As filed with the Securities and Exchange Commission on July 17, 2017May 13, 2022

Registration No. 333-217958333-

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

FORMS-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Farmers National Banc Corp.

(Exact name of Registrant as specified in its charter)

 

 

 

Ohio 60216022 34-1371693

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

20 South Broad Street, Canfield, Ohio 44406

(330)533-3341

(Address, including zip code, and telephone number, including area code, of Registrant’sregistrant’s principal executive offices)

 

 

Kevin J. Helmick

President and Chief Executive Officer

Farmers National Banc Corp.

20 South Broad Street, Canfield, Ohio 44406

(330)533-3341

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

J. Bret Treier, Esq.

Christopher J. Pycraft, Esq.

Vorys, Sater, Seymour and Pease LLP

50 S. Main Street

Suite 1200

Akron, Ohio 44308

Phone: (330) 208-1015

 Critchfield, Critchfield

Kenneth B. Tabach, Esq.

Hugh T. Wilkinson, Esq.

Silver, Freedman, Taff & Johnston, Ltd.

106 South MainTiernan LLP

3299 K Street,

225 North Market Street
N.W.

Suite 1100

Wooster, Ohio 44691
Akron, Ohio 44308Phone: (330) 264-4444
100

Washington, DC 20007

Phone: (330)(202) 208-1000295-4500

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement.Statement and upon completion of the merger described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule12b-2 of the Exchange Act. (Check one):Act:

 

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an “x” in the box to designate the appropriate rule provision relied upon in conducting this transaction:

☐  Exchange Act Rule13e-4(i)(Cross-Border Tender Offer)

☐  Exchange Act Rule14d-1(d)(Cross-Border Third Party Tender Offer)

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

 

 

 

THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WETHESE SECURITIES MAY NOT ISSUE THESE SECURITIESBE ISSUED UNTIL THE REGISTRATION STATEMENT IS EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

PRELIMINARY PROXY STATEMENT/PROSPECTUS

DATED JULY 17, 2017, PROSPECTUS—SUBJECT TO COMPLETIONCOMPLETION—DATED MAY 13, 2022

 

LOGO

LOGO

 

MERGER PROPOSAL – YOUR VOTE IS VERY IMPORTANT

Farmers National Banc Corp. (“Farmers”), FMNB Merger Subsidiary II,V, LLC, a newly-formed wholly-owned subsidiary of Farmers (“Merger Sub”), and Monitor Bancorp, Inc.Emclaire Financial Corp. (“Monitor”Emclaire”), have entered into an Agreement and Plan of Merger dated as of March 13, 201723, 2022 (the “Merger Agreement”), which provides for the merger of MonitorEmclaire with and into Merger Sub a newly-formed, wholly-owned subsidiary of Farmers (the “Merger”). Consummation of the Merger is subject to certain conditions, including, but not limited to, obtaining the requisite vote of the shareholders of MonitorEmclaire and the approval of the Merger by various regulatory agencies. A copy of the Merger Agreement is attached asAnnex BA to this proxy statement/prospectus.

Under the terms of the Merger Agreement, holders of Monitor common shares will be entitled to receive from Farmers, after the Merger is completed, merger consideration payable in the form of a combination of cash and Farmers common shares to be calculated as set forth in the Merger Agreement. Atat the effective time of the Merger, it is anticipated that each MonitorEmclaire common share will be converted into the right to receive, at the election of the holder of such Emclaire common share, either: (i) 57.82 Farmers2.15 common shares, without par value, of Farmers, or (ii) $769.38$40.00 in cash, subject to certain allocation procedures set forth in the Merger Agreement intended to ensure that 85%70% of the outstanding Monitorshares of Emclaire common sharesstock are converted into the right to receive Farmers common shares and 30% of the remaining outstanding Monitorshares of Emclaire common sharesstock are converted into the right to receive cash. The initial exchange ratio is equal to the amount of cash to be paid in the Merger for each Monitor common share divided by $13.3055, the twenty (20) day volume weighted average closing price of Farmers common shares ending on February 10, 2017. A final exchange ratio will be determined by dividing the cash amount to be paid in the Merger for a Monitor common share by the twenty (20) day volume weighted average closing price of Farmers common shares ending on the penultimate trading day preceding the effective date of the Merger. Under the terms of the Merger Agreement, the aggregate consideration to be paid to Monitor shareholders will be calculated based on Monitor’s consolidated tangible book value per share as of March 31, 2017, plus theafter-tax proceeds of the anticipated sale by Monitor of the entirety of its ownership interests in Lifetime Financial Advisors, LLC, d.b.a. the Monitor Wealth Group (collectively, the “Adjusted Shareholders’ Equity”). The Merger Agreement provides that the aggregate Merger consideration will not exceed 125% of the Adjusted Shareholders’ Equity (the “Maximum Amount”) and will not be less than 115% of the Adjusted Shareholders’ Equity (the “Minimum Amount”). The amount of cash to be received for a Monitor common share, however, will in each case be based upon the Maximum Amount. If, based upon the final exchange ratio, the aggregate Merger consideration would exceed the Maximum Amount or be less than the Minimum Amount, the final exchange ratio will be adjusted downward or upward as necessary. Based on the initial exchange ratio, the aggregate Merger consideration to be paid to Monitor common shareholders under the Merger Agreement is approximately $7,693,811. See “SUMMARY – What MonitorEmclaire shareholders will receive in the Merger.Merger” on page [●].

Farmers will not issue any fractional common shares in connection with the Merger. Instead, each holder of Monitorshares of Emclaire common sharesstock who would otherwise be entitled to receive a fraction of a Farmers common share (after taking into account all MonitorEmclaire common sharesstock owned by such holder at the effective time of the Merger) will receive cash (rounded to the nearest cent), without interest, in an amount equal to the Farmers fractional common share to which such holder would otherwise be entitled (rounded to the nearest thousandth when expressed in decimal form), multiplied by the volume-weighted average, rounded to the nearest one tenth of a cent, of the closing sale prices of Farmers common shares based on information reported by The NASDAQ StockCapital Market LLC (the “Nasdaq”(“NASDAQ”) for the five (5)consecutive full trading days ending on the penultimate trading day preceding the effective time.closing date.

MonitorEmclaire will hold a special meeting of its common shareholders to vote on the adoption and approval of the Merger Agreement. The special meeting of Monitor’sEmclaire’s common shareholders will be held virtually at: 9:00 a.m., local time, on Tuesday, August 8, 2017, at Des Dutch Essenhaus, Shreve, Ohio.[●], 2022.

At the special meeting, Monitor’sEmclaire’s common shareholders will be asked to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. The common shareholders will also be asked to approvevote on a proposal to amend Monitor’s Articles of Incorporationapprove, on a non-binding, advisory basis, the compensation that may be paid or become payable to eliminateEmclaire’s named executive officers that is based on or otherwise relates to the right of first refusal provisions contained in the Articles of IncorporationMerger (the “Emclaire compensation proposal”), and a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger.

This document is a proxy statement of MonitorEmclaire that it is using to solicit proxies for use at the special meeting of common shareholders to vote on the Merger. It is also a prospectus relating to Farmers’ issuance of its common shares in connection with the Merger. This proxy statement/prospectus describes Monitor’sEmclaire’s special meeting, the Merger proposal and other related matters. The solicitation will be by mail, telephone, and electronic means, the cost of which will be borne by Emclaire.

The board of directors of MonitorEmclaire has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommends that Monitor’sEmclaire’s common shareholders vote “FOR” the adoption and approval of the Merger Agreement, “FOR” the amendment of the Articles of IncorporationEmclaire compensation proposal and “FOR” the approval of the adjournment of the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement.

FarmersFarmers’ common shares are traded on the NasdaqNASDAQ under the symbol “FMNB.” On March 13, 2017,23, 2022, the date of execution of the Merger Agreement, the closing price of Farmers common shares was $13.40$17.02 per share. On July 14, 2017,[●], 2022, the closing price of Farmers common shares was $14.20$[●] per share. The value of Farmers common shares at the time of completion of the Merger could be greater than, less than or the same as the value of Farmers common shares on the date of this proxy statement/prospectus. We urge you to obtain current market quotations for Farmers common shares (trading symbol “FMNB”) and Emclaire common stock (trading symbol “EMCF”).

You are encouraged to read this document, including the materials incorporated by reference into this document, carefully. In particular, you should read the“Risk FactorsRISK FACTORS” section beginning on page 19[32] for a discussion of the risks related to the Merger and owning Farmers common shares after the Merger.

Whether or not you plan to attend the special meeting, you are urged to vote by completing, signing and returning the enclosed proxy card in the enclosed postage-paid envelope.

If you are a Monitor common shareholder as of June 30, 2017, the record date, and you do not vote your shares in favor of the adoption and approval of the Merger Agreement, under the Ohio General Corporation Law (“OGCL”), you will have the right to demand the fair cash value for your Monitor common shares. To exercise your “dissenters’ rights,” you must adhere to the specific requirements of the OGCL; see “DISSENTERS’ RIGHTS” on page 28 of this proxy statement/prospectus and the complete text of the applicable sections of the OGCL attached to this proxy statement/prospectus asAnnex A. No holder of Farmers common shares is entitled to exercise any rights of a dissenting shareholder under the OGCL.

Not voting by proxy or at the special meeting will have the same effect as voting against the adoption and approval of the Merger Agreement. We urge you to read carefully this proxy statement/prospectus, which contains a detailed description of the special meeting, the Merger proposal, Farmers common shares to be issued in the Merger and other related matters.

Sincerely,

Sincerely,

William C. Marsh

Chairman of the Board, President & Chief Executive Officer

Emclaire Financial Corp.

Joseph M. Wachtel

President

Monitor Bancorp, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Farmers common shares to be issued in the Merger or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the Merger described in this proxy statement/prospectus are not savings accounts, deposit accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other federal or state governmental agency.

This proxy statement/prospectus is dated July 17, 2017,[●], 2022, and it

is first being mailed or otherwise delivered to MonitorEmclaire common shareholders on or about July 21, 2017.[●], 2022.

MONITOR BANCORP, INC.EMCLAIRE FINANCIAL CORP.

13210 State Route 226612 Main Street

Big Prairie, Ohio 44611Emlenton, Pennsylvania 16373

Notice of Special Meeting of Shareholders

To be held on August 8, 2017[●], 2022

To the Shareholders of Monitor Bancorp, Inc.Emclaire Financial Corp.:

Notice is hereby given that a special meeting of the shareholders of Monitor Bancorp, Inc.Emclaire Financial Corp. (“Monitor”Emclaire”) will be held virtually at 9:00 a.m., local time on Tuesday, August 8, 2017, at Des Dutch Essenhaus, 176 North Market Street, Shreve, Ohio 44676,[●], 2022, for the purpose of considering and voting on the following matters:

 

 1.

A proposal to adopt and approve the Agreement and Plan of Merger dated as of March 13, 2017,23, 2022, by and among Monitor,Emclaire, Farmers National Banc Corp. and FMNB Merger Subsidiary II,V, LLC (the “Merger Agreement”);

 

 2.

A proposal to amend Monitor’s Articles of Incorporation priorapprove, on a non-binding, advisory basis, the compensation that may be paid or become payable to Emclaire’s named executive officers that is based on or otherwise relates to the closing of the Merger to eliminate the right of first refusal provisions set forth inAnnex C to this proxy statement/prospectusmerger (the “Right of First Refusal”“Emclaire compensation proposal”), subject to the condition subsequent that the Merger is consummated on the terms; and conditions contained in the Merger Agreement; provided, however, that in the event that the Merger is not consummated on the terms and conditions contained in the Merger Agreement, the amendment contemplated by this proposal shall not become effective, and the Right of First Refusal shall remain a provision of the Monitor Articles of Incorporation;

 

 3.

A proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Agreement and Plan of Merger; andMerger Agreement.

4.Any other business which properly comes before the special meeting or any adjournment or postponement of the special meeting. The board of directors of Monitor is unaware of any other business to be transacted at the special meeting.

HoldersEmclaire has decided to hold the special meeting in a virtual format only. Shareholders of record of Monitor common shares at the close of business on June 30, 2017,[●], 2022 may attend the virtual special meeting, vote and submit questions during the meeting. You may use your computer or mobile device to access the virtual special meeting on the Internet at https://web.lumiagm.com/294482803. The passcode for the special meeting, which is case sensitive is: emclaire2022. We encourage you to access the meeting prior to the start time to allow for ample time for the check-in process.

Holders of record of shares of Emclaire common stock at the close of business on [●], 2022, the record date, are entitled to notice of and to vote at the special meeting and any adjournment or postponement of the special meeting. The affirmative vote of the holders of not less than a majority of Monitor’s issued and outstanding common sharesthe votes cast by all Emclaire shareholders entitled to vote on the proposal at the special meeting, is required to adopt and approve the Agreement and Plan of Merger.Merger Agreement.

A proxy statement/prospectus and proxy card for the special meeting are enclosed. A copy of the Merger Agreement is attached asAnnex BA to the proxy statement/prospectus.

Your vote is very important, regardless of the number of Monitorshares of Emclaire common sharesstock you own. Please vote as soon as possible to ensure that your shares of common sharesstock are represented at the special meeting. If you are a holderTo assure that your shares of record, you may cast your vote in personEmclaire common stock will be voted at the special meeting, please indicate your voting instructions: (i) over the Internet at www.voteproxy.com, (ii) by telephone at 1-800-776-9437,or to ensure that your Monitor common shares are represented at the special meeting, you may vote your shares(iii) by completing signing and returningsigning the enclosed proxy card.card and returning it promptly in the enclosed, postage prepaid, addressed envelope. No additional postage is required if mailed in the United States. The giving of a proxy will not affect your right to vote during the meeting if you virtually attend the special meeting. If your shares are held in the name of a broker, bank, or other nominee, please follow the instructions on the voting instruction form furnished by such broker, bank, or other nominee.

The MonitorEmclaire board of directors recommends that you vote (1) “FOR””FOR” the adoption and approval of the Agreement and Plan of Merger,Merger; (2) “FOR””FOR” the conditional amendmentapproval of the Articles of Incorporation,Emclaire compensation proposal; and (3) “FOR” the proposal to adjourn the special meeting, if necessary, to solicit additional proxies.

By Order ofIf you have any questions regarding the Board of Directors,accompanying proxy statement/prospectus, please contact Alliance Advisors, Emclaire’s proxy solicitor, by calling 833-757-0767, or by email to emcf@allianceadvisors.com.

Joseph M. Wachtel

By Order of the Board of Directors,
LOGO
William C. Marsh
Chairman of the Board
President & Chief Executive Officer

President[●], 2022

Monitor Bancorp, Inc.

July 21, 2017

WHERE YOU CAN FIND MORE INFORMATION

Farmers is a publicly traded company that files annual, quarterly and other reports,This proxy statements and otherstatement/prospectus incorporates important business and financial information about Farmers National Banc Corp. (“Farmers”) and Emclaire Financial Corp. (“Emclaire”) from documents filed with the Securities and Exchange Commission (the “SEC”(“SEC”). that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You may readcan obtain any of the documents filed with or obtain copies of these documentsfurnished to the SEC by mailFarmers and Emclaire, respectively, at no cost from the public reference room ofSEC’s website at http://www.sec.gov or by requesting them in writing or by telephone at the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at(800) SEC-0330 for further information on the public reference room. Farmers also files reports and other information with the SEC electronically, and the SEC maintains a web site located at www.sec.gov containing this information.appropriate address below. Certain information filed by Farmers with the SEC is also available, without charge, through Farmers’ website at www.farmersbankgroup.com under the “Investor Relations” section. Certain information regarding Monitorfiled by Emclaire with the SEC is also available, without charge, through Monitor’sEmclaire’s website at http://monitorbank.com/.www.emclairefinancial.com under the “Investor Relations” section.

Farmers has filed with the SEC a registration statement on FormS-4 to register its common shares to be issued to MonitorEmclaire shareholders as part of the mergerMerger consideration. This document is a part of that registration statement. As permitted by SEC rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read and requestobtain a free copy of the registration statement, including any amendments, schedules and exhibits at the addresses set forth below. Statements contained in this document as to the contents of any contract or other documents referred to in this document are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the registration statement. This proxy statement/prospectus incorporates by reference important business and financial information about Farmers from documents filed with or furnished to the SEC, that are not included in or delivered with this proxy statement/prospectus. See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page 66. These documents are available, without charge, to you upon written or oral request at the applicable company’s address and telephone number listed below:

Farmers National Banc Corp.

20 South Broad Street

Canfield, Ohio 44406

Attention: Investor Relations

(330)533-3341

Emclaire Financial Corp.

612 Main Street

Emlenton, Pennsylvania 16373

Attention: Jennifer A. Poulsen, Secretary

(844) 767-2311

To obtain timely delivery of these documents, you must request the information no later than August 1[●], 2017,2022, five business days before the date of the Emclaire special meeting, in order to receive them before the Emclaire special meeting.

FarmersFarmers’ common shares are traded on the NasdaqThe NASDAQ Capital Market under the symbol “FMNB.” Emclaire’s common shares are traded on The NASDAQ Capital Market under the symbol “EMCF.”

Neither Farmers nor MonitorEmclaire has authorized anyone to provide you with any information other than the information included in this document and documents which are incorporated by reference. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this document and the documents incorporated by reference are accurate only as of their respective dates. Each of Farmers’ and Monitor’sEmclaire’s business, financial condition, results of operations and prospects may have changed since those dates. Neither the mailing of this proxy statement/prospectus to holders of Emclaire common stock nor the issuance by Farmers of shares of Farmers common stock in connection with the merger will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this proxy statement/prospectus regarding Farmers has been provided by Farmers and information contained in this proxy statement/prospectus regarding Emclaire has been provided by Emclaire.

See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page [●] for further information.

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

   1 

SUMMARY

   78 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA FOR FARMERS

   1517 

MARKET PRICE AND DIVIDENDSELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR EMCLAIRE

19

SUMMARY SELECTED PRO FORMA CONDENSED COMBINED DATA

22

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE MERGER

23

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET

25

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME

26

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

   1828

UNAUDITED COMPARATIVE PER SHARE DATA

31 

RISK FACTORS

   1932 

FORWARD-LOOKING STATEMENTS

   2237 

THE SPECIAL MEETING OF SHAREHOLDERS OF MONITOREMCLAIRE

   2439 

Time, Date and Place

   2439 

Matters to be Considered

   2439 

Record Date; Shares Outstanding and Entitled to Vote

   2439 

Votes Required; Quorum

   2440 

Solicitation and Revocation of Proxies

   2541 

PROPOSALS SUBMITTED TO MONITOREMCLAIRE SHAREHOLDERS

   2743 

Merger Proposal

   2743 

AmendmentAdvisory Approval of Articles of Incorporation ProposalExecutive Compensation to be Paid in the Merger

   2743 

Adjournment Proposal

   2843 

Other MatterMatters to Come Before the Special Meeting

   28

DISSENTERS’ RIGHTS

28

Rights of Dissenting Monitor Shareholders

2844 

THE MERGER

   3045 

The Proposed Merger and Subsidiary Bank Merger

   3045 

Background of the Merger

   3045 

Monitor’sEmclaire’s Reasons for the Merger

   3248 

Recommendation of the MonitorEmclaire Board of Directors

   3350 

Opinion of Monitor’sEmclaire’s Financial Advisor

   3351 

Farmers’ Reasons for the Merger

   4159 

Regulatory Approvals Required

   4259 

Interests of MonitorEmclaire’s Directors and Executive Officers in the Merger

   4259 

Ownership and Director Status Potentially Creates Conflicts of InterestGolden Parachute Compensation

   4263

Absence of Appraisal or Dissenters’ Rights

64 

Material U.S. Federal Income Tax Consequences of the Merger

   4365 

Accounting Treatment

   4769

Stock Exchange Listings

69 

Resale of Farmers Common Shares

   4769 

i

THE MERGER AGREEMENT

   4870 

Explanatory Note Regarding the Merger Agreement

70

Effects of the Merger

   4870 

Effective Time of the Merger

   4871 

Merger Consideration

   4871 

Covenants and Agreements

   4972 

Representations and Warranties

   5577 

Conditions to the Merger

   5780 

Termination; Termination Fee

   5981 

Effect of Termination

   6083 

Amendments, Extensions and Waivers

   6083 

Stock Market Listing

   6183 

Fees and Expenses

   6183 

i

COMPARISON OF CERTAIN RIGHTS OF MONITOREMCLAIRE SHAREHOLDERS AND FARMERS SHAREHOLDERS

   6284 

Quorum of Shareholders

   6284 

Call of Special Meeting of Shareholders

   6284 

Authorized Capital

   6284

Voting Rights

85 

Removal of Directors

   6285 

Pre-emptive Rights

   6385 

Amendment of Articles of Incorporation and Code of Regulations or Bylaws

   6385 

Votes Required to Approve Certain Transactions

   6386 

Provisions with Possible Anti-Takeover Effects

   6487 

INFORMATION ABOUT MONITOREMCLAIRE

   6588

Share Ownership of Certain Emclaire Beneficial Owners and Management

88

Description of Emclaire’s Business

89 

EXPERTS

   6690 

LEGAL MATTERS

   6690

EMCLAIRE FUTURE SUBMISSION OF SHAREHOLDER PROPOSALS

90 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

   6691 

ANNEX A Dissenters’ Rights Under Section  1701.85– Agreement and Plan of the Ohio General Corporation LawMerger

   A-1 

ANNEX B Agreement and Plan– Opinion of MergerRaymond James & Associates, Inc.

