares in notes to
consolidated financial statements have been restated to give
effect to stock dividends. Weighted average shares outstanding
were 3,378,142 for 1996, 3,282,686 for 1995 and 3,152,900 for
1994.

<TABLE>
NOTE B - SECURITIES AVAILABLE FOR SALE

Securities available for sale at December 31, 1996 and 1995 are summarized as follows:
<CAPTION>
1996 1995
<S> <C> <C>
U.S. Treasury and U.S. Government agencies $31,448,958 $31,691,768
Corporate debt securities 6,661,560 7,702,820
Obligations of states and political subdivisions 7,501,270 6,943,089
Collateralized mortgage obligations 0 142,208
TOTALS $45,611,788 $46,479,885
</TABLE>

<TABLE>
Net unrealized gains (losses) for securities available for sale at December 31, 1996 and 1995 are summarized below:
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
December 31, 1996 GAINS LOSSES GAINS
<S> <C> <C> <C>
U.S. Treasury and U.S. Government agencies $82,250 ($36,892) $45,358
Corporate debt securities 41,705 (10,171) 31,534
Obligations of states and political subdivisions 88,200 (1,165) 87,035
TOTALS $212,155 ($48,228) $163,927

December 31, 1995
U.S. Treasury and U.S. Government agencies $208,710 ($53,309) $155,401
Corporate debt securities 59,924 (11,490) 48,434
Obligations of states and political subdivisions 120,542 (59) 120,483
Collateralized mortgage obligations 3,691 0 3,691
TOTALS $392,867 ($64,858) $328,009
</TABLE>

<TABLE>
The fair value and book value of securities available for sale by contractual maturities at December 31, 1996
are summarized below:
<CAPTION>
FAIR VALUE BOOK VALUE
<S> <C> <C>
Due in 1 year or less $13,489,952 $13,463,410
Due after one year through five years 24,392,024 24,300,457
Due after five years through ten years 2,595,932 2,547,945
Due after ten years 5,133,880 5,136,049
TOTALS $45,611,788 $45,447,861
</TABLE>

Securities with a carrying value of $30,100,000 at December 31, 1996 and
$28,000,000 at December 31, 1995 were pledged to secure deposits in
accordance with federal and state requirements and to secure repurchase
agreements sold.

NOTE C - LOANS
<TABLE>
Following is a summary of loans:
<CAPTION>
December 31, 1996 1995
<S> <C> <C>
Real Estate $105,026,533 $98,703,845
Installment 133,865,605 109,291,914
Commercial and Industrial 26,548,440 23,302,163
Subtotal 265,440,578 231,297,922
Net origination and deferred loan fees 1,261,745 861,748
TOTAL LOANS $266,702,323 $232,159,670
<FN>
Nonperforming loans have not been separately classified because such loans are not material
compared to total loans and nonaccrued interest is not material in relation to net income.
</FN>
</TABLE>

NOTE D - ALLOWANCE FOR CREDIT LOSSES
<TABLE>
Following is an analysis of changes in the allowance for credit losses for the years ended December 31:
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of year $2,910,838 $2,746,420 $2,620,741
Additions:
Provision for credit losses 655,000 270,000 330,000
Recoveries on loans previously charged off 184,098 170,879 183,050
TOTAL ADDITIONS 3,749,936 3,187,299 3,133,791
Credits charged off (552,047) (276,461) (387,371)
Balance at end of year $3,197,889 $2,910,838 $2,746,420
<FN>
The allowance for federal income tax purposes amounted to $752,962 at December 31, 1996, which is $2,444,927
less than the allowance for financial accounting purposes.
</FN>
</TABLE>

NOTE E - PREMISES AND EQUIPMENT
<TABLE>
Following is a summary of premises and equipment:
<CAPTION>
December 31, 1996 1995
<S> <C> <C>
Land $1,204,876 $1,180,876
Premises 4,987,755 4,780,574
Equipment 3,481,239 3,803,326
Leasehold Improvements 179,778 178,123
9,853,648 9,942,899
Less accumulated depreciation 4,156,050 4,379,667
NET BOOK VALUE $5,697,598 $5,563,232
<FN>
Depreciation expense was $394,384 for the year ended December 31, 1996, $379,012 for 1995 and
$379,224 for 1994.
</FN>
</TABLE>

NOTE F - INTEREST-BEARING DEPOSITS

Following is a summary of scheduled maturities of certificates of deposit
during the years following December 31, 1996:

1997 $69,703,188
1998 39,205,874
1999 4,953,892
2000 8,165,424
2001 and thereafter 9,071,049
TOTAL $131,099,427

Following is a summary of certificates of deposit of $100,000 or more by
remaining maturities as of December 31, 1996:

Three months or less $5,221,113
Three to six months 3,737,601
Six to twelve months 2,606,127
Over twelve months 10,864,346
TOTAL $22,429,187

NOTE G - SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND UNUSED
LINES OF CREDIT

The bank subsidiary enters into sales of securities under
repurchase agreements (reverse repurchase agreements).
Securities underlying the agreements are U.S. Government
securities with a book value including accrued interest of
$16,925,491 for the year ended December 31, 1996 and $12,819,579
for 1995. The market value was $16,923,236 for 1996 and
$12,829,848 for 1995. At December 31, 1996, these agreements
had a weighted average interest rate of 4.55% and will mature
January through March 1997. The securities, although held in
safekeeping outside the bank subsidiary, were under the bank
subsidiary's control. Securities sold under repurchase
agreements averaged monthly $11,691,979 in 1996 and $9,498,008
in 1995. Maximum amounts outstanding at any month end during
1996 and 1995 were $15,748,622 and $11,849,736, respectively.

The bank subsidiary has access to short term credit facilities
at the Federal Home Loan Bank, which totaled $11,424,000 at
December 31, 1996. At December 31, 1996, the total advances
outstanding was $1,400,000, and was collateralized by a blanket
pledge of residential mortgage loans.