   B-1 

ANNEX C Right of First Refusal Provisions of Monitor Articles of Incorporation

C-1

ANNEX D Opinion of ProBank Austin

D-1

 

ii

QUESTIONS AND ANSWERS ABOUT THE MERGER

AND THE SPECIAL MEETING

The following are answers to certain questions that you may have regarding the special meeting. You are urged to read carefully the remainder of this document because the information in this section may not provide all of the information that might be important to you in determining how to vote. Additional important information is also contained in the appendices to, and the documents incorporated by reference in, this document.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

You are receiving this proxy statement/prospectus because Farmers National Banc Corp. (“Farmers”), FMNB Merger Subsidiary II,V, LLC (“Merger Sub”) and Monitor Bancorp, Inc.Emclaire Financial Corp. (“Monitor”Emclaire”) have agreed to merge under the terms of an Agreement and Plan of Merger dated as of March 13, 201723, 2022 (the “Merger Agreement”), attached to this proxy statement/prospectus asAnnex BA. Pursuant to the terms of the Merger Agreement, MonitorEmclaire will merge with and into Merger Sub, with Merger Sub as the surviving entity (the “Merger”). In order to complete the Merger, the common shareholders of MonitorEmclaire must vote to approve and adopt the Merger Agreement. Following the Merger, Merger Sub will be dissolved and liquidated,liquidated. At a later time as soon as practicable after the effective time of the Merger, and pursuant to the subsidiary bank merger agreement, The MonitorFarmers National Bank an Ohioof Emlenton (“Emlenton Bank”), a national banking association and wholly-owned subsidiary of Monitor (“Monitor Bank”),Emclaire, will merge with and into The Farmers National Bank of Canfield, a national banking association and wholly-owned subsidiary of Farmers (“Farmers Bank”), with Farmers Bank being the surviving entity.

This proxy statement/prospectus contains important information about the Merger and the special meetingsmeeting of the common shareholders of Monitor,Emclaire, and you should read it carefully. The enclosed voting materials allow you to vote your MonitorEmclaire common shares without attending the special meeting.

 

Q:

What will Monitor shareholdersholders of Emclaire common shares receive in the Merger?

 

A:Monitor common shareholders will receive a combination of cash and Farmers common shares in the Merger.

At the effective time of the Merger, it is anticipated that each MonitorEmclaire common share will be converted into the right to receive, at the election of the holder of such Emclaire common share, either:

 

57.82

2.15 Farmers common shares, or

 

$769.3840.00 in cash,

subject to certain allocation procedures set forth in the Merger Agreement that are intended to ensure that 85%70% of the outstanding MonitorEmclaire common shares are converted into the right to receive Farmers common shares and 30% of the remaining outstanding MonitorEmclaire common shares are converted into the right to receive cash.

The initial exchange ratio is equal toOn March 23, 2022, the amount of cash to be paid in the Merger for each Monitor common share divided by $13.3055, the twenty (20) day volume weighted average closing price of Farmers common shares ending on February 10, 2017. A final exchange ratio will be determined by dividing the cash amount to be paid in the Merger for a Monitor common share by the twenty (20) day volume weighted average closing price of Farmers common shares ending on the penultimate trading day preceding the effective date of the Merger. Under the terms of the Merger Agreement was executed, the aggregate consideration to be paid to Monitor shareholders will be calculated based on Monitor’s consolidated tangible book value per share as of March 31, 2017, plus theafter-tax proceeds of the anticipated sale by Monitor of the entirety of its ownership interests in Lifetime Financial Advisors, LLC, d.b.a. the Monitor Wealth Group (the “MWG Disposition”) (collectively, the “Adjusted Shareholders’ Equity”). The Merger Agreement provides that the aggregate Merger consideration will not exceed 125% of the Adjusted Shareholders’ Equity (the “Maximum Amount”) and will not be less than 115% of the Adjusted Shareholders’ Equity (the “Minimum Amount”). The amount of cash to be received for a Monitor common share, however, will in each case be based upon the Maximum Amount. If, based upon the final exchange ratio, the aggregate Merger consideration would exceed the Maximum Amount or be less than the Minimum Amount, the final exchange ratio will be adjusted downward or upward as necessary.

On March 13, 2017, which was the date of the public announcement of the proposed Merger, the closing price for Farmers common shares was $13.40,$17.02, which, after giving effect to the initial exchange ratio of 57.822.15 and the cash amount of $769.38,$40.00, would have an implied value of approximately $774.84$37.62 per MonitorEmclaire common share. Based on this price with respect to the stock consideration, and the cash consideration of $769.38 per share, the aggregate Merger consideration would exceed the Maximum Amount and, therefore, the final exchange ratio would be subject to adjustment, so that, upon completion of the Merger, a Monitor shareholder who receives stock for 85% of his or her common shares and receives cash for 15% of his or her common shares would receive total merger consideration with an implied value of approximately $769.38 per share. As of July 14, 2017,[●], 2022, the most reasonably practicable date prior to the mailing of this proxy statement/prospectus, the closing price for Farmers common shares was $14.20,$[●], which after giving effect to an adjusted exchange ratio of 54.18 as described above, had an implied value of approximately $769.38$[●] per MonitorEmclaire common share. Based on this price with respect to the stock consideration, and the cash consideration of $769.38$40.00 per share, upon completion of the Merger, a Monitoran Emclaire common shareholder who receives stock for 85%70% of his or her shares of common stockshares and receives cash for 15%30% of his or her common shares would receive total Merger consideration with an implied value of approximately $769.38$[●] per MonitorEmclaire common share.

All shares of Series C, Non-Cumulative Preferred Stock and Series D Non-Cumulative Preferred Stock of Emclaire issued and outstanding immediately prior to the effective time of the Merger will be redeemed by Emclaire and no Merger consideration and/or cash in lieu of fractional shares will be delivered in exchange for such shares. All Emclaire common shares that are owned directly by Emclaire or Farmers or any of its affiliates will be cancelled and cease to exist, and no Merger consideration and/or cash in lieu of fractional shares will be delivered in exchange for such shares.

Farmers will not issue any fractional common shares in connection with the Merger. Instead, each holder of MonitorEmclaire common sharesshareholder who would otherwise be entitled to receive a fraction of a Farmers common share (after taking into account all Emclaire common shares owned by such holder at the effective time of the Merger) will receive cash (rounded to the nearest cent), without interest, in lieuan amount equal to the Farmers fractional common share to which such holder would otherwise be entitled (rounded to the nearest thousandth when expressed in decimal form) multiplied by the average, rounded to the nearest one tenth of a fractional Farmers common share in an amount determined by reference tocent, of the closing sale prices of Farmers common shares based on theinformation reported by The NASDAQ StockCapital Market LLC (the “Nasdaq”(“NASDAQ”) for the five (5)consecutive full trading days ending on the penultimate trading day preceding the effectiveclosing date of the Merger.

 

Q:

Can I make an election to select the form of merger consideration I desire to receive?

 

A:

You will have the opportunity to elect the form of consideration to be received for your Emclaire common shares, subject to certain adjustment and allocation procedures set forth in the Merger Agreement. These procedures are intended to ensure that 85%70% of the outstanding MonitorEmclaire common shares will be converted into the right to receive Farmers common shares and 30% of the remaining outstanding MonitorEmclaire common shares will be converted into the right to receive cash. Therefore, your ability to receive the cash or share elections of your choice will depend on the elections of other MonitorEmclaire common shareholders. The allocation of the mix of consideration payable to MonitorEmclaire common shareholders in the Merger will not be known until Farmers tallies the results of the cash and share elections made by MonitorEmclaire common shareholders, which may not occur until shortly after the closing of the Merger.

It is unlikely that elections will be made in the exact proportions provided for in the Merger Agreement. As a result, the Merger Agreement describes procedures to be followed if MonitorEmclaire common shareholders in the aggregate elect to receive more or less of the Farmers common shares than Farmers has agreed to issue. These procedures are summarized below.

 

 • 

If Shares Are Oversubscribed: If MonitorEmclaire common shareholders elect to receive more Farmers common shares than Farmers has agreed to issue in the Merger, then all MonitorEmclaire common shareholders who have elected to receive cash or who have made no election will receive cash for their MonitorEmclaire common shares and all shareholders who elected to receive Farmers common shares will receive a pro rata portion of the available Farmers shares plus cash for those common shares not converted into Farmers common shares.

 

 • 

If Shares Are Undersubscribed: If MonitorEmclaire common shareholders elect to receive fewer Farmers common shares than Farmers has agreed to issue in the Merger, then all MonitorEmclaire common shareholders who have elected to receive Farmers common shares will receive Farmers common shares and those shareholders who elected to receive cash or who have made no election will be treated in the following manner:

 

If the number of common shares held by MonitorEmclaire common shareholders who have made no election is sufficient to make up the shortfall in the number of Farmers common shares that Farmers is required to issue, then all MonitorEmclaire common shareholders who elected cash will receive cash, and those shareholders who made no election will receive both cash and Farmers common shares in such proportion as is necessary to make up the shortfall.

those shareholders who made no election will receive both cash and Farmers common shares in such proportion as is necessary to make up the shortfall.

 

If the number of common shares held by MonitorEmclaire common shareholders who have made no election is insufficient to make up the shortfall, then all MonitorEmclaire common shareholders who made no election will receive Farmers common shares and those MonitorEmclaire common shareholders who elected to receive cash will receive cash and Farmers common shares in such proportion as is necessary to make up the shortfall.

No guarantee can be made that you will receive the amounts of cash and/or shares you elect. As a result of the allocation procedures and other limitations outlined in this document and the Merger Agreement, you may receive Farmers common shares or cash in amounts that vary from the amounts you elect to receive.

Q:

How do MonitorEmclaire common shareholders make their election to receive cash, Farmers common shares or a combination of both?

 

A:

Each MonitorEmclaire common shareholder of record will receive an election form and letter of transmittal, which you should complete and return, along with your MonitorEmclaire share certificate(s), or evidence of book-entry shares, according to the instructions printed on the form. The election deadline will be 5:00 p.m., Eastern Time, on August 10, 2017[●], 2022 (the “election deadline”“Election Deadline”). A copy of the election form and letter of transmittal is being mailed under separate cover on or about the date of this proxy statement/prospectus.

If you do not send in the election form with your share certificate(s) by the election deadline,Election Deadline, you will be treated as though you had not made an election.

 

Q:

Can I change my election?

 

A:

You may change your election at any time prior to the election deadlineElection Deadline by submitting to Computershare Investor ServicesInc. and Computershare Trust Company, N.A. (the “Exchange Agent”) written notice accompanied by a properly completed and signed, revised election form. You may revoke your election by submitting written notice to Computershare Investor Servicesthe Exchange Agent prior to the election deadlineElection Deadline or by withdrawing your share certificates or evidence of book-entry shares prior to the election deadline. MonitorElection Deadline. Emclaire common shareholders will not be entitled to change or revoke their elections following the election deadline.Election Deadline.

 

Q:

What happens if I do not make a valid election to receive cash or Farmers common shares?

 

A:

If you do not return a properly completed election form by the election deadlineElection Deadline specified in the election form, your MonitorEmclaire common shares will be considered“non-election shares” and will be converted into the right to receive the stockshare consideration or the cash consideration according to the allocation procedures specified in the Merger Agreement. Generally, in the event one form of consideration (cash or Farmers common shares) is undersubscribed in the Merger, that form of consideration will be allocated to the MonitorEmclaire common shares for which no election has been validly made before shares of common shareholders electing the oversubscribed form of consideration will be switched to the undersubscribed form of consideration pursuant to the proration and adjustment procedures. Accordingly, while electing one form of consideration will not guarantee you will receive that form for all of your MonitorEmclaire common shares, in the event proration is necessary electing shares will have a priority overnon-electing shares.

 

Q:

What are the material U.S. federal income tax consequences of the Merger to Monitor shareholders?holders of Emclaire common stock?

 

A:

The closing of the Merger is conditioned upon the receipt by each of Farmers and MonitorEmclaire of a legal opinion that the Merger will qualify as atax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code.Code of 1986, as amended (the “Internal Revenue Code”). However, the federal tax consequences of the Merger to a Monitoran Emclaire shareholder will depend primarily on whether a shareholder exchanges the shareholder’s Monitorshares of Emclaire common sharesstock solely for Farmers common shares, solely for cash or for a combination of Farmers common shares and cash. Monitor shareholdersHolders of Emclaire common stock who exchange their shares of common sharesstock solely for Farmers common shares shouldgenerally will not recognize a

gain or loss except with respect to cash received in lieu of a fractional Farmers common share. Monitor shareholdersHolders of Emclaire common stock who exchange their shares of common sharesstock solely for cash shouldgenerally will recognize a gain or loss on the exchange. Monitor shareholdersHolders of Emclaire common stock who exchange their shares of common sharesstock for a combination of Farmers common shares and cash may recognize a gain, but not any loss, on the exchange. The actual U.S. federal income tax consequences to Monitor shareholdersholders of Emclaire common stock of electing to receive cash, Farmers common shares or a combination of cash and stockshares will not be ascertainable at the time Monitor shareholderssuch holders make their election because it will not be known at that time how, or to what extent, the allocation and proration procedures will apply.

For a more detailed discussion of the material U.S. federal income tax consequences of the Merger, please see the section “The Merger “THE MERGER – Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 43.[●].

The consequences of the Merger to any particular MonitorEmclaire shareholder will depend on that shareholder’s particular facts and circumstances. Accordingly, you are urged to consult your tax advisor to determine the tax consequences of the Merger to you.

 

Q:

Does MonitorEmclaire anticipate paying any dividends prior to the effective date of the Merger?

 

A:

Yes. Under the terms of the Merger Agreement, MonitorEmclaire is permitted to pay to its common shareholders its usualregular quarterly dividends not exceeding $0.31 per common share, and customary cash dividend of no greater than $1.00 per share semi-annually. Subject to compliance with applicable law, Monitor plans to pay such a dividend.its preferred shareholders its regular semi-annual dividends.

 

Q:

When and where will the MonitorEmclaire special meeting of shareholders take place?

 

A:

The special meeting of shareholders of MonitorEmclaire will be held virtually at 9:00 a.m., local time, on Tuesday, August 8 2017, at Des Dutch Essenhaus, Shreve, Ohio.[●], 2022.

Shareholders of record at the close of business on [●], 2022 may attend the virtual special meeting, vote and submit questions during the meeting. You may use your computer or mobile device to access the virtual special meeting on the Internet at https://web.lumiagm.com/294482803. The passcode for the special meeting, which is case sensitive is: emclaire2022. We encourage you to access the meeting prior to the start time to allow for ample time for the check-in process.

Q:

Why is Emclaire holding a virtual meeting instead of a physical meeting?

A:

Virtual meetings embrace the latest technology to provide expanded access, improved communication and cost savings for shareholders. A virtual special meeting will enable more Emclaire shareholders to attend and participate in the special meeting since they can participate from any location around the world with Internet access. We also believe holding the special meeting virtually will help safeguard the health of all meeting participants in view of the concerns regarding the ongoing Coronavirus pandemic.

 

Q:

What matters will be considered at the MonitorEmclaire special meeting?

 

A:

The common shareholders of MonitorEmclaire will be asked to (1) vote to (1) adopt and approve the Merger Agreement; (2), vote approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to amend the Monitor Articles of Incorporation to eliminate the Right of First Refusal (the provisions of which are set forth inAnnex C), subjectEmclaire’s named executive officers that is based on or otherwise relates to the condition subsequent that the Merger is consummated on the terms(the “Emclaire compensation proposal”); and conditions contained in the Merger Agreement; (3) vote to approve the adjournment of the special meeting to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement; and (4) vote on any other business which properly comes before the special meeting.Agreement.

 

Q:

What does the Boardboard of Directorsdirectors of MonitorEmclaire recommend with respect to the matters to be considered at the special meeting?

 

A.Monitor’s

Emclaire’s board of directors has determined that the Merger Agreement is in the best interests of MonitorEmclaire and its shareholders and recommends that MonitorEmclaire common shareholders vote “FOR” the proposal to adopt and approve the Merger Agreement, “FOR” the Emclaire compensation proposal, to conditionally waive and amend the Monitor Articles of Incorporation with respect to the right of first refusal and “FOR” the proposal to adjourn the special meeting to solicit additional proxies if there are insufficient votes to adopt and approve the Merger Agreement.

 

Q:

Is my vote needed to adopt and approve the Merger Agreement and to approve the other matters?

 

A:

Yes. The adoption and approval of the Merger Agreement, pursuant to the OGCLPennsylvania Entity Transactions Law (“PAETL”) and as a condition precedent to the obligations of the parties to effect the Merger, requires

the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding and entitled to vote. In addition, the Merger Agreement requires that holders of not less than a majority of the Monitor common shares outstanding andvotes cast by all Emclaire shareholders entitled to vote who are not officers, directors or affiliates of Monitor must vote foron the adoption and approval ofproposal at the Merger Agreement as a condition preceding to the obligations of the parties to effect the Merger; provided, however, that this condition may be waived by all of the parties.special meeting.

As of [May 12], 2022, directors and executive officers of Emclaire beneficially owned an aggregate of [471,020] shares of Emclaire common stock, an amount equal to approximately [17.2]% of the outstanding shares of Emclaire common stock. Each of the directors of Emclaire, who, collectively, beneficially own shares of Emclaire common stock entitling them to cast 452,761 votes with respect to each proposal to be presented at the special meeting, entered into voting agreements with Farmers on March 23, 2022, pursuant to which they are required, subject to certain terms and conditions, to vote their Emclaire common shares in favor of the adoption and approval of the Merger Agreement.

In addition, the affirmative vote of a majority of the total votes present, in person or by proxy, at the special meeting is required to approve the Emclaire compensation proposal.

The special meeting may be adjourned, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement. The

affirmative vote of the holders of a majority of the Monitor common shares represented,total votes present, in person or by proxy, at the special meeting is required to adjourn the special meeting.

 

Q:

How do I vote?

 

A:

If you were the record holder of a Monitoran Emclaire common share as of June 30, 2017,[●], 2022, you may vote (i) via the Internet at www.voteproxy.com by following the instructions contained on that website, (ii) by telephone at 1-800-776-9437, (iii) by completing and signing the enclosed proxy card and returning it promptly in personthe enclosed, postage prepaid, addressed envelope, or (iv) by virtually attending the virtual special meeting and voting during the meeting. Proxies properly executed and delivered by shareholders (via the Internet, telephone or to ensure that your common shares are representedby mail as described above) and timely received by Emclaire will be voted at the special meeting in accordance with the instructions contained therein. If you mayauthorize a proxy to vote your shares over the Internet or by signing and returning the enclosedtelephone, you should not return a proxy card in the postage-paid envelope provided by Monitor.mail (unless you are revoking your previous proxy).

If you hold your shares in “street name” through an intermediary, such as a bank or broker, you must register in advance to attend and vote at the special meeting. To register in advance of the special meeting, you must first obtain a valid legal proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form. After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the special meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests can be mailed to:

American Stock Transfer & Trust Company LLC

Attn: Proxy Tabulation Department

6201 15th Avenue

Brooklyn, NY 11219

 

Q:

What will happen if I fail to vote or abstain from voting?

 

A:If you fail

The failure to return your proxy card or vote in person at the special meeting, will have no effect on the proposal to adopt and approve the Merger Agreement, the Emclaire compensation proposal or the proposal to adjourn the special meeting, if necessary, to solicit additional proxies. If you mark “ABSTAIN” on your proxy card or ballot at the special meeting with respect to the proposal to adopt and approve the Merger Agreement, it will have no effect on the same effect as a vote “AGAINST”voting on the proposal. If you fail to return your proxy card or vote in person at the special meeting or if you mark ““ABSTAIN”ABSTAIN” on your proxy card or ballot at the special meeting with respect to the Emclaire compensation proposal or the proposal to amend the Articles of Incorporation to eliminate the Right of First Refusal, it will have the same effect as a vote“AGAINST” the proposal. If you mark “ABSTAIN” on your proxy card or ballot with respect to the adjournment ofadjourn the special meeting, if necessary, to solicit additional proxies, it will have the same effect as a vote “AGAINST” the proposal. The failure to return your proxy card or vote in person, however, will have no effect on the proposal to adjourn the special meeting, if necessary, to solicit additional proxies.

Q:

How will my shares of common sharesstock be voted if I return a blank proxy card?

 

A:

If you sign, date and return your proxy card and do not indicate how you want your common shares to be voted, then your shares will be voted “FOR” the adoption and approval of the Merger Agreement, ““FOR”FOR” the amendment of the Articles of Incorporation to eliminate the Right of First RefusalEmclaire compensation proposal, and, if necessary, “FOR” the approval of the adjournment forof the special meeting to solicit additional proxies.

 

Q:

Can I change my vote after I have submitted my proxy?

 

A:Monitor common shareholders

An Emclaire shareholder who votes via the Internet or telephone or returns a proxy via mail may revoke a proxyit at any time before a voteit is takenvoted at the special meeting by: (i) filing adelivering written notice of revocation with Monitor’s President at 13210 State Route 226, Big Prairie, Ohio 44611;to Jennifer A. Poulsen, Secretary, Emclaire Financial Corp., 612 Main Street, Post Office Box D, Emlenton, Pennsylvania 16373, telephone: (844) 767-2311; (ii) executing and returning anothera later-dated proxy; (iii) voting again via the Internet or telephone, or (iv) attending the virtual special meeting and voting during the meeting after giving written notice to the Secretary of Emclaire. Only the latest dated written proxy, card withor Internet or telephone proxy submitted by a later date; or (iii) attendingshareholder prior to the special meeting and giving notice of revocation in person.will be counted.

Your attendance at the virtual special meeting will not, by itself, revoke your proxy.

 

Q:

If Imy shares are held in “street name,” will my bank, broker, or other nominee vote my shares for me?

A.

Your bank, broker, or other nominee will vote any shares you hold in “street name” only if you provide instructions to them on how to vote your shares. You should follow the directions provided by your bank, broker, or other nominee to vote your shares. If you do not favorprovide your bank, broker, or other nominee with instructions on how to vote your shares held in “street name,” they will not be permitted to vote your shares, and your shares will not be counted in determining the adoption and approvaloutcome of the Merger Agreement, what are my dissenters’ rights?proposals at the special meeting.

Q:

What will happen if Emclaire shareholders do not approve the advisory vote on executive compensation?

 

A:

Approval of this proposal is not a condition to the completion of the Merger. The vote is an advisory vote and will not be binding on Emclaire. Therefore, if the other requisite shareholder approvals are obtained, the executive compensation payable in connection with the Merger will still be paid as long as any other conditions applicable thereto occur.

Q:

What do I do if I receive more than one proxy statement/prospectus or set of voting instructions?

A:

If you hold shares directly as a record holder and also in “street name” or otherwise through a nominee, you may receive more than one proxy statement/prospectus and/or set of voting instructions relating to the special meeting. These should each be voted and/or returned separately in order to ensure that all of your shares are voted.

Q:

Are Emclaire common shareholders entitled to dissenters’ rights?

A:

No. In accordance with Section 1571(b) of the PAETL, the holders of a Monitor common shareholder ascorporation’s shares of June 30, 2017, the record date, and youany class do not vote your common shares in favor of the adoption and approval of the Merger Agreement and you do not return an unmarked proxy card, you will have the right under Section 1701.85 of the Ohio General Corporation Law (“OGCL”) to demand the fair cash value for your Monitor common shares. The right to make this demand is known as “dissenters’ rights.” To exercise your dissenters’ rights, you must deliver to Monitor a written demand fordissent and obtain payment of the fair cash value of yourthe shares before the voteif, on the Merger is takenrecord date fixed to determine the shareholders entitled to notice of and to vote at the special shareholders’ meeting. The demand for payment must include your address,meeting, the number and classshares are listed on a national securities exchange. Accordingly, because Emclaire is listed on NASDAQ, the holders of MonitorEmclaire common shares owned by you and the amount you claimare not entitled to be the fair cash value of the your Monitor common shares, and should be mailed to: Monitor Bancorp, Inc., Attention: President, 13210 State Route 226, Big Prairie, Ohio 44611. Monitor common shareholders who wish to exercise their dissenters’ rights must either: (i) vote againstin connection with the Merger or not return the proxy card, and (ii) deliver written demand for payment prior to the Monitor shareholder vote. For additional information regarding dissenters’ rights, see “DISSENTERS’ RIGHTS” on page 28 of this proxy statement/prospectus and the complete text of the applicable sections of the OGCL attached to this proxy statement/prospectus asAnnex A.Merger.

Q:

When is the Merger expected to be completed?

 

A:

We are working to complete the Merger as quickly as possible. We expect to complete the Merger early in the third quartersecond half of 2017,2022, assuming shareholder approvalsapproval and all applicable governmental approvals have been received by then and all other conditions precedent to the Merger have been satisfied or waived.

 

Q:

What happens if the Merger is not completed?

A:

If the Merger is not completed, Emclaire shareholders will not receive any consideration for their Emclaire common shares in connection with the Merger. Instead, Emclaire will remain an independent company. In addition, if the Merger Agreement is terminated in certain circumstances, a termination fee may be required to be paid by Emclaire to Farmers.

Q:

Should MonitorEmclaire shareholders send in their share certificates now?

 

A:

No. You should send your share certificates in pursuant to the election form according to the instructions printed on such form. If you do not submit the election form, either at the time of closing or shortly after the Merger is completed, the Exchange Agent for the Merger will send you a letter of transmittal with instructions informing you how to send in your share certificates to the Exchange Agent. You should use the letter of transmittal to exchange your Monitorcertificates for Emclaire common share certificatesshares for the Merger consideration. Do not send in your share certificates with your proxy form.

 

Q:

What do I need to do now?

 

A:

You should carefully review this proxy statement/prospectus, including its Annexes. If you are a Monitoran Emclaire common shareholder, please complete, sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope as soon as possible.possible or submit your vote via the Internet or telephone. By submitting your proxy, you authorize the individuals named in the proxy to vote your common shares at the special meeting of shareholders in accordance with your instructions.Your vote is very important. Whether or not you plan to attend the special meeting, please submit your proxy with voting instructions to ensure that your common shares will be voted at the special meeting.

 

Q:

Are there risks that I should consider in deciding whether to vote in favor of the Merger Agreement and the other proposals to be acted upon at the special meetings?meeting?

 

A:

Yes. You should read and carefully consider the risk factors set forth in the section of this proxy statement/prospectus entitled “Risk Factors”“RISK FACTORS” beginning on page 19.[32].

 

Q:

Who can answer my questions?

 

A:

If you have questions about the Merger or desire additional copies of this proxy statement/prospectus or additional proxy cards, please contact MonitorEmclaire as provided below:

Monitor Bancorp, Inc.Emclaire Financial Corp.

13210 State Route 226612 Main Street

Big Prairie, Ohio 44611Emlenton, Pennsylvania 16373

Attention: William C. Marsh, Chairman, President & Chief Executive Officer

Phone: (330)(844) 496-2981767-2311

If you have any additional questions about the Merger, need assistance in submitting your proxy or voting your shares of Emclaire common stock or need additional copies of this proxy statement/prospectus or the enclosed proxy card, please contact Alliance Advisors, Emclaire’s proxy solicitor, by calling toll-free at 833-757-0767, or by email to emcf@allianceadvisors.com.

SUMMARY

This summary highlights selected information from this proxy statement/prospectus. It does not contain all of the information that may be important to you. You should read carefully this entire document and its Annexes and all other documents to which this proxy statement/prospectus refers before you decide how to vote. In addition, we incorporate by reference important business and financial information about Farmers into this document. For a description of this information, see “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page 66.[●]. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document. Each item in this summary includes a page reference, where applicable, directing you to a more complete description of that item.

The Companies

Farmers National Banc Corp.

Farmers National Banc Corp.

20 South Broad Street

Canfield, Ohio 44406

Phone:(330) 533-3341

Farmers is a financial holding company andthat was organized as aone-bank holding company in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Farmers operates principally through its wholly-owned subsidiaries, Farmers Bank, Farmers Trust Company (“Farmers Trust”), National Associates, Inc. (“NAI”) and Farmers National Captive, Inc. (“Captive”). Farmers National Insurance, LLC (“Farmers Insurance”) and Farmers of Canfield Investment Co. (“FarmersInvestments or “Farmers Investments”) are wholly-owned subsidiaries of Farmers Bank. Farmers and its subsidiaries operate in the domestic banking, trust, retirement consulting, insurance and financial management industries.

Farmers’ principal business consists of owning and supervising its subsidiaries. Although Farmers’Farmers directs the overall policies of its subsidiaries, including lending practices and financial resources, mostday-to-day affairs are managed by their respective officers. Farmers and its subsidiaries had 441531 full-time equivalent employees at DecemberMarch 31, 2016.2022. Farmers’ business activities are managed and financial performance is primarily aggregated and reported in threetwo lines of business, the Bank segment the Trust segment and the Retirement Planning/ConsultingTrust segment.

Farmers Bank is a full-service national banking association engaged in commercial and retail banking mainly in Mahoning, Trumbull, Columbiana, Wayne, Holmes, Geauga, Cuyahoga, Medina, Summit, Portage and Stark Counties in Ohio and two locationsa location in Beaver County, Pennsylvania. Farmers Bank’s commercial and retail banking services include checking accounts, savings accounts, time deposit accounts, commercial, mortgage and installment loans, home equity loans, home equity lines of credit, night depository, safe deposit boxes, money orders, bank checks, automated teller machines, internet banking, travel cards, “E” Bond transactions, MasterCard and Visa credit cards, brokerage services and other miscellaneous services normally offered by commercial banks.

Farmers Bank faces significant competition in offering financial services to customers. Ohio has a high density of financial service providers, many of which are significantly larger institutions that have greater financial resources than Farmers Bank, and all of which are competitors to varying degrees. Competition for loans comes principally from savings banks, savings and loan associations, commercial banks, mortgage banking companies, credit unions, insurance companies and other financial service companies. The most direct competition for deposits has historically come from savings and loan associations, savings banks, commercial banks and credit unions. Additional competition for deposits comes fromnon-depository competitors such as the mutual fund industry, securities and brokerage firms and insurance companies.



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

National Associates, Inc. (“NAI”) of Cleveland, Ohio has been a part of Farmers since the 2013 acquisition. The acquisition was part of Farmers’ plan to increase the levels of noninterest income and to complement the existing retirement services that were already being offered through Farmers Trust. NAI operates from its office located in Rocky River, Ohio.

Farmers National Captive Inc. (“Captive”) was formed during 2016 and is a wholly-owned insurance subsidiary of Farmers that provides property and casualty insurance coverage to Farmers and its subsidiaries. Captive pools resources with thirteen othereleven similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not currently available or economically feasible in today’s insurance market place. Captive does not account for a material portion of the revenue of Farmers.

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

Farmers InvestmentInvestments was formed during 2014, with the primary purpose of investing in municipal securities. Farmers Investments is a subsidiary of Farmers Bank and does not account for a material portion of the revenue of Farmers Bank.

FarmersFarmers’ common shares are traded on the NASDAQ Stock Market LLC (the “Nasdaq”) under the symbol “FMNB”.“FMNB.” Farmers is subject to the reporting requirements underof the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, therefore, files reports, proxy statements and other information with the SEC. Further important business and financial information about Farmers is incorporated by reference into this proxy statement/prospectus. See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page 66[●] of this proxy statement/prospectus.

Monitor Bancorp, Inc.Emclaire Financial Corp.

Monitor Bancorp, Inc.Emclaire Financial Corp.

13210 State Route 226612 Main Street

Big Prairie, Ohio 44611Emlenton, Pennsylvania 16373

Phone: (844) (330) 385-9200767-2311

MonitorEmclaire isone-bank a Pennsylvania corporation and financial holding company that provides a full range of retail and commercial financial products and services to customers in western Pennsylvania through its wholly owned subsidiary bank, Emlenton Bank.

Emlenton Bank was organized in 1996 under1900 as a national banking association and is a financial intermediary whose principal business consists of attracting deposits from the lawsgeneral public and investing such funds in real estate loans secured by liens on residential and commercial properties, consumer loans, commercial business loans, marketable securities and interest-earning deposits. Emlenton Bank currently operates through a network of 19 retail branch offices in Venango, Allegheny, Butler, Clarion, Clearfield, Crawford, Elk, Jefferson and Mercer Counties, Pennsylvania. Emclaire and Emlenton Bank are headquartered in Emlenton, Pennsylvania.

Emlenton Bank is subject to examination and comprehensive regulation by the United States Office of the StateComptroller of Ohiothe Currency (“OCC”), which is Emlenton Bank’s chartering authority, and is registered under the BHCA. Monitor operates through its wholly-owned subsidiary, The MonitorFederal Deposit Insurance Corporation (“FDIC”), which insures customer deposits held by Emlenton Bank (“Monitor Bank”). Monitorto the full extent provided by law. Emlenton Bank is a full-service Ohio banking association engagedmember of the Federal Reserve Bank (the “FRB”) of Cleveland and the

Federal Home Loan Bank (“FHLB”) of Pittsburgh. Emclaire is a registered bank holding company pursuant to the BHCA and a financial holding company under the Gramm-Leach-Bliley Act of 1999 (“GLBA”) and is subject to regulation and examination by the FRB.

The principal lending activities of Emclaire are the origination of residential mortgage, commercial mortgage, commercial business and consumer loans. The majority of Emclaire’s loans are originated in banking through a single office located in Big Prairie, Holmes County, Ohio.and secured by property within Emclaire’s primary market area.

Monitor Bank offers commercial and retail banking services,Emclaire maintains an investment portfolio of securities such as checkingU.S. government agencies, mortgage-backed securities, collateralized mortgage obligations, municipal, corporate and equity securities. Investment decisions are made within policy guidelines as established by its board of directors.

Deposits are the primary source of Emclaire’s funds for lending and investing activities. Emclaire offers a wide variety of deposit account products to both consumer and commercial deposit customers, including time deposits, noninterest bearing and interest-bearing demand deposit accounts, savings accounts, time deposit accounts, commercial, mortgagedeposits and installment loans, home equity loans, home equity lines of credit, agricultural loans, money orders, bank checks, automated teller machines and other miscellaneous services normally offered by commercial and retail banks. Deposits and repayment of loan principal are Monitor Bank’s primarymarket accounts. Secondary sources of funds for lending activitiesare derived from loan repayments, investment maturities and borrowed funds. Loan repayments can be considered a relatively stable funding source, while deposit activity is greatly influenced by interest rates and general market conditions. Emclaire also has access to funds through other general business purposes. These funds are supplemented by Monitor borrowings.various sources.



Monitor Bank faces significant pressure in the financial services industry. Ohio has a high density of financial service providers, any of which are significantly larger institutions that have greater financial resources than Monitor Bank, and all of which are competitors to varying degrees. CompetitionEmclaire competes for loans, comes principally from savingsdeposits and customers with other commercial banks, savings and loan associations, commercial banks, mortgage banking companies, credit unions, insurance companies and other financial service companies. The most direct competition for deposits has historically come from savings and loan associations, savings banks, commercial banks and credit unions. Additional competition for deposits comes fromnon-depository competitors such as the mutual fund industry, securities and brokerage firmscompanies, mortgage companies, insurance companies, finance companies, money market funds, credit unions and insurance companies.other nonbank financial service providers.

Emclaire’s common shares are traded on NASDAQ under the symbol “EMCF.” Emclaire is subject to the reporting requirements of the Exchange Act, and, therefore, files reports, proxy statements and other information with the SEC. Further important business and financial information about Emclaire is incorporated by reference into this proxy statement/prospectus. See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page [●] of this proxy statement/prospectus.

The Merger Agreement (page 48)[●])

The Merger Agreement provides that, if all of the conditions are satisfied or waived, MonitorEmclaire will be merged with and into Merger Sub, with Merger Sub surviving. Thereafter, Merger Sub promptly will be dissolved and liquidated and, at a later time as soon as practicable as specified by Farmers Bank in its certificate of merger filed withand certified by the Office of the Comptroller of the Currency (the “OCC”) and the office of the Secretary of State of the State of Ohio, MonitorOCC, Emlenton Bank will be merged with and into Farmers Bank.Bank, with Farmers Bank surviving the subsidiary bank merger. The Merger Agreement is attached to this proxy statement/prospectus asAnnex BA and is incorporated in this proxy statement/prospectus by reference.We encourage you to read the Merger Agreement carefully, as it is the legal document that governs the Merger.

What MonitorEmclaire shareholders will receive in the Merger (page 48)[●])

Under the terms of the Merger Agreement, common shareholders of Monitor will be entitled to receive from Farmers, after the Merger is completed, Merger consideration payable in the form of a combination of cash and Farmers common shares to be calculated as set forth in the Merger Agreement. Atat the effective time of the Merger, it is anticipated that each MonitorEmclaire common share will be converted into the right to receive, at the election of the holder of such Emclaire common share, either: (i) 57.822.15 Farmers common shares, or (ii) $769.38$40.00 in cash, subject to the adjustment under certain circumstancesand allocation procedures set forth in the Merger Agreement. Following the Merger, MonitorEmclaire shareholders will own approximately 1.78%10.8% of the outstanding Farmers common shares. Additionally, while Monitor has historically paid a $1.00 per share semi-annual dividend, Farmers currently pays a $0.05$0.16 per share quarterly dividend. On a per share equivalent basis, Monitor common shareholders would receive a 478% increase in dividends.

Farmers will not issue any fractional common shares in connection with the Merger. Instead, each holder of MonitorEmclaire common sharesshareholder who would otherwise be entitled to receive a fraction of a Farmers common share (after

taking into account all MonitorEmclaire common shares owned by such holder at the effective time of the Merger) will receive cash (rounded to the nearest cent), without interest, in an amount equal to the Farmers fractional common share to which such holder would otherwise be entitled (rounded to the nearest thousandth when expressed in decimal form) multiplied by the volume-weighted average, rounded to the nearest one tenth of a cent, of the closing sale prices of Farmers common shares based on information reported by the NasdaqNASDAQ for the five (5)consecutive full trading days ending on the penultimate trading day preceding the effective time.