NOTE H - COMMITMENTS AND CREDIT RISK

The bank subsidiary utilizes equipment and conducts certain of
its branch operations under noncancelable operating leases
extending to 1999. The building leases include options for
renewal in five to ten year increments. Rental expense charged
to operations totaled $125,129 for 1996, $120,750 for 1995 and
$94,106 for 1994. Following is a summary of future minimum
rental payments under operating leases that have initial or
remaining noncancelable terms in excess of one year as of
December 31, 1996:

Year ending:

December 31, 1997 $85,728

December 31, 1998 56,720

December 31, 1999 30,000

TOTAL $172,448

The bank subsidiary is required to maintain noninterest-bearing
reserve balances with the Federal Reserve Bank. The average
reserve balance was $6,165,000 for 1996.

The bank subsidiary is a party to financial instruments with
off-balance sheet risk in the normal course of business to meet
the financing needs of its customers. These financial
instruments include commitments to extend credit, standby
letters of credit and financial guarantees. Those instruments
involve, to varying degrees, elements of credit risk in excess
of the amount recognized on the consolidated balance sheet. The
contract or notional amounts of those instruments reflect the
extent of involvement the bank subsidiary has in particular
classes of financial instruments.

The bank subsidiary's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument
for commitments to extend credit and standby letters of credit
and financial guarantees written is represented by the
contractual notional amount of those instruments. The bank
subsidiary uses the same credit policies in making commitments
and conditional obligations as it does for on-balance sheet
instruments.

CONTRACT OR NOTIONAL AMOUNT

Financial instruments whose contract amounts represent credit
risk:

Commitments to extend credit $9,791,134

Standby letters of credit
and financial guarantees written $ 237,203

Commitments to extend credit are agreements to lend to a
customer as long as there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements. The bank
subsidiary evaluates customers creditworthiness on a
case-by-case basis. The amount of collateral obtained, if
deemed necessary by the bank subsidiary upon extension of
credit, is based on management's credit evaluation of the
counter-party. Collateral held varies but may include accounts
receivable, inventory, property, plant and equipment and income
producing commercial properties.

Standby letters of credit and financial guarantees written are
conditional commitments issued by the bank subsidiary to
guarantee the performance of a customer to a third party. Those
guarantees are primarily issued to support public and private
borrowing arrangements. The credit risk involved in issuing
letters of credit is essentially the same as that involved in
extending loan facilities to customers.

Most of the bank subsidiary's business activity is with a
diversified customer base located within Mahoning and Columbiana
Counties in Ohio. The concentrations of credit by type of loan
are presented in Note C.

NOTE I - STOCKHOLDERS EQUITY

On March 28, 1996, the shareholders of the company approved a
resolution which amended the company's Restated Articles of
Incorporation to increase the number of authorized shares of
common stock from 2,400,000 shares, par value $2.50, to
5,000,000 shares, without par value. The additional paid-in
capital account has been combined with common stock as presented
in the Consolidated Statements of Stockholders Equity.

NOTE J - REGULATORY MATTERS

The bank subsidiary is subject to various regulatory capital
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate
certain mandatory-and possibly additional discretionary-actions
by regulators that, if undertaken, could have a direct material
effect on the bank subsidiary's financial statements. Under
capital adequacy guidelines and the regulatory framework for
prompt corrective action, the bank subsidiary must meet specific
capital guidelines that involve quantitative measures of its
assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices. The bank
subsidiary's capital amounts and classification are also subject
to qualitative judgments by the regulators about components,
risk weightings, and other factors.

Quantitative measures established by regulation to ensure
capital adequacy require the bank subsidiary to maintain minimum
amounts and ratios (set forth in the table below) of total and
Tier I capital (as defined in the regulations) to risk-weighted
assets (as defined), and of Tier I capital (as defined) to
average assets (as defined). Management believes, as of
December 31, 1996, that the bank subsidiary meets all capital
adequacy requirements to which it is subject.

As of December 31, 1996, the most recent notification from the
Office of the Comptroller of the Currency categorized the bank
subsidiary 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.

<TABLE>
The following table reflects various measures of capital at year-end:
<CAPTION>
Requirement
For Capital
Actual Adequacy Purposes:
Amount Ratio Amount Ratio
<S> <C> <C> <C> <C>
As of December 31, 1996
Total Capital
(to Risk-Weighted Assets) $37,199,000 15.34% $19,399,000 8.00%
Tier I Capital
(to Risk-Weighted Assets) $34,166,000 14.09% $9,700,000 4.00%
Tier I Capital
(to Average Assets) $34,166,000 10.18% $13,424,000 4.00%

As of December 31, 1995
Total Capital
(to Risk-Weighted Assets) $36,072,000 16.84% $17,141,000 8.00%
Tier I Capital
(to Risk-Weighted Assets) $33,391,000 15.58% $8,571,000 4.00%
Tier I Capital
(to Average Assets) $33,391,000 10.69% $12,496,000 4.00%
</TABLE>

NOTE K - RETIREMENT PLANS

The bank subsidiary has a noncontributory defined benefit
pension plan covering substantially all employees. Normal
retirement age is 65. Benefit payments for normal retirement
are based on a percentage of employees' average monthly
compensation during the last five years of employment. Funding
of the plan, which is invested principally in domestic bank
certificates of deposit, is based upon current service cost plus
amortization of past service cost over 15 years. The company's
funding policy is to generally contribute annually the maximum
amount that can be deducted for federal income tax purposes.

The company adopted a resolution on January 22, 1996 to
terminate the defined benefit pension plan effective November 1,
1995. At December 31, 1996 the plan assets exceeded plan
obligations by $65,645. Management's intent is to allocate this
surplus to each qualified participant on a pro-rata basis. All
plan assets will be distributed upon approval of the necessary
authorities. Pension expense for the defined benefit plan was
$17,295 in 1996, $156,253 in 1995 and $183,157 in 1994.

In May, 1996, the company adopted a qualified 401(k) deferred
compensation, noncontributory Retirement Savings Plan. All
employees of the bank who have completed at least one year of
service and meet certain other eligibility requirements are
eligible to participate in the plan. Under the terms of the
Plan, employees may voluntarily defer a portion of their annual
compensation, not to exceed 15%, 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 plan. Company contributions to the 401(k)
plan were $161,435 for the year ended December 31, 1996.