As of theclosing date of the Merger Agreement, there were no outstanding options to purchase Monitor common shares, and the Merger Agreement restricts the ability of Monitor to issue any additional such options.Merger.

Exchange of MonitorEmclaire shares (page 48)[●])

Once the Merger is complete, Computershare Investor Services,Inc. and Computershare Trust Company N.A., as exchange agent (the “Exchange Agent”), will mail you transmittal materials and instructions for exchanging your MonitorEmclaire common share certificates for Farmers common shares to be issued by book-entry transfer.



MonitorEmclaire special meeting of shareholders (page 24)[●])

A special meeting of common shareholders of MonitorEmclaire will be held virtually at 9:00 a.m., local time, on Tuesday, August 8, 2017, at Des Dutch Essenhaus, Shreve, Ohio,[●], 2022, for the purpose of considering and voting on the following matters:

 

a proposal to adopt and approve the Merger Agreement;

 

a proposal to amendapprove, on a non-binding, advisory basis, the Articles of Incorporationcompensation that may be paid or become payable to eliminateEmclaire’s named executive officers that is based on or otherwise relates to the Right of First Refusal;Merger (the “Emclaire compensation proposal”); and

 

a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement; and

Agreement.

any other business which properly comes before the special meeting or any adjournment or postponement of the special meeting. The Monitor board of directors is presently unaware of any other business to be transacted at the special meeting.

You are entitled to vote at the special meeting if you owned Monitorshares of Emclaire common sharesstock as of June 30, 2017.[●], 2022. As of June 30, 2017, a total[●], 2022, shares of 10,000 MonitorEmclaire common sharesstock entitled to [2,735,212] votes were outstanding and eligible to be voted at the special meeting.

Required votes (page 24)[●])

The adoption and approval of the Merger Agreement by Monitor,Emclaire, pursuant to Emclaire’s Amended and Restated Articles of Incorporation, the OGCLPAETL and as a condition precedent to the obligations of the parties to effect the Merger, requires the affirmative vote of the holders of not less than a majority of Monitor common shares outstanding and entitled to vote at the Monitor special meeting. In addition, the Merger Agreement requires that not less than a majority of the 1,572 Monitor common shares outstanding andvotes cast by all shareholders entitled to vote which are held by persons who are not officers, directors or affiliates of Monitor must be voted for the adoption and approval of the Merger Agreement as a condition precedent to the obligations of the parties to effect the Merger (“Approval by Nonaffiliated Shareholders”); provided, however, that this condition may be waived by all of the parties pursuant to a written instrument signed by each party. The Merger Agreement requires Monitor to use its best efforts to obtain the foregoing approvals. The approval ofon the proposal to amend the Articles of Incorporation to eliminate the Right of First Refusal requires the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding and entitled to vote at the Monitor special meeting. A quorum, consisting of the holders of a majority of the outstanding 10,000 common shares,votes which Emclaire shareholders are entitled to cast, must be present in person or by proxy at the special meeting before any action, other than the adjournment of the special meeting, can be taken. The affirmative vote of a majority of the total votes present in person or by proxy at the special meeting is required to approve the Emclaire compensation proposal. The special meeting may be adjourned, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement. The affirmative vote of the holders of a majority of the Monitor common shares represented,total votes present in person or by proxy at the special meeting is required to adjourn the special meeting, if necessary, to solicit additional proxies.meeting.

Ownership and Director Status Potentially Creates Conflicts of Interests (page 42)

As of the date of this proxy statement/prospectus, other than Mr. James Smail, Farmers and its directors, executive officers and affiliates beneficially owned no Monitor common shares. Other than the following Monitor directors, Mr. Smail, Mr. Miller and Mr. Sparr, Monitor and its directors, executive officers and affiliates beneficially owned no Farmers common shares.

Thus, Mr. Smail, Mr. Miller and Mr. Sparr each potentially have a conflict of interest in approving the Merger as a result of their ownership of shares of stock in both Monitor and Farmers.

Moreover, Mr. Smail is the largest individual shareholder of Farmers and Monitorpre-Merger, and is the Chairman of the board of directors of Monitor and the Vice Chairman of the board of directors of Farmers. As a result, Mr. Smail has been screened from substantially all Merger discussions in his capacity as a director and the Vice Chairman of the board of directors of Farmers and did not participate in the Farmers’ director approval of the Merger, and was excused from and did not participate in the vote of the Monitor’s director approval of the



Merger in order to reduce the appearance of impropriety and to avoid conflicts of interest in taking such actions in Mr. Smail’s capacity as a director for either institution involved in the Merger.

Recommendation to MonitorEmclaire shareholders (page 33)[●])

The board of directors of MonitorEmclaire unanimously approved the Merger Agreement and the proposal to amend the Articles of Incorporation.Agreement. The board of directors of MonitorEmclaire believes that the Merger and amending the Articles of Incorporation is in the best interests of MonitorEmclaire and its shareholders, and, as a result, the board of directors recommendrecommends that MonitorEmclaire common shareholders vote “FOR” the adoption and approval of the Merger Agreement, “FOR” the proposal to amendapproval of the Articles of Incorporation to eliminate the Right of First Refusalcompensation proposal, and “FOR” the proposal to adjourn the special meeting, if necessary and appropriate, to solicit additional proxies.

In reaching this decision, the board of directors of MonitorEmclaire considered many factors, which are described in the section captioned “THE MERGER – Background of the Merger” and “THE MERGER – Monitor’s Emclaire’s Reasons for the Merger” – beginning on page 30 and page 32, respectively,[●] of this proxy statement/prospectus.

Opinion of Monitor’sEmclaire’s Financial Advisor (page 33)[●])

In connection withAt the Merger, Monitor’s financial advisor, ProBank AustinMarch 23, 2022, meeting of the board of directors of Emclaire, representatives of Raymond James & Associates, Inc. (“ProBank”Raymond James”), delivered an rendered Raymond James’ oral opinion, on March 9, 2017,which was subsequently confirmed via theby delivery of a written opinion dated March 13, 2017, to the MonitorEmclaire board, of directors as to the fairness, from a financial point of view, ofdatedMarch 23, 2022, that the Merger consideration in the Merger to be received by the holders of MonitorEmclaire common shares. stock in the Merger pursuant to the Merger Agreement, based upon and subject to the qualifications, assumptions and other matters considered in connection with the preparation of its opinion as of such date, was fair as of such date, from a financial point of view, to the holders of Emclaire’s outstanding common stock.

The full text of the written opinion of Raymond James, dated March 23, 2022, which describessets forth, among other things, the procedures followed,various qualifications, assumptions made, matters considered, and qualifications and limitations on the scope of the review undertaken, by ProBank in preparing the opinion, is attached asAnnex DB to this document.The Raymond James provided its opinion was for the information and assistance of and was directed to, the MonitorEmclaire board of directors (in(solely in its capacity as such) in connection with, and for purposes of, its consideration of the Merger and the transactions contemplated thereby, and its opinion only addresses whether the Merger consideration to be received by the holders of Emclaire common stock in the Merger pursuant to the Merger Agreement was fair, from a financial termspoint of the Merger.view, to such holders. The opinion of Raymond James did not address the underlying business decision of MonitorEmclaire to engage in the Merger or enter into the Merger Agreement or constitute a recommendation to the Monitor boardany other term or aspect of directors in connection with the Merger and itAgreement or the transactions contemplated thereby. The Raymond James opinion does not constitute a recommendation to the Emclaire board of directors or any holder of MonitorEmclaire common sharesstock as to how the Emclaire board of directors, such shareholder or any other person should vote or otherwise act with respect to vote in connection with the proposed Merger or any other matter.

Material U.S. federal income tax consequences of the Merger (page 43)[●])

The parties intend for the Merger willto be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and it is a conditionCode. Tax opinions to the obligation each of Monitor and Farmers to completeeffect that the Merger that it receives a legal opinion to that effect. Each such tax opinion waswill be so treated were filed as an exhibitexhibits to the registration statement of which this proxy statement/prospectus is a part.part, and it is a condition to the obligation each of Emclaire and Farmers to complete the Merger that it receives a tax opinion to that effect on the closing date of the Merger. As a reorganization for U.S. federal income tax purposes (i) no gain or loss will be recognized by Farmers or MonitorEmclaire as a result of the Merger, (ii) Monitorholders of Emclaire common shareholdersstock who receive solely Farmers common shares (other than cash in lieu of a fractional Farmers common share) in exchange for shares of Emclaire common stock in the Merger will recognize no gain or loss with respect to the Farmers common shares received (other than with respect to the cash in lieu of a fractional Farmers common share), (iii) holders of Emclaire common stock who receive a combination of Farmers common shares and cash in exchange for shares of Emclaire common stock in the Merger generally will recognize gain (but not loss) in an amount not to exceed any cash received in exchange for Monitorshares of Emclaire common sharesstock in the Merger (other than any cash received in lieu of a fractional Farmers common share, as discussed below under the section entitled “THE MERGER –Material U.S. Federal Income Tax Consequences of the Merger – Cash in Lieu of Fractional Shares” beginning on page 46)[●]) and (iii) Monitor(iv) holders of Emclaire common shareholdersstock who exercise dissenters’ rights and receive solely cash in exchange for Monitorshares of Emclaire common sharesstock in the Merger generally will generally, recognize gain or loss equal to the difference between the amount of cash received and their tax basis in their shares.

All Monitor shareholdersholders of Emclaire common stock should read carefully the description under the section captioned “THE MERGER – Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 43[●] of this proxy statement/prospectus and should consult their own tax advisors concerning these matters. All Monitor shareholdersholders of

Emclaire common stock should consult their tax advisors as to the specific tax consequences of the Merger to them, including the applicability and effect of the alternative minimum tax, net investment income tax and any federal, state, local, foreignnon-U.S. or other tax laws.



Accounting Treatment (page [●])

The Merger will be accounted for under the acquisition method of accounting in accordance with generally accepted accounting principles in the United States.

Interests of Emclaire’s Directors and Executive Officers in the Merger (see page [●])

In considering the recommendation of the board of directors of Emclaire, Emclaire’s shareholders should be aware that the directors and executive officers of Monitor (page 42)

Officers and directors of MonitorEmclaire have employment and other compensation agreements or economic interests that give them interests in the Merger that are somewhat different from, or in addition to, theirthe interests as Monitor shareholders. Theseof Emclaire’s other shareholders generally. The board of directors of Emclaire was aware of these interests and agreementsconsidered them, among other matters, in approving the Merger Agreement and related transactions.

These interests include:

 

One shareholder (Mr. Smail) serves

a post-merger offer of employment by Farmers to William C. Marsh, the current President, Chief Executive Officer and Chairman of the Board of both Emclaire and Emlenton Bank;

an invitation for one director from Emclaire’s board of directors to serve on the boardsboard of directors of Farmers Farmers Trust, Monitorimmediately after the Merger and Monitor Bank, and isfor the largest individual shareholderremaining non-employee directors of Farmers and Monitorpre-Merger;Emclaire to serve on the Farmers-Emlenton Advisory Board, an advisory board to be established post-merger for the Pennsylvania region;

 

Payments

settlement agreements among Emclaire and Emlenton Bank with each of retention bonusesWilliam C. Marsh, Robert A. Vernick and Eric Gantz that provide that on the business day immediately prior to certainthe closing of the Merger, Messrs. Marsh, Vernick and Gantz’s current respective employment or change in control agreement will be cancelled in exchange for a lump sum cash payment on the business day prior to the closing of the Merger, with each of such executives expected to be retained by Farmers following completion of the Merger;

lump sum severance payments and change in control benefits to be provided to Jennifer A. Poulsen and Amanda L. Engles (executive officers of Emclaire and Emlenton Bank) upon completion of the Merger pursuant to their current change in control agreements;

lump sum change in control payments to be made to each of the executive officers of Monitor;Emclaire and Emlenton Bank pursuant to their current supplemental executive retirement plan agreements;

 

Continued employment that has been offered by Farmers

the acceleration of vesting of each outstanding share granted pursuant to Monitor’s Presidenta share award agreement issued prior to the date of the Merger Agreement in accordance with Emclaire’s 2014 Stock Incentive Plan or 2021 Stock Incentive Plan, which will be exchanged for the Merger consideration; and Vice President of Operations; and

 

Rights

the rights of Monitor OfficersEmclaire officers and directors under the Merger Agreement to continued indemnification coverage, and continued coverage under directors’ and officers’ liability insurance policies.policies, and indemnification provided under Emclaire’s Bylaws and the PAETL.

Monitor’s board of directors was awareFor a more complete description of these interests, see “THE MERGER — Interests of Emclaire’s Directors and considered themExecutive Officers in approving the Merger Agreement.Merger” beginning on page [●].

Absence of Dissenters’ rights of Monitor shareholders (page 28)Rights (see page [●])

Under Ohio law, Monitor common shareholders whoSection 1571(b) of the PAETL, the holders of a corporation’s shares of any class do not vote in favorhave the right to dissent and obtain payment of the adoptionfair value of the shares if, on the record date fixed to determine the

shareholders entitled to notice of and approvalto vote at the special meeting, the shares are listed on a national securities exchange. Accordingly, because Emclaire is listed on NASDAQ, the holders of Emclaire common shares and preferred shares (all of which will be redeemed by Emclaire immediately prior to the effective time of the Merger Agreement and deliver a written demand for payment for the fairno Merger consideration and/or cash valuein lieu of their Monitor commonfractional shares prior to the Monitor special meeting, will be delivered in exchange for such shares) are not entitled if and when the Merger is completed, to receive the fair cash value of their Monitor common shares. The right to make this demand is known as “dissenters’ rights.” Monitor shareholders’ right to receive the fair cash value of their Monitor common shares, however, is contingent upon strict compliancedissenters’ rights in connection with the procedures set forth in Section 1701.85 of the OGCL. A Monitor common shareholder’s failure to vote against the adoption and approval of the Merger Agreement will not constitute a waiver of such shareholder’s dissenters’ rights, so long as such shareholder does not vote in favor of the Merger Agreement or return an unmarked proxy card.Merger.

For additional information regarding dissenters’ rights, see “DISSENTERS’ RIGHTS” on page 28 of this proxy statement/prospectus and the complete text of Section 1701.85 of the OGCL attached to this proxy statement/prospectus asAnnex A. If Monitor common shareholders should have any questions regarding dissenters’ rights, such shareholders should consult with their own legal advisers.

Certain differences in shareholder rights (page 62)[●])

When the Merger is completed, MonitorEmclaire common shareholders (other than those exercising dissenters’ rights or receiving only cash) will receive Farmers common shares and, therefore, will become Farmers shareholders. As Farmers shareholders, the former MonitorEmclaire common shareholders’ rights will be governed by Farmers’ Amended Articles of Incorporation, as amended, and Regulations, as well as Ohio law. Notably, MonitorEmclaire common shareholders will own less on a percentage basis of the combined company and as such will have decreased voting power. For a summary of significant differences, see “COMPARISON OF CERTAIN RIGHTS OF MONITOREMCLAIRE SHAREHOLDERS AND FARMERS SHAREHOLDERS” beginning on page 62[●] of this proxy statement/prospectus.

Regulatory approvals required for the Merger (page 42)[●])

The Merger cannot be completed until Farmers receives necessary regulatory approvals or waivers of application, which include the approvalapprovals of the Board of Governors of the Federal Reserve, System (the “Federal Reserve”)the OCC and the approvalPennsylvania Department of the OCC.Banking and Securities (the “Pennsylvania Department”). Farmers has received[received/applied for] such approvals to consummate the Merger.



Conditions to the Merger (page 57)[●])

As more fully described in this proxy statement/prospectus and in the Merger Agreement, the completion of the Merger depends on the adoption and approval of the Merger Agreement by Monitor’sEmclaire’s common shareholders and receipt of the required regulatory approvals or waivers of application, in addition to satisfaction of, or where legally permissible, waiver of, other customary conditions. Although Farmers and MonitorEmclaire anticipate the closing of the Merger will occur early in the third quartersecond half of 2017,2022, neither Farmers nor MonitorEmclaire can be certain when, or if, the conditions to the Merger will be satisfied or, where permissible, waived, or that the Merger will be completed. SeeFor a summary of the conditions to the Merger, see “THE MERGER AGREEMENT – Conditions to the Merger” beginning on page 57[●] of this proxy statement/prospectus.

Termination; Termination Fee (page 59)[●])

The Merger Agreement may be terminated at any time prior to the effective time of the Merger, whether before or after approval of the Merger by MonitorEmclaire’s common shareholders:

 

by mutual written consent of Farmers and Monitor;Emclaire;

 

by either party, if a required governmental approval is denied by final,non-appealable action, or if a governmental entity has issued a final,non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the transactions contemplated by the Merger Agreement;

 

by either Farmers or Monitor,Emclaire, if the Merger has not closed on or before March 13, 2018,January 31, 2023, unless the failure to close by such date is due to the terminating party’s failure to observe the covenants and agreements of such party set forth in the Merger Agreement;

 

by either Farmers or Monitor,Emclaire, if there is a breach by the other party of any of its representations or warranties or any failure to perform in all material respects any of its covenants or agreements, or any of its representations or warranties that would, either individually or in the aggregate with other breaches by such party, result in, if occurring or continuing on the closing date, the failure of the conditions of the terminating party’s obligation to complete the Merger and which is not cured within thirty (30) days following written notice to the party committing such breach or by its nature or timing cannot be cured within such time period (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement);

would, either individually or in the aggregate with other breaches by such party, result in, if occurring or continuing on the closing date, the failure of the conditions of the terminating party’s obligation to complete the Merger and which is not cured within 30 days following written notice to the party committing such breach or by its nature or timing cannot be cured within such time period (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement);

 

by Farmers, if at any time prior to the effective time of the Merger, Monitor’sEmclaire’s board of directors has (1) failed to recommend to the shareholders of MonitorEmclaire that they vote to approve the Merger Agreement, (2) changed its recommendation with respect to the Merger Agreement, including by publicly approving, endorsing or recommending, or publicly proposing to approve, endorse or recommend, certain acquisition proposals other than the Merger Agreement, whether or not permitted by the Merger Agreement, or has resolved to do the same, or (3) materially breached itsnon-solicitation obligations orfailed to substantially comply with its obligations to recommend to the MonitorEmclaire shareholders the adoption of the Merger proposal and call a shareholder meeting for that purpose;purpose or its non-solicitation obligations;

 

by Farmers, if a tender offer or exchange offer for 15% or more of the outstanding MonitorEmclaire common shares is commenced (other than by Farmers or a subsidiary of Farmers), and Monitor’sEmclaire’s board of directors recommends that the shareholders of MonitorEmclaire tender their shares in such tender or exchange offer or otherwise fails to recommend that such shareholders reject such tender or exchange offer within ten (10) business days; or

 

by Emclaire, if Farmers fails to take the actions required in the Merger Agreement to (1) use commercially reasonable efforts to prepare and file with the SEC a registration statement on Form S-4 within 60 days of the Merger Agreement, use commercially reasonable efforts to have the Form S-4 declared effective under the Securities Act of 1933, as amended (the “Securities Act”) as promptly as practicable after such filing or use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to complete the Merger or (2) fails to cause the Farmers common shares to be issued in the Merger to be authorized for listing on NASDAQ, subject to official notice of issuance, prior to the effective time of the Merger;

by either Farmers or Monitor,Emclaire, if the MonitorEmclaire common shareholders do not vote to approve the Merger Agreement at a duly held shareholders meeting (including any adjournment or postponement of such meeting).; or

 

by Emclaire, if both of the following conditions are satisfied: (i) the average closing price of Farmers’ common shares for the 20 consecutive trading days ending on the tenth calendar day immediately prior to the effective time of the Merger is less than $13.616 (80% of the starting price of $17.02, as defined in the Merger Agreement), and (ii) a specified ratio of the sales prices of Farmers’ common shares is less than a specified index ratio of stocks of a bank peer group, unless Farmers elects to make an adjustment to the exchange ratio.



If the Merger Agreement is terminated under certain circumstances, including circumstances involving alternative acquisition proposals, MonitorEmclaire may be required to pay Farmers a termination fee of $300,000. If the Merger Agreement is terminated under certain other conditions, Farmers may be required to pay Monitor a termination fee of $100,000.$3,750,000. See “THE MERGER AGREEMENT – Termination; Termination Fee” beginning on page 59.[●].

Market Price and Dividend Information

Farmers’ common shares are traded on NASDAQ under the symbol “FMNB.” Emclaire’s common shares are traded on NASDAQ under the symbol “EMCF.” The following table sets forth for the periods indicated a summary of the high and low prices of and cash dividends paid on Emclaire common shares and Farmers

common shares. This information does not reflect retail mark-up, markdown or commissions and does not necessarily represent actual transactions.

 



   Emclaire   Farmers 
   High   Low   Dividends   High   Low   Dividends 

2022

            

First Quarter

  $38.50   $25.23   $0.31   $20.00   $16.19   $0.16 

Second Quarter (through [●])

   [●]    [●]    [●]    [●]    [●]    [●] 

2021

            

First Quarter

  $31.12   $25.60   $0.30   $18.26   $13.03   $0.11 

Second Quarter

   30.55    26.50    0.30    17.99    15.37    0.11 

Third Quarter

   30.39    26.02    0.30    16.03    14.57    0.11 

Fourth Quarter

   30.00    26.03    0.30    18.99    15.69    0.14 

2020

            

First Quarter

  $33.50   $20.92   $0.30   $16.50   $10.32   $0.11 

Second Quarter

   26.10    18.10    0.30    13.51    9.82    0.11 

Third Quarter

   28.35    20.40    0.30    12.59    10.05    0.11 

Fourth Quarter

   32.00    23.10    0.30    13.84    10.55    0.11 

On March 23, 2022, the last trading day prior to the announcement of the Merger, the closing price of Emclaire’s common shares was $29.00. The information presented in the following table reflects the last reported sale prices per share of Farmers’ common shares as of March 23, 2022, the last trading day prior to the announcement of the Merger Agreement, and on [●], 2022, the last practicable day for which information was available prior to the date of this proxy statement/prospectus. The table also presents the equivalent market value per Emclaire common share on March 23, 2022, and [●], 2022, determined by multiplying the share price of a Farmers common share on such dates by the exchange ratio of 2.15. No assurance can be given as to what the market price of Farmers’ common shares will be if and when the Merger is consummated.

   Farmers
Common Shares		   Equivalent Price Per
Emclaire Common Share		 

March 23, 2022

  $17.02   $36.59 

[●], 2022

  $[●]   $[●] 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA FOR FARMERS

The following table summarizes financial results achieved by Farmers for the periods and at the dates indicated and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”indicated. The information below has been derived from Farmers’ Consolidated Financial Statements and the notes to the Consolidated Financial Statements contained in reports that Farmers has previously filed with the SEC.Statements. Historical financial information for Farmers can be found in its Annual Report on Form10-K for the fiscal year ended December 31, 2016. 2021, as amended. The selected historical financial information for Farmers as of and for the three months ended March 31, 2022 and 2021, can be found in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. You should read the following financial information in conjunction with the historical Consolidated Financial Statements (and related notes), as well as the information contained under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained or incorporated by reference in Farmers’ annual reports on Form 10-K and quarterly reports on Form 10-Q and other information filed by Farmers with the SEC.

The selected operating data presented below are not necessarily indicative of the results that may be expected for future periods. See “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document for instructions on how to obtain the information that has been incorporated by reference. You should not assume the results of operations for past periods noted below indicate results for any future period.

The information below has been derived from Farmers’ Consolidated Financial Statements.SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA OF

FARMERS NATIONAL BANC CORP. (UNAUDITED)

(Dollars in thousands, except per share data) At March 31,  At December 31, 
 2022  2021  2021  2020  2019  2018  2017 

Selected Financial Data

       

Total assets

 $4,205,855  $3,324,524  $4,142,749  $3,071,148  $2,449,158  $2,328,864  $2,159,069 

Loans, net of allowance for credit losses(1)

  2,277,956   2,012,469   2,301,696   2,055,900   1,797,052   1,722,248   1,565,066 

Allowance for credit losses

  27,015   24,935   29,386   22,144   14,487   13,592   12,315 

Securities available for sale

  1,463,626   802,866   1,427,677   575,600   432,233   402,190   393,331 

Goodwill and other intangible assets

  102,187   49,301   102,606   49,617   42,645   43,952   45,369 

Total deposits

  3,693,811   2,833,054   3,547,235   2,610,878   2,008,964   1,799,720   1,604,719 

Total borrowings

  87,872   79,683   87,758   78,906   122,197   250,792   296,559 

Total stockholders’ equity

  393,886   347,355   472,432   350,097   299,309   262,320   242,074 

  For the Three Months
Ended March 31,		   For the Year
Ended December 31,		 
        2022              2021         2021   2020   2019   2018   2017 

Selected Operating Data:

            

Total interest income

 $33,279  $27,790   $116,459   $112,327   $101,986   $91,766   $80,527 

Total interest expense

  2,037   2,523    8,469    16,136    19,608    13,265    6,881 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

  31,242   25,267    107,990    96,191    82,378    78,501    73,646 

(Credit) provision for credit losses & unfunded loans

  (358)   425    4,893    9,100    2,450    3,000    3,350 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after credit loss expense

  31,600   24,842    103,097    87,091    79,928    75,501    70,296 

Total non-interest income

  17,698   10,132    38,193    36,161    28,042    25,098    23,738 

Total non-interest expense

  30,456   17,317    79,176    72,980    64,895    62,316    61,254 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

  18,842   17,657    62,114    50,272    43,075    38,283    32,780 

Income tax expense

  2,998   3,101    10,270    8,396    7,315    5,714    10,069 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

 $15,844  $14,556   $51,844   $41,876   $35,760   $32,569   $22,711 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA OF

FARMERS NATIONAL BANC CORP. (UNAUDITED)

 

  At March 31,  At December 31, 
(Dollars in thousands, except per share data) 2017  2016  2016  2015  2014  2013  2012 

Selected Financial Data:

       

Total assets

 $2,026,487  $1,860,307  $1,966,113  $1,869,902  $1,136,967  $1,137,326  $1,139,695 

Loans, net of allowance for loan losses(1)

  1,450,142   1,306,111   1,416,783   1,287,887   656,220   623,116   578,963 

Allowance for loan losses

  11,319   9,390   10,852   8,978   7,632   7,568   7,629 

Securities available for sale

  377,072   387,093   369,995   394,312   389,829   422,985   464,088 

Goodwill and other intangible assets

  44,789   42,574   45,154   42,911   8,813   10,343   6,032 

Total deposits

  1,540,220   1,445,882   1,524,756   1,409,047   915,703   915,216   919,009 

FHLB borrowings

  157,668   99,838   132,876   170,054   28,381   19,822   10,359 

Total stockholders’ equity

  218,062   203,982   213,216   198,047   123,560   113,007   120,792 

  As or For the Three Months
Ended March 31,		  As or For the Year
Ended December 31,		 
          2017                  2016          2016  2015  2014  2013  2012 

Selected Operating Data:

     

Total interest income

 $18,850  $17,747  $72,498  $53,827  $40,915  $40,959  $43,110 

Total interest expense

  1,319   1,000   4,378   4,090   4,579   5,063   6,212 

Net interest income

  17,531   16,747   68,120   49,737   36,336   35,896   36,898 

Provision for loan losses

  1,050   780   3,870   3,510   1,880   1,290   725 

Net interest income after provision for loan losses

  16,481   15,967   64,250   46,227   34,456   34,606   36,173 

Totalnon-interest income

  5,887   4,946   23,244   18,306   15,303   13,914   12,578 

Totalnon-interest expense

  14,613   14,444   59,452   53,979   38,162   39,057   35,764 

Income before income tax expense

  7,755   6,469   28,042   10,554   11,597   9,463   12,987 

Income tax expense

  1,972   1,671   7,485   2,499   2,632   1,683   3,055 

Net income

 $5,783  $4,798  $20,557  $8,055  $8,965  $7,780  $9,932 



  As or For the Three Months
Ended March 31,		  As or For the Year
Ended December 31,		 
          2017                  2016          2016  2015  2014  2013  2012 

Selected Operating Ratios and Other Data

       

Performance Ratios:

       

Return on average assets (annualized)

  1.17%   1.03%   1.07%   0.54%   0.79%   0.68%   0.89% 

Return on average equity (annualized)

  10.87%   9.41%   9.72%   4.97%   7.45%   6.66%   8.42% 

Average interest rate spread (tax equivalent) (2)

  3.92%   4.01%   3.94%   3.72%   3.48%   3.47%   3.66% 

Net interest margin (annualized)

  4.01%   4.07%   4.01%   3.81%   3.59%   3.58%   3.76% 

Non-interest expense/average assets

  2.92%   3.07%   3.09%   3.64%   3.34%   3.42%   3.20% 

Efficiency ratio

  58.79%   62.65%   61.59%   75.26%   70.24%   74.82%   69.94% 

Capital Ratios:

       

Common equity tier 1 capital ratio

  11.79%   11.82%   11.69%   11.59%   N/A   N/A   N/A 

Total risk based capital ratio

  12.51%   12.63%   12.53%   12.37%   16.48%   16.26%   17.35% 

Tier 1 risk based capital ratio

  11.79%   11.97%   11.83%   11.74%   15.43%   15.19%   16.18% 

Tier 1 leverage ratio

  9.37%   9.34%   9.41%   9.21%   10.03%   9.36%   9.54% 

Equity to assets

  10.76%   10.96%   10.84%   10.59%   10.87%   9.94%   10.60% 

Tangible common equity to tangible assets

  8.74%   8.88%   8.75%   8.50%   10.17%   9.11%   10.12% 

Asset Quality Ratios:

       

Nonperforming assets/total assets

  0.34%   0.55%   0.44%   0.61%   0.76%   0.81%   0.75% 

Non-performing loans/total loans

  0.45%   0.74%   0.57%   0.81%   1.28%   1.44%   1.40% 

Allowance for loan losses/nonperforming loans

  172.73%   96.70%   132.83%   85.96%   89.99%   83.25%   93.01% 

Allowance for loan losses as a percent of loans

  0.77%   0.71%   0.76%   0.69%   1.15%   1.20%   1.30% 

Share Data:

       

Basic earnings per common share

 $0.21  $0.18  $0.76  $0.36  $0.48  $0.41  $0.53 

Diluted earnings per common share

  0.21   0.18   0.76   0.36   0.48   0.41   0.53 

Dividends per common share

  0.05   0.04   0.16   0.12   0.12   0.12   0.18 

Book value per share

  8.06   7.58   7.88   7.35   6.71   6.02   6.43 

Tangible book value per share

  6.40   5.99   6.21   5.76   6.23   5.47   6.11 

Market price at period end

  14.35   8.91   14.20   8.60   8.35   6.55   6.20 

Weighted average common shares outstanding –basic

  27,278,314   27,047,168   27,180,230   22,678,338   18,674,526   18,773,491   18,791,843 

Weighted average common shares outstanding –diluted

  27,340,982   27,057,838   22,209,338   22,683,570   18,675,416   18,773,491   18,791,843 



  At or For the Three Months

Ended March 31,		  For the Year Ended December 31, 
  2022  2021  2021  2020  2019  2018  2017 

Selected Operating Ratios and

Other Data

       

Performance Ratios:

       

Return on average assets (annualized)

  1.52%   1.87%   1.52%   1.46%   1.50%   1.46%   1.09% 

Return on average equity (annualized)

  13.89%   16.81%   13.64%   12.80%   12.56%   13.13%   9.92% 

Average interest rate spread (tax equivalent)(2)

  3.17%   3.40%   3.35%   3.49%   3.53%   3.66%   3.88% 

Net interest margin (annualized)

  3.27%   3.54%   3.45%   3.70%   3.82%   3.87%   3.99% 

Efficiency ratio

  61.36%   48.24%   51.13%   52.55%   56.38%   57.77%   59.54% 

Capital Ratios:

       

Common equity tier 1 capital ratio

  13.31%   13.49%   13.16%   13.22%   12.94%   12.16%   11.86% 

Total risk based capital ratio

  17.59%   15.10%   17.60%   14.72%   13.82%   13.03%   12.73% 

Tier 1 risk based capital ratio

  13.95%   13.93%   13.82%   13.67%   13.06%   12.28%   11.99% 

Tier 1 leverage ratio

  9.56%   9.69%   10.12%   9.77%   10.69%   9.91%   9.50% 

Equity to assets

  9.37%   10.45%   11.40%   11.40%   12.22%   11.26%   11.21% 

Tangible common equity to tangible assets

  7.11%   9.10%   9.15%   9.94%   10.67%   9.56%   9.31% 

Asset Quality Ratios:

       

Non-performing assets/total assets

  0.33%   0.35%   0.39%   0.45%   0.26%   0.33%   0.36% 

Non-performing loans/total loans

  0.61%   0.57%   0.69%   0.67%   0.35%   0.45%   0.49% 

Allowance for credit losses/nonperforming loans

  192.33%   214.22%   181.45%   160.06%   228.32%   175.81%   160.04% 

Allowance for credit losses as a percent of loans

  1.17%   1.22%   1.26%   1.07%   0.80%   0.78%   0.78% 

Share Data:

       

Basic earnings per common share

  $    0.47   $    0.52   $    1.78   $    1.48   $1.29   $    1.18   $    0.82 

Diluted earnings per common share

  0.47   0.51   1.77   1.47   1.28   1.16   0.82 

Dividends per common share

  0.16   0.11   0.47   0.44   0.38   0.30   0.22 

Book value per share

  11.58   12.30   13.94   12.42   10.82   9.44   8.79 

Tangible book value per share

  8.58   10.56   10.91   10.66   9.28   7.86   7.14 

Market price at period end

  17.06   16.70   18.55   13.27   16.32   12.74   14.75 

Weighted average common shares outstanding – basic

  33,820,485   28,215,772   29,167,357   28,266,509   27,734,994   27,674,705   27,567,909 

Weighted average common shares outstanding – diluted

  33,936,938   28,336,139   29,279,787   28,393,996   27,875,984   27,974,185   27,619,076 

Note: All performance ratios are based on average balance sheet amounts where applicable.

(1)

Loans do not include loans held for sale, which are not material.

(2)

Represents the difference between the weighted average yield on average interest-earninginterest-earnings assets and the weighted average cost of interest-bearing liabilities.

 

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity:

       

Stockholders’ Equity

 $218,062  $203,982  $213,216  $198,047  $123,560  $113,007  $120,792 

Less Goodwill and Other Intangibles

  44,789   42,574   45,154   42,911   8,813   10,343   6,032 

Tangible Common Equity

  173,273   161,408   168,062   155,136   114,747   102,664   114,760 

Reconciliation of Total Assets to Tangible Assets:

       

Total Assets

 $2,026,487  $1,860,307  $1,966,113  $1,869,902  $1,136,967  $1,137,326  $1,139,695 

Less Goodwill and Other Intangibles

  44,789   42,574   45,154   42,911   8,813   10,343   6,032 

Tangible Assets

  1,981,698   1,817,733   1,920,959   1,826,991   1,128,154   1,126,983   1,133,663 

Reconciliation of Stockholders’ Equity to Tangible Common Equity

       

Stockholders’ Equity

 $393,886  $347,355  $472,432  $350,097  $299,309  $262,320  $242,074 

Less Goodwill and Other Intangibles

  102,187   49,301   102,606   49,617   42,645   43,952   45,369 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Tangible Common Equity

 $291,699  $298,054  $369,826  $300,480  $256,664  $218,368  $196,705 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Reconciliation of Total Assets to Tangible Assets

       

Total Assets

 $4,205,855  $3,324,524  $4,142,749  $3,071,148  $2,449,158  $2,328,864  $2,159,069 

Less Goodwill and Other Intangibles

  102,187   49,301   102,606   49,617   42,645   43,952   45,369 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Tangible Assets

 $4,103,668  $3,275,223  $4,040,143  $3,021,531  $2,406,513  $2,284,912  $2,113,700 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 


MARKET PRICE AND DIVIDEND INFORMATIONSELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR EMCLAIRE

Farmers common shares are traded on the Nasdaq under the symbol “FMNB.” A summary of the high and low prices of and cash dividends paid on Farmers common sharesThe following table summarizes financial results achieved by Emclaire for the first two quartersperiods and at the dates indicated. The information below has been derived from Emclaire’s Consolidated Financial Statements. Historical financial information for Emclaire can be found in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The selected historical financial information for Emclaire as of 2017 and for the fiscal years ending 2016three months ended March 31, 2022 and 2015 follows. This2021, can be found in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. You should read the following financial information in conjunction with the historical Consolidated Financial Statements (and related notes), as well as the information contained under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained or incorporated by reference in Emclaire’s annual reports on Form 10-K and quarterly reports on Form 10-Q and other information filed by Emclaire with the SEC.