The components of pension expense related to the defined benefit
plan for the year ended December 31, 1995 are as follows:

Service cost $132,605
Interest cost 134,030
Return on assets (39,659)
Other (70,723)
TOTAL $156,253

Following is the funded status of the plan as of December 31, 1995:

Actuarial present value of benefit obligations:
Vested benefit obligation $1,557,215

Accumulated benefit obligation $1,573,680

Projected benefit obligation ($2,119,606)
Plan assets at fair value 1,738,082
Projected benefit obligation in excess of plan assets (381,524)
Unrecognized transition gain (9,070)
Unrecognized prior service cost (70,006)
Unrecognized net loss 529,188
Prepaid pension cost $68,588

Assumptions used to develop the net periodic pension cost were:

Assumed discount rate 6.25%
Assumed rate of compensation increase 4.00%
Expected rate of return on plan assets 6.25%

NOTE L - FEDERAL INCOME TAXES
<TABLE>
The provision for income taxes (credit) consists of the following:
<CAPTION>
Years ended December 31 1996 1995 1994
<S> <C> <C> <C>
Current $2,000,000 $1,662,636 $1,776,613
Deferred (70,000) (12,636) (197,613)
TOTALS $1,930,000 $1,650,000 $1,579,000
</TABLE>

<TABLE>
Following is a reconciliation between federal income taxes at statutory rates and actual taxes based on income before
federal income taxes:
<CAPTION>
Years ended December 31 1996 1995 1994
Percent of Percent of Percent of
Amount pretax income Amount pretax income Amount pretax income
<S> <C> <C> <C> <C> <C> <C>
Statutory tax $2,121,500 35% $1,829,180 35% $1,751,050 35%
Effect of nontaxable interest (155,510) (3) (152,360) (3) (148,100) (3)
Other (35,990) 0 (26,820) 0 (23,950) 0
ACTUAL TAX $1,930,000 32% $1,650,000 32% $1,579,000 32%
</TABLE>

<TABLE>
Deferred taxes (credit) result from certain temporary differences in the recognition of income and expenses for financial
reporting and income tax purposes. The sources and tax effects of significant temporary differences are as follows:
<CAPTION>
Years ended December 31 1996 1995 1994
<S> <C> <C> <C>
Depreciation $42,397 $17,176 $1,330
Provision for credit losses (97,597) (57,546) (137,931)
Deferred loan fees and
origination costs (13,496) 29,038 (59,708)
Other (1,304) (1,304) (1,304)
TOTALS ($70,000) ($12,636) ($197,613)
</TABLE>

<TABLE>
Deferred tax liabilities (assets) are comprised of the following at December 31:
<CAPTION>
Deferred tax asset: 1996 1995
<S> <C> <C>
Allowance for credit losses ($817,876) ($720,279)
Deferred loan fee income (134,501) (169,733)
Gross deferred tax assets (952,377) (890,012)

Deferred tax liabilities:
Depreciation 420,129 376,428
Prepaid loan origination costs 50,002 100,005
Mark-to-market adjustment -
securities available for sale 55,734 110,619
Other 22,182 23,515
Gross deferred tax liabilities 548,047 610,567
($404,330) ($279,445)
<FN>
No valuation allowance for deferred tax assets was recorded at December 31, 1996. Federal income taxes applicable to
investment securities gains were $70 for 1995 and $30,100 for 1994.
</FN>
</TABLE>

NOTE M - LOANS TO RELATED PARTIES

Certain directors, executive officers and associates of such
persons were loan customers during 1996. Such loans were made
in the ordinary course of business under normal credit terms and
do not represent more that a normal risk of collection.
Following is an analysis of the amount of loans in which the
aggregate of the loans to any such person exceeded $60,000
during 1996:

Total loans at December 31, 1995 $1,092,464

New loans 172,204

Repayments 201,143

Total loans at December 31, 1996 $1,063,525

NOTE N - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the
fair value of each class of financial instruments at December
31, 1996:

Cash and cash equivalents: The carrying amounts in the
consolidated balance sheets of cash and cash equivalents
approximates their fair value.

Investment securities: The fair value of securities available
for sale equals quoted market price, if available. If a quoted
market price is not available, fair value is estimated using
quoted market prices for similar securities.

Loans: For certain homogeneous categories of loans, such as
credit card receivables, and other consumer loans, fair value is
estimated using the quoted market prices for similar loans,
adjusted for differences in loan characteristics. The fair
value of other types of loans is estimated by discounting the
future cash flows using the current rates at which similar loans
would be made to borrowers with similar credit ratings and for
the same remaining maturities.

Deposits: The fair value of demand deposits, savings accounts
and certain money market deposits is the amount payable on
demand at the reporting date. The fair value of fixed-maturity
certificates of deposit is estimated using the rates currently
offered for deposits of similar remaining maturities.

Securities sold under repurchase agreements: The carrying
amount for securities sold under repurchase agreement
approximates their fair value.

Short term borrowings: The carrying amounts of short-term
borrowings approximates their fair value.

Commitments to extend credit, standby letters of credit and
financial guarantees written: The fair value of commitments is
estimated using the fees currently charged to enter similar
agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the
counterparties. For fixed-rate loan commitments, fair value
also considers the difference between current levels of interest
rates and the committed rates. The fair value of guarantees and
letters of credit is based on fees currently charged for similar
agreements or on the estimated cost to terminate them or
otherwise settle the obligations with the counterparties at the
reporting date.

<TABLE>
The estimated fair values of the company's financial instruments as of December 31, 1996 and 1995 are as follows:
<CAPTION>
1996 1995
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
<S> <C> <C> <C> <C>
Financial assets:
Cash and cash equivalents $18,969,154 $18,969,154 $29,396,117 $29,396,117
Investment securities:
Available for sale 45,611,788 45,859,357 46,479,885 46,601,970
Other securities 1,467,650 1,467,650 852,900 852,900
Loans - Net 263,504,434 263,590,306 229,248,832 229,711,573
TOTAL FINANCIAL ASSETS $329,553,026 $329,886,467 $305,977,734 $306,562,560

Financial liabilities:
Deposits $283,810,866 $284,578,528 $267,954,773 $269,381,383
Securities sold under repurchase agreements 15,748,622 15,748,622 9,847,119 9,847,119
Short term borrowings 2,022,129 2,022,129 748,470 748,470
TOTAL FINANCIAL LIABILITIES $301,581,617 $302,349,279 $278,550,362 $279,976,972

Unrecognized financial instruments:
Commitments to extend credit $9,791,134 $9,791,134 $9,868,007 $9,868,007
Standby letters of credit and financial guarantees 237,203 237,203 123,604 123,604
</TABLE>

NOTE O - CONDENSED FINANCIAL INFORMATION

Below is condensed financial information of Farmers National Banc Corp.
(parent company only). In this information, the parent's investment in
bank subsidiary is stated at cost plus equity in undistributed earnings
of the subsidiary since acquisition. This information should be read in
conjunction with the consolidated financial statements and related notes.