The selected operating data presented below are not necessarily indicative of the results that may be expected for future periods. See “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document for instructions on how to obtain the information that has been incorporated by reference. You should not assume the results of operations for past periods noted below indicate results for any future period.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

OF EMCLAIRE FINANCIAL CORP. (UNAUDITED)

(Dollars in thousands, except per share data) At March 31,   At December 31, 
 2022   2021   2021   2020   2019   2018   2017 

Selected Financial Data

             

Total Assets

 $1,057,572   $1,067,711   $1,059,508   $1,032,323   $915,296   $898,875   $750,084 

Loans, net of allowance for loan losses(1)

  794,932    785,503    780,010    800,338    695,348    708,664    577,234 

Allowance for loan losses

  10,268    9,685    10,393    9,580    6,556    6,508    6,127 

Securities available for sale

  166,160    141,884    186,275    113,056    120,126    97,725    101,167 

Goodwill and other intangible assets

  20,321    20,504    20,359    20,543    20,707    20,871    10,769 

Total deposits

  935,956    926,227    918,496    893,627    787,124    761,546    654,643 

Total borrowings

  18,050    32,050    22,050    32,050    28,550    45,350    26,000 

Total stockholders’ equity

  86,662    90,870    96,959    91,480    85,858    80,008    59,091 

  For the Three Months
Ended March 31,		   For the Year Ended December 31, 
        2022              2021         2021   2020   2019   2018   2017 

Selected Operating Data:

            

Total interest income

 $8,667  $9,098   $36,581   $37,147   $36,145   $30,962   $26,400 

Total interest expense

  927   1,446    5,124    8,062    8,083    5,386    4,493 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

  7,740   7,652    31,457    29,085    28,062    25,576    21,907 

(Credit) provision for loan losses

  (80)   275    1,066    3,247    715    1,280    903 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

  7,820   7,377    30,391    25,838    27,347    24,296    21,004 

Total non-interest income

  1,007   1,052    4,590    4,363    4,391    4,208    5,022 

Total non-interest expense

  5,873   5,814    22,596    22,018    22,122    23,660    19,635 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax expense

  2,954   2,615    12,385    8,183    9,616    4,844    6,391 

Income tax expense

  518   441    2,214    1,435    1,662    633    2,114 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  2,436   2,174    10,171    6,748    7,954    4,211    4,277 

Preferred stock dividends

  —     —      196    186    182    91    —   
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to common stockholders

 $  2,436  $  2,174   $9,975   $6,562   $7,772   $4,120   $4,277 
 

 

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

OF EMCLAIRE FINANCIAL CORP. (UNAUDITED)

  At or For the Three Months

Ended March 31,		  For the Year Ended December 31, 
  2022  2021  2021  2020  2019  2018  2017 

Selected Operating Ratios and Other Data

       

Performance Ratios:

       

Return on average assets (annualized)

  0.93%   0.86%   0.95%   0.68%   0.88%   0.53%   0.59% 

Return on average equity (annualized)

  10.46%   9.63%   10.90%   7.61%   9.50%   6.56%   7.52% 

Average interest rate spread (tax equivalent)(2)

  3.04%   3.04%   2.97%   2.90%   3.09%   3.27%   3.11% 

Net interest margin (annualized)

  3.18%   3.24%   3.15%   3.16%   3.35%   3.47%   3.29% 

Efficiency ratio

  66.33%   66.13%   62.20%   66.32%   67.39%   77.99%   71.49% 

Capital Ratios:

       

Common equity tier 1 capital ratio

  11.86%   11.45%   11.86%   11.45%   12.62%   11.82%   11.73% 

Total risk based capital ratio

  13.11%   12.71%   13.11%   12.71%   13.74%   12.93%   12.96% 

Tier 1 risk based capital ratio

  11.86%   11.45%   11.86%   11.45%   12.62%   11.82%   11.73% 

Tier 1 leverage ratio

  8.18%   7.58%   7.98%   7.58%   8.17%   7.95%   7.71% 

Equity to assets

  8.19%   8.51%   9.15%   8.86%   9.38%   8.90%   7.88% 

Tangible common equity to tangible assets

  5.99%   6.32%   6.97%   6.60%   6.81%   6.26%   6.54% 

Asset Quality Ratios:

       

Non-performing assets/total assets

  0.41%   0.34%   0.32%   0.43%   0.34%   0.42%   0.56% 

Non-performing loans/total loans

  0.53%   0.46%   0.42%   0.51%   0.41%   0.42%   0.63% 

Allowance for loan losses/nonperforming loans

  239.74%   266.51%   311.26%   233.54%   225.52%   214.93%   165.91% 

Allowance for loan losses as a percent of loans

  1.28%   1.22%   1.31%   1.18%   0.93%   0.91%   1.05% 

Share Data:

       

Basic earnings per common share

  $    0.89   $    0.80   $    3.66   $    2.42   $    2.88   $    1.73   $    1.95 

Diluted earnings per common share

  0.88   0.79   3.63   2.41   2.86   1.72   1.93 

Dividends per common share

  0.31   0.30   1.20   1.20   1.16   1.12   1.08 

Book value per share

  30.15   31.85   33.91   32.07   30.14   28.09   26.02 

Tangible book value per share

  22.72   24.31   26.47   24.52   22.50   20.35   21.28 

Market price at period end

  37.52   28.99   28.90   30.63   32.53   30.34   30.35 

Weighted average common shares outstanding – basic

  2,735,212   2,721,212   2,722,133   2,709,532   2,699,397   2,377,277   2,197,440 

Weighted average common shares outstanding – diluted

  2,757,354   2,740,189   2,748,553   2,727,347   2,718,746   2,395,677   2,214,568 

Note: All performance ratios are based on average balance sheet amounts where applicable.

(1)

Loans do not include loans held for sale, which are not material.

(2)

Represents the difference between the weighted average yield on average interest-earnings assets and the weighted average cost of interest-bearing liabilities.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

OF EMCLAIRE FINANCIAL CORP. (UNAUDITED)

Reconciliation of Stockholders’ Equity to Tangible Common Equity

       

Stockholders’ Equity

 $86,662  $90,870  $96,959  $91,480  $85,858  $80,008  $59,091 

Less Preferred Stock

  4,206   4,206   4,206   4,206   4,206   4,206   —   

Less Goodwill and Other Intangibles

  20,321   20,504   20,359   20,543   20,707   20,871   10,769 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Tangible Common Equity

 $62,135  $66,160  $72,394  $66,731  $60,945  $54,931  $48,322 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Reconciliation of Total Assets to Tangible Assets

       

Total Assets

 $1,057,572  $1,067,711  $1,059,508  $1,032,323  $915,296  $898,875  $750,084 

Less Goodwill and Other Intangibles

  20,321   20,504   20,359   20,543   20,707   20,871   10,769 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Tangible Assets

 $1,037,251  $1,047,207  $1,039,149  $1,011,780  $894,589  $878,004  $739,315 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

SUMMARY SELECTED PRO FORMA CONDENSED COMBINED DATA

The following table shows selected financial information on a pro forma combined basis giving effect to the Merger (which is known as “pro forma” information) as if the Merger had become effective as of the date presented, in the case of the balance sheet information, and at the beginning of the period presented, in the case of the income statement information. The pro forma information reflects the acquisition method of accounting.

Farmers anticipates that the Merger will provide the combined company with financial benefits that include reduced operating expenses and greater revenue. The pro forma information, while helpful in illustrating the financial characteristics of Farmers following the Merger under one set of assumptions, does not reflect retailmark-up, markdownthese benefits and, accordingly, does not attempt to predict or commissions, andsuggest future results. The pro forma information also does not necessarily represent actual transactions.reflect what the historical results of Farmers would have been had the companies been combined during these periods.

The exchange ratio of 2.15 was used in preparing this selected pro forma information. You should read this summary pro forma information in conjunction with the information under “Unaudited Pro Forma Condensed Combined Consolidated Financial Information Relating to the Merger” and with the historical information in this document on which it is based.

 

   Farmers 
   High   Low   Dividends 

2017

      

First Quarter

  $14.90   $12.13   $.05 

Second Quarter

  $15.25   $12.65    0.05 

Third Quarter (through July 14)

  $15.00   $14.00    N/A 

2016

      

First Quarter

  $9.03   $8.00   $.04 

Second Quarter

   9.68    8.54    .04 

Third Quarter

   11.82    8.66    .04 

Fourth Quarter

   15.50    9.98    .04 

2015

      

First Quarter

  $8.45   $7.09   $.03 

Second Quarter

   8.44    7.95    .03 

Third Quarter

   8.75    7.70    .03 

Fourth Quarter

   8.70    7.60    .03 
   At March 31, 2022     
   (In thousands)     

Pro forma combined balance sheet data:

    

Total assets

  $5,216,369   

Loans, net

   3,048,726   

Deposits

   4,632,395   

Total stockholders’ equity

   448,809   
   Three Months Ended
March 31, 2022		   Year Ended
December 31, 2021		 
   (In thousands)   (In thousands) 

Pro forma combined income statement data:

    

Interest income

  $43,336   $158,598 

Interest expense

   2,646    12,322 
  

 

 

   

 

 

 

Net interest income

   40,690    146,276 

Provision for credit losses

   7,862    14,259 
  

 

 

   

 

 

 

Net interest income after provision for credit losses

   32,828    132,017 

Non-interest income

   18,686    42,783 

Non-interest expense

   36,122    102,235 
  

 

 

   

 

 

 

Income before income taxes

   15,392    72,565 

Provision for income taxes

   2,171    12,078 
  

 

 

   

 

 

 

Net income

  $13,221   $60,487 
  

 

 

   

 

 

 

Pro forma per share data:

    

Basic earnings

  $0.35   $1.82 

Diluted earnings

  $0.35   $1.81 

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED

FINANCIAL INFORMATION RELATING TO THE MERGER

The following unaudited pro forma condensed consolidated combined financial information and explanatory notes show the historical financial positions and results of operations of Farmers and Emclaire, and have been prepared to illustrate the effects of the Merger under the acquisition method of accounting with Farmers treated as the acquirer. The unaudited pro forma condensed combined consolidated balance sheet as of March 31, 2022 gives effect to the Merger as if the transaction had occurred on March 31, 2022. The unaudited pro forma condensed combined income statements for the three months ended March 31, 2022 and year ended December 31, 2021, give effect to the Merger as if the transaction had become effective beginning on the first day of the fiscal years presented. Certain reclassifications have been made to Emclaire’s historical financial information in order to conform to Farmers’ presentation of financial information.

The unaudited pro forma condensed combined consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial condition had the Merger been completed on the dates described above, nor is it necessarily indicative of the results of operations in future periods or the future financial position of the combined entities.

The pro forma financial information includes estimated adjustments, including adjustments to record assets and liabilities of Emclaire at its fair value, and represents the pro forma estimates by Farmers based on available fair value information as of the date of the Merger Agreement. In some cases, where noted, more recent information has been used to support estimated adjustments in the following table reflectspro forma financial information. The adjustments included in this unaudited pro forma condensed combined financial information are preliminary and may be revised. The pro forma information also does not reflect the last reported sale prices per sharebenefits of expected cost savings or any potential impacts of potential revenue enhancements and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during these periods.

The actual value of Farmers common shares to be recorded as of March 13, 2017, the date of execution ofconsideration in the Merger Agreement, and on July 14, 2017, the last practicable day for which information was available prior to the date of this proxy statement/prospectus. The table also presents the equivalent market value per Monitor common share on March 13, 2017, and July 14, 2017, determined by multiplying the share price of a Farmers common share on such dates by the initial exchange ratio of 57.82. Basedwill be based on the July 14, 2017 closing price for Farmers common shares of $14.20, the aggregate Merger consideration would exceed the Maximum Amount and, therefore, the exchange ratio would be subject to adjustment to 54.18 as of this July 14, 2017 closing price. This adjusted equivalent market value per Monitor common share on July 14, 2017 is presented in the table below. No assurance can be given as to what the market price of Farmers common shares at the time of the Merger completion date. The proposed Merger is expected to be completed in the second half of 2022, but there can be no assurance that the Merger will be ifcompleted as anticipated. For purposes of the pro forma financial information, the fair value of Farmers common shares to be issued in connection with the Merger was based on Farmers’ closing price of $17.06 as of March 31, 2022. The cash portion of the consideration along with Merger expenses will be funded with the sale of securities.

The pro forma adjustments included herein are subject to change depending on changes in interest rates and whenthe components of assets and liabilities, and as additional information becomes available and additional analyses are performed. The final allocation of the purchase price for the Merger will be determined after it is completed and after completion of thorough analyses to determine the fair value of Emclaire’s tangible and identifiable intangible assets and liabilities as of the date the Merger is consummated.completed. Increases or decreases in the estimated fair values of the net assets as compared with the information shown in the unaudited pro forma condensed combined consolidated financial information may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact Farmers’ statement of income due to adjustments in yield and/or amortization of the adjusted assets or liabilities. Any changes to Emclaire’s shareholders’ equity, including results of operations from December 31, 2021, through the date the Merger is completed, will also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein.

Farmers anticipates that the Merger will provide the combined company with financial benefits that include reduced operating expenses. Farmers expects to realize cost savings approximating 34% of the anticipated

non-interest expense of Emclaire. These cost savings are not included in these pro forma statements and there can be no assurance that estimated cost savings will be realized.

The unaudited pro forma condensed combined financial information is provided for illustrative information purposes only. The unaudited pro forma condensed combined financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the Merger been completed as of the dates indicated or that may be achieved in the future. The unaudited pro forma condensed combined consolidated financial information should be read in conjunction with (i) the accompanying Notes to Unaudited Pro Forma Condensed Combined Consolidated Financial Information; (ii) Farmers unaudited historical consolidated financial statements and accompanying notes as of and for the three months ended March 31, 2022, included in Farmers’ Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and incorporated by reference in this proxy statement/prospectus, (iii) Farmers’ audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2021, included in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2021, as amended, and incorporated by reference in this proxy statement/prospectus; (iv) Emclaire’s historical consolidated financial statements and the related notes incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information” in the forepart of this document.

The unaudited pro forma shareholders’ equity and net income are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Farmers’ common shares or the actual or future results of operations of Farmers for any period. Actual results may be materially different than the pro forma information presented.

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2022

 

   Farmers
Common Shares		   Equivalent Price Per
Monitor Common Share		 

March 13, 2017

  $13.40   $774.84 

July 14, 2017 (as adjusted)

  $14.20   $769.38 
   FMNB  EMCF  Pro Forma
Adjustments		  Pro Forma
Combined		  Pro Forma
Notes		 

ASSETS

      

Cash and cash equivalents

  $137,627  $12,033  $—    $149,660  

Securities available for sale (including equity securities)

   1,497,645   171,707   (65,705)   1,603,647   A 

Loans held for sale

   1,904   120    2,024  

Loans

   2,304,971   805,200   (19,030)   3,091,141   B 

Allowance for credit losses

   (27,015)   (10,268)   (5,132)   (42,415)   C 
  

 

 

  

 

 

  

 

 

  

 

 

  

Net Loans

   2,277,956   794,932   (24,162)   3,048,726  
  

 

 

  

 

 

  

 

 

  

 

 

  

Premises and equipment, net

   37,105   16,292   (1,000)   52,397   D 

Bank owned life insurance

   74,264   22,041    96,305  

Goodwill

   94,240   19,460   34,767   148,467   E 

Other intangibles

   7,947   861   9,042   17,850   F 

Other assets

   77,167   20,126    97,293  
  

 

 

  

 

 

  

 

 

  

 

 

  

Total assets

  $4,205,855  $1,057,572  $(47,058)  $5,216,369  
  

 

 

  

 

 

  

 

 

  

 

 

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Deposits:

      

Noninterest-bearing

  $963,143  $232,162  $—    $1,195,305  

Interest-bearing

   2,730,668   703,794   2,628   3,437,090   G 
  

 

 

  

 

 

  

 

 

  

 

 

  

Total deposits

   3,693,811   935,956   2,628   4,632,395  
  

 

 

  

 

 

  

 

 

  

 

 

  

Short-term borrowings

   —     3,050   (3,050)   —     H 

Long-term borrowings

   87,872   15,000   (15,000)   87,872   I 

Other liabilities

   30,286   16,904   103   47,293   J 
  

 

 

  

 

 

  

 

 

  

 

 

  

Total liabilities

   3,811,969   970,910   (15,319)   4,767,560  
  

 

 

  

 

 

  

 

 

  

 

 

  

Commitments and contingent liabilities

      

Stockholders’ equity:

      

Preferred stock

   —     4,206   (4,206)   —     K 

Common stock

   304,670   3,547   66,680   374,897   L 

Additional paid-in-capital

   —     47,765   (47,765)   —     M 

Retained earnings

   184,302   50,440   (65,744)   168,998   N 

Accumulated other comprehensive income

   (79,500)   (17,182)   17,182   (79,500)   O 

Treasury stock

   (15,586)   (2,114)   2,114   (15,586)   P 
  

 

 

  

 

 

  

 

 

  

 

 

  

Total stockholders’ equity

   393,886   86,662   (31,739)   448,809  
  

 

 

  

 

 

  

 

 

  

 

 

  

Total liabilities and stockholders’ equity

  $4,205,855  $1,057,572  $(47,058)  $5,216,369  
  

 

 

  

 

 

  

 

 

  

 

 

  

Shares outstanding

   34,007,677   2,735,212   1,381,282   38,124,171  

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2022

 

(In thousands, except per share data) FMNB  EMCF  Pro Forma
Adjustments		  Pro Forma
Combined		  Pro Forma
Notes		 

Interest and dividend income:

     

Loans, including fees

 $25,562  $7,612  $952  $34,126   Q 

Taxable securities

  4,587   695   438   5,720   R 

Tax exempt securities

  2,952   285    3,237  

Federal funds sold and other

  178   75    253  
 

 

 

  

 

 

  

 

 

  

 

 

  

Total interest income

  33,279   8,667   1,390   43,336  

Interest expense:

     

Deposits

  1,244   822   (219)   1,847   S 

Borrowings

  793   105   (99)   799   T 
 

 

 

  

 

 

  

 

 

  

 

 

  

Total interest expense

  2,037   927   (318)   2,646  
 

 

 

  

 

 

  

 

 

  

 

 

  

Net interest income

  31,242   7,740   1,708   40,690  

(Credit) provision for credit losses

  (930)   (80)   8,300   7,290   U 

Provision for unfunded loans

  572     572  

Net interest income after provision for credit losses

  31,600   7,820   (6,592)   32,828  
 

 

 

  

 

 

  

 

 

  

 

 

  

Non-interest income:

     

Service charges on deposit accounts

  1,145   401    1,546  

Net increase from bank owned life insurance

  409   139    548  

Trust fees

  2,519   —      2,519  

Insurance agency commissions

  1,047   —      1,047  

Security gains, including fair value changes for equity securities

  (11)   9    (2)  

Retirement plan consulting fees

  397   —      397  

Investment commissions

  694   —      694  

Net gains on sale of loans

  1,129   (3)    1,126  

Other mortgage banking income (loss), net

  60   —      60  

Debit card and EFT fees

  1,416   —      1,416  

Legal settlement

  8,400     8,400  

Other operating income

  493   461    954  
 

 

 

  

 

 

  

 

 

  

 

 

  

Total non-interest income

  17,698   1,007   —     18,705  
 

 

 

  

 

 

  

 

 

  

 

 

  

Non-interest expense:

     

Salaries and employee benefits

  11,831   2,893    14,724  

Occupancy and equipment

  2,680   848   (9)   3,519   V 

State and local taxes

  678   —      678  

Professional fees

  3,135   482    3,617  

Merger related costs

  1,940   —      1,940  

Advertising

  392   —      392  

FDIC insurance

  267   149    416  

Intangible amortization

  420   38   226   684   W 

Core processing charges

  745   —      745  

Charitable donation

  6,000   —      6,000  

Other operating expenses

  2,368   1,463   (405)   3,426   X 
 

 

 

  

 

 

  

 

 

  

 

 

  

Total non-interest expense

  30,456   5,873   (188)   36,141  

Income before income taxes

  18,842   2,954   (6,404)   15,392  

Provision for income taxes

  2,998   518   (1,345)   2,171   Y 
 

 

 

  

 

 

  

 

 

  

 

 

  

Net income

  15,844   2,436   (5,059)   13,221  

Preferred stock dividends

  —     —     —     —    
 

 

 

  

 

 

  

 

 

  

 

 

  

Net income available to common stockholders

 $15,844  $2,436  $(5,059)  $13,221  
 

 

 

  

 

 

  

 

 

  

 

 

  

Basic earnings per common share:

     

Earnings per share

 $0.47  $0.89   $0.35  

Weighted average shares outstanding

  33,820,485   2,735,212   1,381,282   37,936,979   JJ 

Diluted earnings per common share:

     

Earnings per share

 $0.47  $0.88   $0.35  

Weighted average shares outstanding

  33,936,938   2,757,354   1,392,464   38,086,756   JJ 


UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2021

(In thousands, except per share data) FMNB  EMCF  Pro Forma
Adjustments		  Pro Forma
Combined		  Pro Forma
Notes		 

Interest and dividend income:

     

Loans, including fees

 $94,820  $32,743  $3,806  $131,369   Z 

Taxable securities

  11,399   2,435   1,752   15,586   AA 

Tax exempt securities

  9,542   1,019    10,561  

Federal funds sold and other

  698   384    1,082  
 

 

 

  

 

 

  

 

 

  

 

 

  

Total interest income

  116,459   36,581   5,558   158,598  

Interest expense:

     

Deposits

  6,775   4,450   (876)   10,349   BB 

Borrowings

  1,694   674   (395)   1,973   CC 
 

 

 

  

 

 

  

 

 

  

 

 

  

Total interest expense

  8,469   5,124   (1,271)   12,322  
 

 

 

  

 

 

  

 

 

  

 

 

  

Net interest income

  107,990   31,457   6,829   146,276  

Provision for credit losses

  4,649   1,066   8,300   14,015   DD 

Provision for unfunded loans

  244   —      244  

Net interest income after provision for credit losses

  103,097   30,391   (1,471)   132,017  
 

 

 

  

 

 

  

 

 

  

 

 

  

Non-interest income:

     

Service charges on deposit accounts

  3,660   1,435    5,095  

Net increase from bank owned life insurance

  1,338   435    1,773  

Trust fees

  9,438   —      9,438  

Insurance agency commissions

  3,456   —      3,456  

Security gains, including fair value changes for equity securities

  1,004   245    1,249  

Retirement plan consulting fees

  1,421   —      1,421  

Investment commissions

  2,276   —      2,276  

Net gains on sale of loans

  8,285   390    8,675  

Other mortgage banking income (loss), net

  (136)   —      (136)  