<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995
BALANCE SHEETS
<S> <C> <C>
Assets:
Cash $1,197,314 $692,398
Receivables 7,918 7,918
Investment in bank subsidiary 34,506,112 33,756,098
$35,711,344 $34,456,414

Liabilities:
Accounts payable $1,010,546 $694,880
Stockholders equity:
Common stock 24,253,806 4,111,398
Additional paid-in capital 0 16,059,118
Retained earnings 14,766,370 13,591,018
Treasury Stock (4,319,378) 0
TOTAL STOCKHOLDERS EQUITY 34,700,798 33,761,534
$35,711,344 $34,456,414
</TABLE>

<TABLE>
<CAPTION>
STATEMENTS OF INCOME
Years ended December 31, 1996 December 31, 1995 December 31, 1994
<S> <C> <C> <C>
Income:
Equity in net income of subsidiary $4,194,441 $3,621,920 $3,472,068
Other expenses (63,026) (45,691) (48,118)
NET INCOME $4,131,415 $3,576,229 $3,423,950

STATEMENTS OF CASH FLOWS
Years ended December 31, 1996 December 31, 1995 December 31, 1994
Cash flows from operating activities:
Net income $4,131,415 $3,576,229 $3,423,950
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease in deferred director fees (1,316) (1,302) (1,233)
Income from subsidiary (4,194,441) (3,621,920) (3,472,068)
Dividends received from subsidiary 6,026,778 1,267,017 1,283,911
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,962,436 1,220,024 1,234,560

Cash flows from investing activities:
Investment in subsidiary (2,582,350) (1,874,575) (1,525,446)
NET CASH USED IN INVESTING ACTIVITIES (2,582,350) (1,874,575) (1,525,446)
Cash flows from financing activities:
Purchase of Treasury Stock (4,319,378) 0 0
Dividends paid (1,138,142) (1,167,362) (999,957)
Proceeds from sale of common stock 2,582,350 1,874,577 1,525,446
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2,875,170) 707,215 525,489
NET INCREASE IN CASH 504,916 52,664 234,603

CASH
Beginning of year 692,398 639,734 405,131
End of year $1,197,314 $692,398 $639,734
<FN>
Cash dividends of $6,026,778, $1,267,017 and $1,283,911 were recevied from the bank subsidiary in 1996, 1995 and 1994,
respectively.
</FN>
</TABLE>

INSIDE BACK COVER

Drawing of Map of Ohio Highlighting Branch Locations

MAIN OFFICE

20 S. Broad St., Canfield, OH 44406 533-3341

AUSTINTOWN

22 N. Niles-Canfield Rd. Youngstown, OH 44515 792-1411

COLONIAL PLAZA

401 E. Main St. Canfield, OH 44406 533-2686

CORNERSBURG

3619 S. Meridian Rd. Youngstown, OH 44511 793-3971

LAKE MILTON

17817 Mahoning Ave. Lake Milton, OH 44429 654-3351

SALEM

1858 E. State St. Salem, OH 44460 332-1558

WESTERN RESERVE

102 W. Western Reserve Rd. Youngstown, OH 44514 726-8896

COLUMBIANA

340 State Rt. 14 Columbiana, OH 44408 482-1974

LEETONIA

16 Walnut St. Leetonia, OH 44431 427-2436

DAMASCUS

29053 State Route 62 Damascus, OH 44619 537-4004

<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000709337
<NAME> FARMERS NATIONAL BANC CORP
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 13,302
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,667
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 45,612
<INVESTMENTS-CARRYING> 1,468
<INVESTMENTS-MARKET> 1,468
<LOANS> 266,702
<ALLOWANCE> 3,198
<TOTAL-ASSETS> 338,112
<DEPOSITS> 283,811
<SHORT-TERM> 17,771
<LIABILITIES-OTHER> 1,722
<LONG-TERM> 0
0
0
<COMMON> 24,254
<OTHER-SE> 10,555
<TOTAL-LIABILITIES-AND-EQUITY> 338,112
<INTEREST-LOAN> 21,519
<INTEREST-INVEST> 3,358
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 24,877
<INTEREST-DEPOSIT> 10,118
<INTEREST-EXPENSE> 10,756
<INTEREST-INCOME-NET> 14,121
<LOAN-LOSSES> 655
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 8,883
<INCOME-PRETAX> 6,061
<INCOME-PRE-EXTRAORDINARY> 6,061
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,131
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
<YIELD-ACTUAL> 8.13
<LOANS-NON> 0
<LOANS-PAST> 2,098
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,911
<CHARGE-OFFS> 552
<RECOVERIES> 184
<ALLOWANCE-CLOSE> 3,198
<ALLOWANCE-DOMESTIC> 3,198
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>

SCHEDULE 14A-INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14 INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12

Farmers National Banc Corp.
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11:

1. Title of each class of securities to which transaction applies:
.................................................................
2. Aggregate number of securities to which transaction applies:
.................................................................
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was
determined):
.................................................................
4. Proposed maximum aggregate value of transaction:
.................................................................
5. Total fee paid:
.................................................................
...........................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number or the Form or Schedule
and the date of its filing.