Debit card and EFT fees

  5,144   —      5,144  

Other operating income

  2,307   2,085    4,392  
 

 

 

  

 

 

  

 

 

  

 

 

  

Total non-interest income

  38,193   4,590   —     42,783  
 

 

 

  

 

 

  

 

 

  

 

 

  

Non-interest expense:

     

Salaries and employee benefits

  39,393   11,340    50,733  

Occupancy and equipment

  8,486   3,260   (36)   11,710   EE 

State and local taxes

  2,277   —      2,277  

Professional fees

  4,191   1,017    5,208  

Merger related costs

  7,109   —      7,109  

Advertising

  1,859   —      1,859  

FDIC insurance

  582   579    1,161  

Intangible amortization

  1,362   185   904   2,451   FF 

Core processing charges

  3,198   —      3,198  

Other operating expenses

  10,719   6,215   (405)   16,529   GG 
 

 

 

  

 

 

  

 

 

  

 

 

  

Total non-interest expense

  79,176   22,596   436   102,325  

Income before income taxes

  62,114   12,385   (1,934)   72,565  

Provision for income taxes

  10,270   2,214   (406)   12,078   HH 
 

 

 

  

 

 

  

 

 

  

 

 

  

Net income

  51,844   10,171   (1,528)   60,487  

Preferred stock dividends

  —     196   (196)   —     II 

Net income available to common stockholders

 $51,844  $9,975  $(1,332)  $60,487  
 

 

 

  

 

 

  

 

 

  

 

 

  

Basic earnings per common share:

     

Earnings per share

 $1.78  $3.66   $1.82  

Weighted average shares outstanding

  29,167,357   2,722,133   1,374,677   33,264,167   JJ 

Diluted earnings per common share:

     

Earnings per share

 $1.77  $3.63   $1.81  

Weighted average shares outstanding

  29,279,787   2,748,553   1,388,019   33,416,359   JJ 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Balance Sheet  March 31, 2022 
   (Dollars in thousands) 

A - Adjustments to available for sale securities

  

To reflect after-tax impact of estimated direct merger-related expenses

  $(10,626) 

To reflect payoff of Emclaire’s short and long term borrowings

   (18,050) 

To reflect payoff of Emclaire’s preferred stock

   (4,206) 

To reflect cash consideration of Emclaire’s outstanding common shares

   (32,823) 
  

 

 

 
  $(65,705) 
  

 

 

 

B - Adjustments to loans

  

To reflect the credit mark for Emclaire’s non-purchase credit deteriorated loans

  $(8,300) 

To reflect portfolio loans at fair value for current interest rates

   (10,730) 
  

 

 

 
  $(19,030) 
  

 

 

 

C - Adjustments to allowance for credit losses

  

To eliminate Emclaire’s allowance for loan losses

  $10,268 

To record the provision for credit losses associated with Emclaire’s non-PCD loans

   (8,300) 

To record the credit mark for Emclaire’s loans designated as purchase credit deteriorated (PCD loans)

   (7,100) 
  

 

 

 
  $(5,132) 
  

 

 

 

D - Adjustments to premises and equipment

  

To reflect estimated fair value of buildings acquired. The adjustment will reduce depreciation expense over 27.5 years on a straight line basis.

  $(1,000) 
  

 

 

 

E - Adjustments to goodwill

  

To eliminate Emclaire’s goodwill

  $(19,460) 

To reflect goodwill created as a result of the merger

   54,227 
  

 

 

 
  $34,767 
  

 

 

 

F - Adjustments to other intangibles

  

To eliminate Emclaire’s core deposit intangible

  $(861) 

To record estimated fair value of acquired identifiable intangible assets, calculated as 1.25% of Emclaire’s core deposits. Core deposits represent total deposits less time deposits. The acquired core deposit intangible will be amortized over 10 years using straight-line amortization.

   9,903 
  

 

 

 
  $9,042 
  

 

 

 

G - Adjustments to interest-bearing deposits

  

To record estimated fair value based on current market rates for similar products.

  

The adjustment will be accreted into income over three years

  $2,628 
  

 

 

 

H - Adjustments to short term borrowings

  

To record the payoff of Emclaire’s short term borrowings

  $(3,050) 
  

 

 

 

I - Adjustments to long term borrowings

  

To record estimated fair value of Emclaire’s long term borrowings

  $(405) 

To record write-off of fair value associated with payoff of long term borrowings

   405 

To record the payoff of Emclaire’s long term borrowings

   (15,000) 
  

 

 

 
  $(15,000) 
  

 

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Balance Sheet  March 31, 2022 
   (Dollars in thousands) 

J - Adjustments to other liabilities

  

To reduce the tax liability for the write-off of the fair value for the payoff of Emclaire’s long term borrowings

  $(85) 

To reflect net deferred tax liability as a result of the merger fair value adjustments

   1,931 

To reduce the tax liability for the provision for credit losses associated with Emclaire’s non-PCD loans

   (1,743) 
  

 

 

 
  $103 
  

 

 

 

K - Adjustments to preferred stock

  

To eliminate Emclaire’s historical preferred stock

  $(4,206) 
  

 

 

 

L - Adjustments to common stock

  

To eliminate Emclaire’s historical common stock

  $(3,547) 

To reflect issuance of common stock to Emclaire’s shareholders

   70,227 
  

 

 

 
  $66,680 
  

 

 

 

M - Adjustments to additional paid-in-capital

  

To eliminate Emclaire’s additional paid-in-capital

  $(47,765) 
  

 

 

 

N - Adjustments to retained earnings

  

To eliminate Emclaire’s retained earnings

  $(50,440) 

To record the after-tax cost of the provision for credit losses associated with Emclaire’s non-PCD loans

   (6,557) 

To reflect buyer’s after-tax cost for write-off of fair value on Emclaire’s long term borrowings

   (320) 

To reflect buyer’s estimated after-tax merger expenses

   (8,427) 
  

 

 

 
  $(65,744) 
  

 

 

 

O - Adjustments to accumulated other comprehensive income

  

To eliminate Emclaire’s accumulated other comprehensive income

  $17,182 
  

 

 

 

P - Adjustments to treasury stock

  

To eliminate Emclaire’s treasury stock

  $2,114 
  

 

 

 
Income Statement    

Q - Adjustments to loan income

  

To reflect net accretion of loan credit mark and amortization of loan rate mark, both over an estimated 5 year average life

  $952 
  

 

 

 

R - Adjustments to taxable securities income

  

To reflect lost interest income due to sale of securities to provide cash for the transaction

  $(328) 

To reflect the fair value of securities which will be amortized into income over 5 years

   766 
  

 

 

 
  $438 
  

 

 

 

S - Adjustment to deposit expense

  

To reflect accretion of deposit rate mark over an estimated three year average life

  $(219) 
  

 

 

 

T - Adjustments to borrowing expense

  

To reflect the reduced interest expense of the borrowings due to their payoff

  $(99) 
  

 

 

 

U - Adjustment to provision for credit losses

  

To record the provision for credit losses associated with Emclaire’s non-PCD loans

  $8,300 
  

 

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Income Statement  March 31, 2022 
   (Dollars in thousands) 

V - Adjustment to occupancy and equipment expense

  

To reflect Emclaire’s fair value adjustment on buildings which will reduce depreciation expense over 27.5 years

  $(9) 
  

 

 

 

W - Adjustment to intangible amortization expense

  

To reflect the amortization of the acquired core deposit intangible asset over 10 years by the straight-line method

  $248 
  

 

 

 

X - Adjustment to other operating expenses

  

To reflect the fair value recognized on the payoff of borrowings

  $(405) 
  

 

 

 

Y - Adjustment to income tax expense

  

To reflect the income tax effect of pro forma adjustments at estimated marginal tax rate of 21%

  $(1,349) 
  

 

 

 

Z - Adjustments to loan income

  

To reflect net accretion of loan credit mark and amortization of loan rate mark, both over an estimated 5 year average life

  $3,806 
  

 

 

 

AA - Adjustments to taxable securities income

  

To reflect lost interest income due to sale of securities to provide cash for the transaction

  $(1,314) 

To reflect the fair value of securities which will be amortized into income over 5 years

   3,066 
  

 

 

 
  $1,752 
  

 

 

 

BB - Adjustment to deposit expense

  

To reflect accretion of deposit rate mark over an estimated three year average life

  $(876) 
  

 

 

 

CC - Adjustments to borrowing expense

  

To reflect the reduced interest expense of the borrowings due to their payoff

  $(395) 
  

 

 

 

DD - Adjustment to provision for credit losses

  

To record the provision for credit losses associated with Emclaire’s non-PCD loans

  $8,300 
  

 

 

 

EE - Adjustment to occupancy and equipment expense

  

To reflect Emclaire’s fair value adjustment on buildings which will reduce depreciation expense over 27.5 years

  $(36) 
  

 

 

 

FF - Adjustment to intangible amortization expense

  

To reflect the amortization of the acquired core deposit intangible asset over 10 years by the straight-line method

  $992 
  

 

 

 

GG - Adjustment to other operating expenses

  

To reflect the fair value recognized on the payoff of borrowings

  $(405) 
  

 

 

 

HH - Adjustment to income tax expense

  

To reflect the income tax effect of pro forma adjustments at estimated marginal tax rate of 21%

  $(2,022) 
  

 

 

 

II - Adjustment to preferred stock dividends

  

To reflect the elimination of preferred stock dividends due to preferred stock payoff

  $(196) 
  

 

 

 

JJ - Adjustment to average shares outstanding

  

To arrive at consolidated pro forma average shares outstanding, Emclaire’s respective average outstanding shares were multiplied by the exchange ratio of 2.15 and then added to Farmers respective average outstanding shares

  

UNAUDITED COMPARATIVE PER SHARE DATA

The following table summarizes selected share and per share information about Farmers and Emclaire giving effect to the Merger (which is referred to as “pro forma” information). The data in the table should be read together with the financial information and the financial statements of Farmers and Emclaire incorporated by reference or included in this proxy statement/prospectus. The pro forma information is presented as an illustration only. The data does not necessarily indicate the combined financial position per share or combined results of operations per share that would have been reported if the Merger had occurred when indicated, nor is the data a forecast of the combined financial position or combined results of operations for any future period.

The information about book value per share and shares outstanding assumes that the Merger took place as of the dates presented and is based on the assumptions set forth in the preceding unaudited pro forma condensed combined consolidated balance sheet. The information about dividends and earnings per share assumes that the Merger took place as of the periods presented and is based on the assumptions set forth in the preceding unaudited pro forma condensed combined consolidated income statement. No pro forma adjustments have been included to reflect potential effects of the Merger related to integration expenses, cost savings or operational synergies which are expected to be obtained by combining the operations of Farmers and Emclaire, or the costs of combining the companies and their operations. It is further assumed that Farmers will pay a cash dividend after the completion of the Merger at the annual rate of $0.16 per common share. The actual payment of dividends is subject to numerous factors, and no assurance can be given that Farmers will pay dividends following the completion of the Merger or that dividends will not be reduced in the future.

   FMNB
Historical		   EMCF
Historical		   Pro Forma
Combined(1)(2)(3)		   Equivalent
Pro Forma
EMCF(4)		 

Basic Net Income Per Common Share

        

Three months ended March 31, 2022

  $0.47   $0.89   $0.35   $0.75 

Year ended December 31, 2021

  $1.78   $3.66   $1.82   $3.91 

Diluted Net Income Per Common Share

        

Three months ended March 31, 2022

  $0.47   $0.88   $0.35   $0.75 

Year ended December 31, 2021

  $1.77   $3.63   $1.81   $3.89 

Dividends Declared Per Common Share

        

Three months ended March 31, 2022

  $0.16   $0.31   $0.16   $0.34 

Year ended December 31, 2021

  $0.47   $1.20   $0.47   $1.01 

Book Value Per Common Share

        

March 31, 2022

  $11.58   $33.91   $11.77   $25.31 

(1)

The pro forma combined book value per FMNB common share is based on the pro forma combined common stockholders’ equity for the merged entities divided by total pro forma common shares of the combined entities.

(2)

Pro forma dividends per share represent FMNB’s historical dividend per common shares.

(3)

The pro forma combined diluted net income per FMNB’s common share is based on the pro forma combined diluted net income for the merged entities divided by total pro forma diluted common shares of the combined entities.

(4)

Represents the Pro Forma Combined information multiplied by the 2.15 exchange ratio.

RISK FACTORS

In addition to general investment risks and the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the section “FORWARD-LOOKING STATEMENTS” commencing on page 22,[●], you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this proxy statement/prospectus. The following is a discussion of the most significant factors that make an investment in Farmers common shares speculative or risky, but does not purport to present an exhaustive description of such risks. You should also consider the other information in this proxy statement/prospectus and the other documents incorporated by reference into this proxy statement/prospectus. See “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document.

Risks Related to the Merger

The market value of Farmers common shares you receive in the Merger may decrease if there are fluctuations in the market price of Farmers common shares following the Merger.

Under the terms of the Merger Agreement, shareholders of Monitor will be entitled to receive from Farmers, afterat the Merger is completed, Merger consideration payable in the form of cash and Farmers common shares to be calculated as set forth in the Merger Agreement. At the Effective Timeeffective time of the Merger, it is anticipated that each MonitorEmclaire common share will be converted into the right to receive:receive, at the election of the holder of such Emclaire common share, either: (i) 57.822.15 Farmers common shares, or (ii) $769.38$40.00 in cash, subject to allocation and adjustment under certain circumstancesas set forth in the Merger Agreement.

Farmers will not issue any fractional common shares in connection with the Merger. Instead, each holder of MonitorEmclaire common sharesshareholder who would otherwise be entitled to receive a fraction of a Farmers common share (after taking into account all shares of MonitorEmclaire common shares owned by such holder at the effective time of the Merger) will receive cash (rounded to the nearest cent), without interest, in an amount equal to the Farmers fractional common share to which such holder would otherwise be entitled (rounded to the nearest thousandth when expressed in decimal form) multiplied by the volume-weighted average, rounded to the nearest one tenth of a cent, of the closing sale prices of Farmers common shares based on information reported by the NasdaqNASDAQ for the five (5)consecutive full trading days ending on the penultimate day preceding the effectiveclosing date of the Merger.

Any change in the market price of Farmers common shares prior to the completion of the Merger will affect the market value of the Merger consideration that MonitorEmclaire common shareholders will receive following completion of the Merger. Stock price changes may result from a variety of factors that are beyond the control of Farmers and Monitor,Emclaire, including, but not limited to, general market and economic conditions, changes in their respective businesses, operations and prospects and regulatory considerations. While the Monitor shareholders will receive aggregate Merger consideration not greater than the Maximum Amount or less than the Minimum Amount, at the time of the Monitor special meeting, Monitor shareholders will not know the precise market value of the consideration they will receive at the effective time of the Merger. MonitorEmclaire common shareholders should obtain current sale prices for Farmers common shares before voting their common shares at the MonitorEmclaire special meeting.

The market price of Farmers shares after the Merger may be affected by factors different from those affecting the shares of Emclaire currently.

Upon completion of the Merger, holders of Emclaire common shares who receive Farmers common shares as the Merger consideration will become holders of Farmers common shares. The businesses of Farmers and Emclaire differ in certain respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s common shares may be affected by factors different from those currently affecting the independent results of operations of each of Farmers and Emclaire. Farmers is, and will continue to be, subject to the risks described in Farmers’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as amended, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus. See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page [●] of this proxy statement/prospectus.

Farmers could experience difficulties in managing its growth and effectively integrating the operations of Monitor.Emclaire.

The earnings, financial condition and prospects of Farmers after the Merger will depend in part on Farmers’ ability to integrate successfully the operations of MonitorEmclaire and MonitorEmlenton Bank, and to continue to implement its own business plan. Farmers may not be able to fully achieve the strategic objectives and projected operating efficiencies anticipated in the Merger. The costs or difficulties relating to the integration of MonitorEmclaire and MonitorEmlenton Bank with the Farmers organization may be greater than expected or the cost savings from any anticipated economies of scale of the combined organization may be lower or take longer to realize than expected. Inherent uncertainties exist in integrating the operations of any acquired entity, and Farmers may encounter difficulties, including, without limitation, loss of key employees and customers, and the disruption of its ongoing business or possible inconsistencies in standards, controls, procedures and policies. These factors could contribute to Farmers not fully achieving the expected benefits from the Merger.

The Merger Agreement limits Monitor’sEmclaire’s ability to pursue alternatives to the Merger with Farmers, may discourage other acquirers from offering a higher valued transaction to MonitorEmclaire and may, therefore, result in less value for the MonitorEmclaire shareholders.

The Merger Agreement contains a provision that, subject to certain limited exceptions, prohibits MonitorEmclaire from soliciting, negotiating or providing confidential information to any third party relating to any competing proposal to acquire MonitorEmclaire or MonitorEmlenton Bank. The prohibition limits Emclaire’s ability to seek offers from other potential acquirers that may be superior from a financial point of view to the proposed transaction.

In addition, if (a) Farmers terminates the Merger Agreement is terminated due to Monitor’s acceptancecertain circumstances, Emclaire is required to pay Farmers a termination fee of another acquisition proposal, failure to recommend to the shareholders adoption of the Merger Agreement or Monitor’s breach of the Merger Agreement’s prohibition on solicitation of other acquisition proposals, or, (b) Monitor terminates the Merger Agreement with the intention of entering into or accepting an alternate, superior proposal, then, in the case of either (a) or (b) above, Monitor shall pay to Farmers $300,000.$3,750,000. The requirement that MonitorEmclaire make such a payment could discourage another company from making a competing proposal. For a description of the circumstances in which Emclaire would be required to pay the termination fee to Farmers, see “THE MERGER AGREEMENT – Termination; Termination Fee” on page [●] of this proxy statement/prospectus.

The fairness opinion of Monitor’sEmclaire’s financial advisor does not reflect changes in circumstances subsequent to the date of such opinion.

The MonitorEmclaire board of directors received an opinion, dated March 13, 2017,23, 2022, from its financial advisor as to the fairness of the Merger consideration from a financial point of view to the shareholders of Emclaire as of the date of such opinion. Subsequent changes in the operation and prospects of MonitorEmclaire or Farmers, general market and economic conditions and other factors that may be beyond the control of MonitorEmclaire or Farmers may significantly alter the value of MonitorEmclaire or Farmers or the price of the Farmers common shares by the time the Merger is completed. The opinion does not address the fairness of the Merger consideration from a financial point of view at the time the Merger is completed, or as of any other date other than the date of such opinion. The opinion of Monitor’sEmclaire’s financial advisor is attached asAnnex DB to this proxy statement/prospectus. For a description of the opinion, see “THE MERGER – Opinion of Monitor’sEmclaire’s Financial Advisor” on page 33[●] of this proxy statement/prospectus.

MonitorEmclaire shareholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over management of the combined organization.

The Merger will result in Monitor’sEmclaire’s shareholders having an ownership stake in the combined company that is substantially smaller than their current stake in Monitor.Emclaire. Upon completion of the Merger, we estimate that continuing Farmers shareholders will own approximately 98.22%89.2% of the issued and outstanding common shares of the combined company, and former MonitorEmclaire common shareholders will own approximately 1.78%10.8% of the issued and outstanding common shares of the combined company. Consequently, MonitorEmclaire common shareholders, as a general matter, will have substantially less influence over the management and policies of the combined company after the effective time of the Merger than they currently exercise over the management and policies of Monitor.Emclaire.

Failure to complete the Merger could negatively impact the value of Monitor’sEmclaire’s shares and future businesses and financial results of Farmers and Monitor.Emclaire.