1. Amount Previously Paid:
.................................................................
2. Form, Schedule or Registration Statement No.:
.................................................................
3. Filing Party:
.................................................................
4. Date Filed:
.................................................................
(Amended by Exch Act Rel No.35113, eff 1/30/95)

FARMERS NATIONAL BANC CORP.
20 SOUTH BROAD STREET
CANFIELD, OHIO 44406

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MARCH 27, 1997

TO THE HOLDERS OF SHARES OF COMMON STOCK:

NOTICE IS HEREBY GIVEN that pursuant to call of its Directors,
the Annual Meeting of the Shareholders of FARMERS NATIONAL BANC
CORP., Canfield, Ohio will be held at Colonial Catering located
at 429 Lisbon Street, Canfield, Ohio 44406 on Thursday, March
27, 1997 at three-thirty o'clock (3:30) P.M., Eastern Standard
Time, for the purpose of considering and voting upon the
following matters:

1. ELECTION OF DIRECTORS. Fixing the number of Directors to be
elected at eight (8) and the election of the eight (8) persons
listed in the accompanying Proxy Statement.

2. TO TRANSACT SUCH OTHER BUSINESS as may properly come before the
Meeting or any adjournment thereof.

Shareholders of record at the close of business on February
28, 1997 are the only shareholders entitled to notice of and to
vote at the Annual Shareholders Meeting.

By Order of the Board of Directors

Frank L. Paden, President & Secretary

Canfield, Ohio
March 6, 1997

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL
MEETING, PLEASE SIGN, DATE AND COMPLETE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE.

FARMERS NATIONAL BANC CORP.
CANFIELD, OHIO 44406

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

MARCH 27, 1997

Farmers National Banc Corp., herein referred to as "Farmers" or
the "Corporation" is furnishing this Proxy Statement to its
shareholders in connection with the solicitation, by order of
the Board of Directors of Farmers, of proxies to be used at the
Annual Meeting of Shareholders to be held on Thursday, March 27,
1997 at 3:30 P.M., Eastern Standard Time, at Colonial Catering,
429 Lisbon Street, Canfield, Ohio 44406, and at any adjournments
thereof. The Corporation is a one-bank holding company of which
The Farmers National Bank of Canfield is the wholly owned
subsidiary.

The cost for solicitation of proxies will be borne by Farmers.
Brokerage firms and other custodians, nominees and fiduciaries
may be requested to forward soliciting material to their
principals and to obtain authorization for the execution of
proxies. Farmers will, upon request, reimburse brokerage firms,
and other custodians, nominees and fiduciaries for the execution
of proxies and for their expenses in forwarding proxy material
to their principals.

The proxy statements and the form of proxy are being mailed on
March 6, 1997 or as soon thereafter as practicable to all
shareholders entitled to vote at the meeting. In addition to
use of mails, proxies may be solicited by officers, directors,
and employees of Farmers by personal interview, telephone and
telegraph.

VOTING RIGHTS

Only shareholders of record at the close of business on
February 28, 1997 will be entitled to vote at the meeting. As
of February 28, 1997, Farmers had issued and outstanding
3,311,268 shares of common stock with no par value. Each
outstanding share entitles the recordholder to one vote. The
number of shares present at the meeting in person or by proxy
will constitute a quorum for the transaction of business.

It is important that your stock be represented at the meeting,
regardless of the number of shares you may own. We would
appreciate your signing and returning the enclosed proxy. The
shares represented by each proxy, which is properly executed and
returned to Farmers, will be voted in the manner described in
this proxy statement and the proxy. In the absence of
instructions, the proxy will be voted "For" the election of the
eight (8) persons listed in this Proxy Statement. The proxy may
be revoked at any time prior to its exercise, by delivering
notice of revocation or a duly executed proxy bearing a later
date to the Treasurer of the Corporation at any time before the
proxy is voted. Shareholders who attend the meeting in person
may vote their stock even though they may have sent in a proxy.
No officer or employee of Farmers may be named as a proxy. If
you received two or more proxy forms because of difference in
addresses or registration of shareholdings, each should be
executed and returned in order to assure a complete tabulation
of shares.

The corporation will appoint two officers to act as inspectors
for purposed of tabulating the votes cast by proxy. Broker
non-votes and abstentions are not treated as votes cast for
purposes of any of the matters to be voted on at the meeting.

ELECTION OF DIRECTORS

Pursuant to the Code of Regulations, the authorized number of
directors of Farmers has been set at eight (8). The Board of
Directors has nominated the eight (8) persons named below to
serve as directors until the next Annual Meeting or until their
earlier death, resignation or removal from office. Each of the
eight (8) nominees is presently a member of the Board of
Directors and has consented to serve another term as director if
re-elected. If any of the nominees should be unavailable to
serve for any reason (which is not anticipated), the Board of
Directors may designate a substitute nominee or nominees (in
which case the persons named on the enclosed proxy card will
vote all valid proxy cards for the election of such substitute
nominee or nominees), allow the vacancy or vacancies to remain
open until a suitable candidate or candidates are located, or by
resolution provide for a lesser number of directors.

INFORMATION WITH RESPECT TO NOMINEES

Certain information in the following tabulation has been
furnished to Farmers by the respective nominees for director.

Principal Occupation and Director
Name Five Year Business Experience Age Since (A)

Benjamin R. Brown President and Owner, Castruction 51 1991
Company, Incorporated in 1965 -
designs and manufactures pre-cast
shapes and associated products for
the steel industry.

Richard L. Calvin Vice Chairman since 1996, formerly, 70 1975
Executive Vice President/Cashier of
Farmers National Bank since 1972
and Executive Vice President/
Treasurer of Farmers National Banc
Corp. since 1983.

Joseph O. Lane President and Owner - Lane Funeral 72 1965
Homes, Inc. since 1950, Lane Life
Paramedics, Inc. and Lane Monument Co.
- operates three funeral homes , an
EMT and ambulance service.

David C. Myers President and Owner - Myers Equipment 68 1988
Corp. since 1955 - sales of truck
equipment and school buses. Mr.
Myers operates a 2,000 acre farm
since 1946.

Edward A. Ort President of Ort Furniture Mfg. Co. 67 1993
since 1973 - manufacture of
upholstered furniture which is shipped
to retail furniture stores in
northeastern United States since 1957.

Frank L. Paden President & CEO of Farmers National 45 1992
Bank since 1996. EVP/Sr. Loan Officer
since 1991. President & Secretary of
Farmers National Banc Corp. since 1996.

William D. Stewart Chairman since 1996. Formally, 67 1972
President of Farmers National Bank
since 1972 and President & Secretary of
Farmers National Banc Corp. since 1983.

Ronald V. Wertz President and Owner of Boyer 49 1989
Insurance Inc. since 1981 - provides
risk management analysis and policies
for individuals, families and business
insurance plans, including property,
liability, health, life and bonding.

(A) Includes the period served as a director of The Farmers
National Bank of Canfield prior to its reorganization into a
wholly owned subsidiary of this Corporation.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires
the Corporation's directors and executive officers, and persons
who own more than 10% of a registered class of the Corporation's
equity securities, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity
securities of the Corporation. Officers, directors and greater
than 10% stockholders are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.

To the Corporation's knowledge, based solely on a review of the
copies of such reports furnished to the Corporation and written
representations that no other reports were required, during
1996, all Section 16(a) filing requirements applicable to its
officers, directors and greater that 10% beneficial owners were
complied with.

SECURITY OWNERSHIP OF MANAGEMENT

The following tables sets forth information regarding
beneficial ownership as of December 31, 1996, of the
Corporation's common shares of each Director and all Executive
Officers as a group.

Name Aggregate Number of Percent of
Shares Beneficially Outstanding
Owned (A) Shares

Benjamin R. Brown 27,398 .83%

Richard L. Calvin 37,574 1.13%

Joseph O. Lane 80,282 2.42%

David C. Myers 24,860 .75%

Edward A. Ort 6,238 .19%

Frank L. Paden 8,090 .24%

William D. Stewart 30,266 .91%

Ronald V. Wertz 24,614 .74%

Executive Officers as a Group 3,214 .10%

Total 242,536 7.32%

(A) Beneficial Ownership includes those shares over which an
individual has sole or shared voting, or investment purposes
such as beneficial interest of a spouse, minor children, or
other relatives living in the home of the named individual,
trusts, estates and certain affiliated companies.

COMMITTEES OF THE BOARD OF DIRECTORS

At the Directors' organizational meeting, held immediately
following the last annual shareholders' meeting of The Farmers
National Banc Corp. held on March 28, 1996, the following
committees were appointed by the Chairman:

EXECUTIVE COMPENSATION AND EMPLOYEES SALARY COMMITTEE: Joseph
O. Lane, Chairman; Benjamin R. Brown, David C. Myers, Edward A.
Ort, and Ronald V. Wertz.

The Executive Compensation and Employees Salary Committee
reviews the compensation of the official staff and makes
recommendations regarding all employee benefits to the Board of
Directors. This committee met one time in 1996.

AUDIT & EXAMINING COMMITTEE: David C. Myers, Chairman;
Benjamin R. Brown, Edward A. Ort, and Ronald V. Wertz.

The Audit and Examining Committee directs the activities of the
internal audit staff, reviews the internal auditor's reports,
reviews all examinations of the Comptroller of the Currency and
makes recommendations to the Board regarding the engagement of
an external auditing firm to perform the annual audit and
prepare income tax returns. This committee met four times in
1996.

DISCOUNT LOAN COMMITTEE: Frank L. Paden, Chairman; Benjamin
R. Brown, Richard L. Calvin, Joseph O. Lane, David C. Myers,
Edward A. Ort, William D. Stewart, and Ronald V. Wertz.

The Discount Loan Committee meets weekly to review all loans
made during the previous week and to approve all loan
commitments which are either above the assigned lending limits
of the loan officers or are not in keeping with existing bank
policy.

BUILDING COMMITTEE: Richard L. Calvin, Chairman; Ad Hoc.

The Building Committee oversees site selection, office
additions and modifications. This committee did not
specifically meet in 1996, however, the chairman did report to
the directors at other meetings.

LONG RANGE AND STRATEGIC PLANNING COMMITTEE: Frank L. Paden,
Chairman; Benjamin R. Brown, Richard L. Calvin, Joseph O. Lane,
David C. Myers, Edward A. Ort, William D. Stewart, and Ronald V.
Wertz.

The Long Range and Strategic Planning Committee is responsible
for formulation and implementation of the Strategic Plan for the
operation of the Corporation. This committee met twice in 1996.

NOMINATING COMMITTEE: Frank L. Paden, Chairman; Benjamin R.
Brown, Richard L. Calvin, Joseph O. Lane, David C. Myers, Edward
A. Ort, William D. Stewart, and Ronald V. Wertz.

The Nominating Committee makes decisions with respect to: (a)
nominees for election as director at the annual meeting of
shareholders; (b) nominees to fill Board vacancies between
annual meetings; and (c) the composition of membership of the
various other standing committees. This committee did not meet
in 1996.

RISK MANAGEMENT AND INSURANCE COMMITTEE: Ronald V. Wertz,
Chairman; Benjamin R. Brown, Richard L. Calvin, and Carl D.
Culp, EVP/Cashier/CFO.

The Risk Management and Insurance Committee is responsible for
reviewing coverage and protection levels of insurance maintained
by the Bank. The committee met once in 1996.

During 1996, each director standing for re-election, was
present for more that 75% of the combined number of meetings of
the Board of Directors and of each committee of the Board on
which such director served. There were twelve regular and ten
special meetings of the Board of Directors in 1996.

Members of the Board of Directors receive $350.00 for each
board meeting they attend, and $250.00 for each committee
meeting they attend with the exception of inside directors who
receive no compensation for committee meetings.

NOTE: THE ABOVE COMMITTEES ARE COMMITTEES OF THE FARMERS
NATIONAL BANK OF CANFIELD (THE BANK), A WHOLLY OWNED SUBSIDIARY
OF FARMERS NATIONAL BANC CORP. CURRENTLY, THE MEMBERS OF
FARMERS' BOARD OF DIRECTORS ALSO SERVE AS THE DIRECTORS OF THE
BANK, AND ATTEND BOARD MEETINGS FOR BOTH FARMERS AND THE BANK.
ALTHOUGH THESE MEETINGS ARE CONDUCTED SEPARATELY ON THE SAME
DAY, A MEMBER RECEIVES COMPENSATION (WHICH IS PAID BY FARMERS)
FOR ONLY ONE MEETING, CONSEQUENTLY, MEMBERS ATTENDING A MEETING
OF THE BOARDS OF BOTH FARMERS AND THE BANK ON A SINGLE DAY ARE
CREDITED WITH ONE BOARD MEETING FOR ATTENDANCE AND COMPENSATION
PURPOSES.

RETIREMENT PENSION PLAN

The Corporation previously maintained a tax qualified Defined
Benefit Plan for the benefit of all eligible employees,
including all executive officers. This plan is identified as
"The Farmers National Bank of Canfield Salaried Employees
Pension Plan". Due to a change in the demographics of the
employee census and taking advantage of fixing future retirement
benefit expenses, the Corporation elected to freeze this plan as
of November 1, 1995, in accordance with the decision to
ultimately terminate this Pension Plan. This Defined Benefit
Plan is funded entirely by the Corporation. At the time of
application for termination, the Plan assets were adequate to
fund all the Plan liabilities. Upon approval from the necessary
authorities, all assets will be distributed to the Plan
participants. None of the assets of the Plan will revert back
to the Corporation and the Corporation will not have any
additional liability in connection with this Defined Benefit
Plan.

In May 1996, the Corporation adopted a 401(k) Profit Sharing
Retirement Savings Plan. All employees of Farmers National Bank
who have completed at least one year of service and meet certain
other eligibility requirements are eligible to participate in
the Plan. Under the terms of the Plan, employees may
voluntarily defer a portion of their annual compensation, not to
exceed 15%, pursuant to section 401(k) of the Internal Revenue
code. The Corporation 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 Corporation may
make an additional profit sharing contribution to Plan. The
Corporation's contributions are subject to a vesting schedule
and the Plan meets the requirements of Section 401(a) of the
Internal Revenue Code and Department of Labor Regulations under
ERISA.

<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>

Name and Principal Position Year Annual Salary Bonus 401(k) All Other
and Director Corporation Compensation
Fees (a) Contribution (b)
<S> <C> <C> <C> <C> <C>

William D. Stewart, Chairman 1996 129,543 0 7,126 3,382

1995 118,727 2,000 0 3,861

1994 107,950 2,000 0 1,505

Frank L. Paden, President & CEO 1996 86,318 0 4,749 1,038

1995 75,883 2,000 0 659

1994 71,380 2,000 0 887

<FN>
(a) The amount of Director Fees included in this annual amount
is as follows: Stewart ($8,250, $6,700 and $5,800) and Paden
($8,250, $6,700 and $5,800).

(b) Amounts represent cost of group term life insurance and
other benefits.
</FN>
</TABLE>

Listed is the total compensation paid by the Corporation's
subsidiary, The Farmers National Bank of Canfield during the
latest fiscal year to the named person(s) for services in all
capacities, specifically setting forth the direct compensation
to the Chairman and President & CEO. No other executive
officer of Farmers receives the total annual salary and bonus in
excess of $100,000.

In 1991, as a result of certain changes in the Internal Revenue
Code, the Bank's pension plan was amended to reduce
significantly the benefits of several key employees, including
those of Stewart and Paden. As a result, the Bank has entered
into Deferred Compensation Agreements with certain of its
executive officers, including Stewart and Paden. Under the
terms of the Deferred Compensation Agreement, they will receive
monthly payments of $1,665.00 (Stewart) and $930.00 (Paden) for
a period of two hundred and four (204) months, commencing with
retirement age of 65. This agreement also provides that these
executive officers will be available to perform consulting
services for the Bank during the period he is receiving these
payments, and prohibits him from entering into competition with
the Corporation during that same period. In the event that any
payments should still remain due and payable to the executive
officer under the Agreement at the time of his death, those
payments would be made to his surviving spouse. In the event
that any payment should still remain due and payable to either
the executive officer or his spouse under the Agreement at the
death of the survivor of them, those payments would be reduced
to their then present value at a predetermined rate of interest
and paid to the estate of the survivor in a lump sum. Payments
will be prorated in the event the employee retires before the
age of 65, and will be increased proportionately if he retires
after the age of 65. The Agreement is funded by a life
insurance policy owned by the bank, on which the Bank is the
beneficiary and the premiums of which are paid by the Bank.

NOTE: Tables containing disclosures of Stock Appreciation
Rights and Plans and Long Term Incentive Plans have been omitted
because no such programs exist for either Farmers National Banc
Corp. or The Farmers National Bank of Canfield.

No Employment Contracts or Golden Parachute Agreements exist
between any executive officer and either Farmers National Banc
Corp. or The Farmers National Bank of Canfield.

INDEBTEDNESS OF MANAGEMENT

Farmers has had, and expects to have in the future, banking
transactions in the ordinary course of business with directors,
executive officers and their associates on the same terms,
including interest rates and collateral on loans, as those
prevailing at the same time for comparable transactions with
others. Since the beginning of 1996, the largest aggregate
extensions of credit to officers, directors and their associates
during the year ended December 31, 1996 was $1,245,724 or 3.58%
of Equity Capital Accounts. In the opinion of the management of
Farmers, these transactions do not involve more than a normal
risk of collectability or present other unfavorable features.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors is made up
of all of the outside directors of Farmers. No officers of the
corporation sit on this committee. This committee reports back
to the full board but its' decisions are not subject to full
board approval. The committee has the purpose and
responsibility of providing the Bank, its staff and the
communities it serves with consistent long-term leadership of
the highest quality possible while protecting the interests of
the shareholders.

The committee sets the limits for increases in the aggregate
for all staff, reviews performance of executive officers and
sets their salaries for the coming year. In addition, any
incentive/bonus program is set by the board based on the
recommendation of the compensation committee.

The committee takes a straightforward approach to the review of
executives and bases its consideration of salaries on specific
job performance, contribution to target levels of growth,
profitability, stability, capital and return on equity (ROE) and
return on assets (ROA). Also considered is the executive's
contribution to the general success of the Bank and its business
plan and community standing, which cannot necessarily be
quantified in an appropriated manner but is weighted heavily in
a community bank, which is located exclusively in small
communities. Successful bank operations are contingent upon
accomplishment in all areas and integration with the business
community's direction and success in our market areas.
Executive performance must therefore be evaluated by using these
factors as well. Specific results of each executive's area of
responsibility are evaluated and considered, but would not be
appropriately discussed here as a matter of confidentiality.

The committee evaluates the President on the same basis as
other executive offices with weight being given to the
achievement of target levels of growth, capital and return on
equity and, in addition, specific target goals of the overall
strategic plan of the Bank. The accomplishment of meeting the
goals and targets are reflected in the Summary Compensation
Table.

The members of the Compensation Committee are Joseph O. Lane,
Chairman; Benjamin R. Brown, David C. Myers, Edward A. Ort and
Ronald V. Wertz. None has registered a disagreement with the
above report.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is currently or was at
any time during 1996, an officer or an employee of, or had an
employment agreement with the Corporation or the Bank. No
corporate or committee interlocks exist which require disclosure
under SEC regulations.

PERFORMANCE GRAPH

The Securities and Exchange Commission requires a line graph
comparing the cumulative annual shareholders return of the
Corporation, over a five year period against an overall stock
market index and an industry index, as presented below. The per
share price for each quarter, which is the price for each
quarterly dividend and is used in the calculations of this
graph, is established by the stock's market maker, Butler Wick
and Company of Youngstown, Ohio.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *

AMONG FARMERS NATIONAL BANC CORP., THE NASDAQ STOCK MARKET - US
INDEX AND THE NASDAQ BANKS INDEX

[PERFORMANCE GRAPH PAPER COPY MAILED TO SEC]

TOTAL RETURN GRAPH DATA

At December 31 1991 1992 1993 1994 1995 1996

Farmers National Banc Corp. 100 131 182 238 350 459

NASDAQ Stock Mkt-US 100 116 134 131 185 227

NASDAQ Bank 100 146 166 165 246 326

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has elected Hill, Barth and King to
serve as the corporation's independent public accountant for the
fiscal year ending December 31, 1997. Hill, Barth and King also
served as the corporation's independent public accountant for
the fiscal year ended December 31, 1996. Hill, Barth and King
is expected to have a representative present at the annual
meeting and will be available to respond to shareholders'
questions and if they desire, will have an opportunity to make
any statement they consider appropriate.

The 1996 Annual Report, including the required audited
financial statements of the Corporation and related financial
information, is enclosed with this proxy soliciting material.

SHAREHOLDER PROPOSALS

Any Shareholder proposal intended to be placed in the Proxy
Statement for the 1997 annual meeting to be held in March 1998
must be received by the Corporation no later than December 1,
1997. Written proposals should be sent to Carl D. Culp,
Executive Vice President and Treasurer, Farmers National Banc
Corp., 20 South Broad Street, P.O. Box 555, Canfield, Ohio
44406. Each proposal submitted should be accompanied by the
name and address of the shareholder submitting the proposal and
the number of shares owned. If the proponent is not a
shareholder of record, proof of beneficial ownership should also
be submitted. All proposals must be a proper subject for action
and comply with the proxy rules of the Securities and Exchange
Commission.

MISCELLANEOUS

The Board of Directors does not know of matters other than the
review of 1996 and the election of Directors to be acted upon at
the annual meeting. If any other matters should come before the
meeting, the proxy holders will vote upon them in accordance
with their best judgment. A copy of the Corporation's 1996
report filed with the Securities and Exchange Commission, on
Form 10-K, will be available without charge to shareholders upon
written request to Carl D. Culp, Executive Vice President and
Treasurer, Farmers National Banc Corp., 20 South Broad Street,
P.O. Box 555, Canfield, Ohio 44406.

BY ORDER OF THE BOARD OF DIRECTORS

FRANK L. PADEN, PRESIDENT & SECRETARY

FARMERS NATIONAL BANC CORP.

20 South Broad St., P.O. Box 555, Canfield, Ohio 44406

PROXY FOR ANNUAL MEETING
SOLICITED BY THE BOARD OF DIRECTORS

KNOW ALL MEN BY THESE PRESENT, that I, the Undersigned
Shareholder of Farmers National Banc Corp. of Canfield, Ohio, do
hereby nominate and appoint William D. Calhoun, Ronald V. Wertz
and David W. Yeany (no officer or employee of the Corporation
may be named as proxy) or any one of them (with full power to
act alone), my true and lawful attorney(s) with full owner of
substitution, for me and in my name, place and stead to vote all
the Common Stock of said Corporation standing in my name on its
books on February 28, 1997, at the annual meeting of its
Shareholders to be held at Colonial Catering, 429 Lisbon Street,
Canfield, Ohio 44406, on Thursday, March 27, 1997, at 3:30 P.M.,
Eastern Standard Time, or any adjournment thereof with all the
powers the undersigned would possess if personally present as
follows:

1. ELECTION OF DIRECTORS: Fixing the number of Directors to be
elected at eight (8) and the election of the eight (8) persons
listed in the Proxy Statement dated March 6, 1997 accompanying
the notice of said meeting.

FOR (all nominees except as indicated below) ______ WITHHOLD
AUTHORITY (as to all nominees) _____

To withhold your vote from certain nominees, strike a line through
their name.

Benjamin R. Brown, Richard L. Calvin, Joseph O. Lane,
David C. Myers, Edward A. Ort, Frank L. Paden,
William D. Stewart, Ronald V. Wertz

2. SUCH OTHER BUSINESS as may properly come before the meeting or
any adjournment thereof.

THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION
LISTED UNLESS OTHERWISE INDICATED. If any other business is
presented at said meeting, this Proxy shall be voted in
accordance with the recommendations of The Board of Directors.

The Board of Directors recommends a vote "For"
each of the listed propositions. This proxy is solicited on
behalf of The Board of Directors and may be revoked prior to its
exercise.

WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY
AS POSSIBLE (whether or not you plan to attend the meeting in
person).

IF YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY.
THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE.

DATED ________________________________________

NUMBER OF SHARES HELD_________________________

_______________________________________________

_______________________________________________
Signature of Shareholder(s) *

*When signing as attorney, executor, administrator, trustee or
guardian, please give full title. If more than one trustee, all
should sign. All joint others must sign.