If the Merger is not completed, the ongoing businesses of Farmers and MonitorEmclaire may be adversely affected, and Farmers and MonitorEmclaire will be subject to several risks, including the following:

 

Farmers and MonitorEmclaire will be required to pay certain costs relating to the Merger, whether or not the Merger is completed, such as legal, accounting, certain financial advisor and printing fees;

 

under the Merger Agreement, MonitorEmclaire is subject to certain restrictions regarding the conduct of its business before completing the Merger, which may adversely affect its ability to execute certain of its business strategies; and

 

matters relating to the Merger may require substantial commitments of time and resources by Farmers and MonitorEmclaire management, which could otherwise have been devoted to other opportunities that may have been beneficial to Farmers and MonitorEmclaire as independent companies, as the case may be.

In addition, if the Merger is not completed, Farmers and MonitorEmclaire may experience negative reactions from their respective customers and employees. Employees could resign and obtain other employment as a result of the potential Merger or a failed completion of the Merger. Farmers or MonitorEmclaire also could be subject to litigation related to any failure to complete the Merger.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the Merger.

Before the Merger may be completed, various approvals or waivers of application, consents and non-objections must be obtained from the Board of Governors of the Federal Reserve, the OCC and the Pennsylvania Department. In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each party and the factors described under “THE MERGER – Regulatory Approvals Required” on page [●] of this proxy statement/prospectus. These approvals could be delayed or not obtained at all, including due to either party’s regulatory standing or any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions or that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of the Merger, imposing additional material costs on or materially limiting the revenues of the combined company following the Merger or otherwise reducing the anticipated benefits of the Merger if the Merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Merger or termination of the Merger Agreement. Finally, the completion of the Merger is conditioned on the absence of certain orders, injunctions or decrees by any court or governmental entity of competent jurisdiction that would permanently enjoin or otherwise prohibit or make illegal the transactions contemplated by the Merger Agreement. See “THE MERGER AGREEMENT – Termination; Termination Fee” on page [●] of this proxy statement/prospectus.

Emclaire’s directors and executive officers have interests in the Merger that may differ from, or are in addition to, the interests of holders of Emclaire common shares.

Emclaire shareholders should be aware that Emclaire’s directors and executive officers have interests in the Merger and have arrangements that are different from, or in addition to, those of Emclaire shareholders. The Emclaire board of directors was aware of these respective interests and considered these interests, among other

matters, when making its decision to approve the Merger Agreement, and in recommending that the holders of Emclaire common stock vote to approve and adopt the Merger Agreement. For a more complete description of these interests, please see “THE MERGER – Interests of Emclaire Directors and Executive Officers in the Merger” on page [●] of this proxy statement/prospectus.

The Farmers common shares to be received by MonitorEmclaire shareholders upon completion of the Merger will have different rights from Monitorthan Emclaire common shares.

Upon completion of the Merger, MonitorEmclaire common shareholders will no longer be shareholders of MonitorEmclaire but will instead become shareholders of Farmers, and their rights as shareholders of Farmers will be governed by the Ohio Revised Code and by Farmers’ Amended Articles of Incorporation, as amended, and Amended Code of Regulations. The terms of Farmers’ Amended Articles of Incorporation, as amended, and Amended Code of Regulations are in some respects materially different than the terms of Monitor’sEmclaire’s Amended and Restated Articles of Incorporation and Code of Regulations.Bylaws. See“COMPARISON OF CERTAIN RIGHTS OF MONITOREMCLAIRE SHAREHOLDERS AND FARMERS SHAREHOLDERS”on page 62[●] of this proxy statement/prospectus.

Holders of Emclaire common shares will not have dissenters’ rights or appraisal rights in the Merger.

Pursuant to Section 1571(b) of the PAETL, none of the Emclaire shareholders will be entitled to appraisal or dissenters’ rights in connection with the Merger.

Completion of the Merger is subject to many conditions and if these conditions are not satisfied or waived, the Merger will not be completed.

The respective obligations of Farmers and MonitorEmclaire to complete the Merger are subject to the fulfillment or written waiver of many conditions, including approval by the requisite vote of Monitor’sEmclaire’s shareholders, receipt of requisite regulatory approvals, absence of orders prohibiting completion of the Merger, effectiveness of the registration statement of which this document is a part, approval of the Farmers common shares to be issued to MonitorEmclaire for listing on the Nasdaq,NASDAQ, the continued accuracy of the representations and warranties by both parties, and the performance by both parties of their covenants and agreements. See “THE MERGER AGREEMENT –Conditions to the Merger”on page 57[●] of this proxy statement/prospectus. These conditions to the consummation of the Merger may not be fulfilled and, accordingly, the Merger may not be completed. In addition, if the Merger is not completed by March 13, 2018,January 31, 2023, either Farmers or MonitorEmclaire may have the opportunity to choose not to proceed with the Merger, and the parties can mutually decide to terminate the Merger Agreement at any time, before or after approval by the requisite vote of the MonitorEmclaire shareholders. In addition, Farmers or MonitorEmclaire may elect to terminate the Merger Agreement in certain other circumstances. See“THE MERGER AGREEMENT –Termination; Termination Fee”on page 59[●] of this proxy statement/prospectus for a fuller description of these circumstances.

The Mergerunaudited pro forma combined financial information included in this proxy statement/prospectus is preliminary and the actual financial condition requiring Approval by Nonaffiliated Shareholders may be waived, and results of operations of Farmers after the Merger may be completed even if this condition is not satisfied.differ materially.

The respective obligationspro forma financial information in this document is presented for illustrative purposes only and is not necessarily indicative of Farmers and Monitor to completewhat Farmers’ actual financial condition or results of operations would have been had the Merger been completed on the dates presented. The unaudited financial information reflects estimated adjustments, which are subject to Monitor obtaining Approval by Nonaffiliated Shareholders. If Monitor fails to obtain Approval by Nonaffiliated Shareholders, this closing condition would not be satisfied,based upon preliminary estimates and the Merger may notpurchase price allocation reflected in this document is preliminary, and final allocation of the purchase price will be completed. However, Farmersbased upon the actual purchase price and Monitor may waivethe fair value of the assets and liabilities of Emclaire as of the date of the completion of the Merger. For more information, please see “SUMMARY SELECTED PRO FORMA CONDENSED COMBINED DATA” and “UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION RELATING TO THE MERGER” on page [●] of this condition by written instrument signed by each party, in which event the Merger may be completed despite the absence of Approval by Nonaffiliated Shareholders.proxy statement/prospectus.

Risks Related to Farmers’ Business

You should read and consider risk factors specific to Farmers’ business that will also affect the combined company after the Merger, described in Farmers’ Annual Report on Form10-K for the fiscal year ended December 31, 2016,2021, filed with the CommissionSEC on March 7, 2017,9, 2022, as amended by Amendment No. 1 on Form 10-K/A thereto filed with the SEC on May 6, 2022, and as updated by subsequently filed Quarterly Reports on Form10-Q and Current Reports on Form8-K, all of which are filed by Farmers with the SEC and incorporated by reference into this document. See “INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE” on page 66[●] of this proxy statement/prospectus.

FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus and the documents incorporated herein by reference contain “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), notwithstanding that such statements are not specifically identified. These forward-looking statements includinginclude statements about Farmers’, Monitor’sEmclaire’s and the combined entity’s financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward-looking statements express Farmers’ and Monitor’sEmclaire’s management’s current expectations or forecasts of future events and, by their nature, are subject to assumptions, risks and uncertainties. Certain statements contained in this proxy statement/prospectus and the documents incorporated herein by reference that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”) notwithstanding that such statements are not specifically identified.statements.

In addition, certain statements may be contained in the future filings of Farmers and Emclaire with the SEC, in press releases and in oral and written statements made by or with the approval of Farmers or MonitorEmclaire that are not statements of historical fact and constitute forward-looking statements within the meaning of the Reform Act. Examples of forward-looking statements include, but are not limited to:

 

statements about the benefits of the Merger between Farmers and Monitor,Emclaire, including future financial and operating results, cost savings, enhanced revenues and accretion to reported earnings that may be realized from the Merger;

 

statements regarding plans, objectives and expectations of Farmers or MonitorEmclaire or their respective management or boards of directors;

 

statements regarding future economic performance; and

 

statements regarding assumptions underlying any such statements.

WordsForward-looking statements are preceded by terms such as “believes,“will,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,“would,” “should,” “may” and other“could,” “may,” “expect,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “project,” or variations of these words, or similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.expressions.

Forward-looking statements are not guaranteesa guarantee of future performance and involve certainactual future results could differ materially from those contained in forward-looking information. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks uncertainties and assumptionschanges in circumstances that are difficult to predict. Therefore,predict and many of which are outside of Farmers’ control. Numerous uncertainties, risks, and changes could cause or contribute to Farmers’ actual outcomesresults, performance, and results may differachievements to be materially different from what isthose expressed or forecasted in suchimplied by the forward-looking statements. Factors that couldmay cause actual resultsor contribute to differ from those discussed in these differences include, without limitation:

the forward-looking statements include, butpossibility that the closing of the proposed transaction is delayed or does not occur at all because required regulatory approvals, approval by Emclaire’s shareholders or other conditions to the transaction are not limited to:obtained or satisfied on a timely basis or at all;

 

the possibility that the anticipated benefits of the transaction are not realized when expected or at all;

the risk that the businesses of Farmers and MonitorEmclaire will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected;

 

expected revenue synergies and cost savings from the Merger may not be fully realized or realized within the expected time frame;

 

revenues or earnings following the Merger may be lower than expected;

 

deposit attrition, operating costs, customer loss and business disruption following the Merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected;

the inability to obtain governmental approvals of the Merger on the proposed terms and schedule;

the failure of Monitor’s shareholders to approve the Merger;

local, regional, national and international economic conditions and the impact they may have on Farmers and its customers and Farmers’ assessment of that impact;

 

effects of the COVID-19 pandemic on the local, national, and international economy, Farmers’ or Emclaire’s organization and employees, and Farmers’ or Emclaire’s customers and suppliers and their business operations and financial condition, including Farmers’ or Emclaire’s customers’ ability to repay loans;

disruptions in the mortgage and lending markets and significant or unexpected fluctuations in interest rates related to COVID-19 and governmental responses, including financial stimulus packages;

changes in the level ofnon-performing assets, delinquent loans and charge-offs;

 

material changes in the value of Farmers common shares;

changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;

 

the risk that management’s assumptions and estimates used in applying critical accounting policies prove unreliable, inaccurate or not predictive of actual results;

 

inflation, interest rate, securities market and monetary fluctuations;

 

changes

general fluctuations in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity;

 

competitive pressures among depositoryfactors, including increased competition with regional and othernational financial institutions may increase and have an effect on pricing, spending, third-party relationships and revenues;institutions;

 

changes in laws and regulations (including laws and regulations concerning taxes, banking and securities) with which Farmers and Monitor must comply;

the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve;Reserve System;

 

legislation affecting the financial services industry as a whole, and/or Farmers and itsEmclaire and their respective subsidiaries, individually or collectively;

 

governmental and public policy changes; and

 

rapidly changing technology and evolving banking industry standards;

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

the impact on Farmers’ businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts.

Additional factors that could cause Farmers’ and Monitor’sEmclaire’s results to differ materially from those described in the forward-looking statements can be found in Farmers’ and Emclaire’s Annual ReportReports on Form10-K, Quarterly Reports on Form10-Q and Current Reports on Form8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters and attributable to Farmers or MonitorEmclaire or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-lookingIn addition, these statements speak only as of the date on which such statements are made. Farmers and MonitorEmclaire do not undertake, noand expressly disclaim, any obligation to update or alter any forward-looking statement.statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

THE SPECIAL MEETING OF SHAREHOLDERS OF MONITOREMCLAIRE

Time, Date and Place

This proxy statement/prospectus is being provided to MonitorEmclaire common shareholders in connection with the solicitation of proxies by the MonitorEmclaire board of directors for use at the special meeting of shareholders to be held virtually at 9:00 a.m., local time, on Tuesday, August 8, 2017, at Des Dutch Essenhaus, Shreve, Ohio,[●], 2022, including any adjournments of the special meeting.

Shareholders of record at the close of business on [●], 2022 may attend the virtual special meeting, vote and submit questions during the meeting. You may use your computer or mobile device to access the virtual special meeting on the Internet at https://web.lumiagm.com/294482803. The passcode for the special meeting, which is case sensitive is: emclaire2022. We encourage you to access the meeting prior to the start time to allow for ample time for the check-in process.

If you hold your shares in “street name” through an intermediary, such as a bank or broker, you must register in advance to attend and vote at the special meeting. To register in advance of the special meeting, you must first obtain a valid legal proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a legal proxy form. After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the special meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests can be mailed to:

American Stock Transfer & Trust Company LLC

Attn: Proxy Tabulation Department

6201 15th Avenue

Brooklyn, NY 11219

This proxy statement/prospectus is also being furnished by Farmers to MonitorEmclaire common shareholders as a prospectus in connection with the issuance of Farmers common shares upon completion of the Merger.

Matters to be Considered

At the special meeting, the shareholders of MonitorEmclaire will be asked to consider and vote upon the following matters:

 

a proposal to adopt and approve the Merger Agreement;

 

a proposal to amendapprove, on a non-binding, advisory basis, the Articles of Incorporation priorcompensation that may be paid or become payable to Emclaire’s named executive officers that is based on or otherwise relates to the Merger to eliminate the Right of First Refusal, subject to the condition subsequent that the Merger is consummated on the terms(the “Emclaire compensation proposal”); and conditions contained in the Merger Agreement;

 

a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement.

The board of directors of Emclaire believes that the Merger with Farmers is in the best interests of Emclaire shareholders and recommends that you vote (1) ”FOR” the adoption and approval of the Merger Agreement, (2) “FOR” the Emclaire compensation proposal, and (3) “FOR” the proposal to adjourn the special meeting of Emclaire shareholders, if necessary, to solicit additional proxies.

Record Date; Shares Outstanding and Entitled to Vote

The board of directors of Emclaire has fixed the close of business on [●], 2022, as the record date for determining the Emclaire common shareholders who are entitled to notice of and to vote at the Emclaire special

meeting of shareholders. Only Emclaire shareholders at the close of business on the record date will be entitled to notice of the Emclaire special meeting, and only holders of shares of Emclaire common stock at the close of business on the record date will be entitled to vote at the Emclaire special meeting.

As of the close of business on [●], 2022 there were [2,735,212] shares of Emclaire common stock outstanding and entitled to vote at the special meeting. Each share of Emclaire common stock entitles the holder to one vote on all matters properly presented at the special meeting. Shares of Emclaire common stock were held by approximately [710] shareholders of record.

Votes Required; Quorum

The adoption and approval of the Merger Agreement by Emclaire, pursuant to Emclaire’s Amended and Restated Articles of Incorporation, the PAETL and as a condition precedent to the obligations of the parties to effect the Merger, requires the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the proposal at the special meeting. A quorum, consisting of the holders of a majority of the votes which Emclaire shareholders are entitled to cast, must be present in person or by proxy at the special meeting before any action, other than the adjournment of the special meeting, can be taken. The affirmative vote of a majority of the total votes present, in person or by proxy, at the special meeting is required to approve the Emclaire compensation proposal. The special meeting may be adjourned, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement; and

any other business which properly comes before the special meeting or any adjournment or postponement of the special meeting. The board of directors of Monitor is unaware of any other business to be transacted at the special meeting.

The board of directors of Monitor believes that the Merger with Farmers is in the best interests of Monitor shareholders and recommends that you vote (1) “FOR”the adoption and approval of the Merger Agreement, (2) “FOR” the proposal to conditionally amend the Articles of Incorporation and (3)  “FOR”the proposal to adjourn the special meeting of Monitor shareholders, if necessary, to solicit additional proxies.

Record Date; Shares Outstanding and Entitled to Vote

The board of directors of Monitor has fixed the close of business on June 30, 2017, as the record date for determining the Monitor common shareholders who are entitled to notice of and to vote at the Monitor special meeting of shareholders. Only Monitor shareholders at the close of business on the record date will be entitled to notice of the Monitor special meeting, and only holders of Monitor common shares at the close of business on the record date will be entitled to vote at the Monitor special meeting.

As of the close of business on June 30, 2017, there were 10,000 Monitor common shares outstanding and entitled to vote at the special meeting. The Monitor common shares were held of record by approximately 45 shareholders. Each Monitor common share entitles the holder to one (1) vote on all matters properly presented at the special meeting.

Votes Required; Quorum

The adoption and approval of the Merger Agreement requires the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding and entitled to vote at the special meeting. In addition, the Merger Agreement requires that holders of not less than a majority of the Monitor common shares

outstanding and entitled to vote who are not officers, directors or affiliates of Monitor vote for the adoption and approval of the Merger Agreement. The approval of the proposal to amend the Articles of Incorporation requires the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding and entitled to vote at the special meeting. Approval of an adjournment of the special meeting requires the affirmative vote of the holders of a majority of Monitor’s common shares represented,the total votes present, in person or by proxy, at the special meeting is required to adjourn the special meeting.

As of June 30, 2017,[May 12], 2022, directors and executive officers of MonitorEmclaire beneficially owned an aggregate of 8,271 Monitor[471,020] shares of Emclaire common shares,stock, an amount equal to approximately 82.71%[17.2]% of the outstanding Monitorshares of Emclaire common shares.stock. As of the date of this proxy statement/prospectus, except for Mr. Smail,each of the directors of Emclaire, who, collectively, beneficially own shares of Emclaire common stock entitling them to cast [452,761] votes with respect to each proposal to be presented at the special meeting, entered into voting agreements with Farmers on March 23, 2022, pursuant to which they are required, subject to certain terms and its directors, executive officersconditions, to vote their shares of Emclaire common stock in favor of the adoption and affiliates beneficially owned no Monitor common shares.approval of the Merger Agreement.

Your vote is important. The adoption and approval of the Merger Agreement by Emclaire requires the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding andvotes cast by all Emclaire shareholders entitled to vote on the proposal at the Monitor special meeting and holdersmeeting. The affirmative vote of not less than a majority of the Monitor common shares outstanding and entitled to vote who are not officers, directors or affiliates of Monitor. The proposal to amend the Articles of Incorporation requires to eliminate the Right of First Refusal the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding and entitled to vote at the Monitor special meeting. The proposal to approve adjournment of the Monitor special meeting, if necessary, to solicit additional proxies requires the affirmative vote of at least a majority of the Monitor common shares representedtotal votes present, in person or by proxy, at the Monitorspecial meeting is required to approve the Emclaire compensation proposal and the proposal to adjourn the special meeting. If you fail to return your proxy card or vote in person at the special meeting or if you mark“ABSTAIN”on your proxy card or ballot at the special meeting with respect to the proposal to adopt and approve the Merger Agreement, it will have no effect on the voting on the proposal. If you mark “ABSTAIN” on your proxy card or ballot at the special meeting with respect to the Emclaire compensation proposal or the proposal to adjourn the special meeting, it will have the same effect as a vote ““AGAINST”AGAINST” the adoptionproposal.

The failure to return your proxy card or virtually attend and approval ofvote during the Merger Agreement, butspecial meeting will have no effect on the proposal to adopt and approve the Merger Agreement, the Emclaire compensation proposal in connection with the merger or the proposal to adjourn the special meeting, if necessary, to solicit additional proxies.

You may virtually attend and vote during the special meeting or by proxy. To ensure your representation at the special meeting, Emclaire recommends that you vote by proxy even if you plan to attend the special meeting. You can always change your vote at the special meeting. Voting instructions are included on your proxy form. If you properly complete and timely submit your proxy, your shares will be voted as you have directed.

To assure that your shares of Emclaire common stock will be voted at the meeting, please indicate your voting instructions: (i) over the Internet at www.voteproxy.com, (ii) by telephone at 1-800-776-9437, or (iii) by completing and signing the enclosed proxy card and returning it promptly in the enclosed, postage prepaid,

addressed envelope. No additional postage is required if mailed in the United States. The giving of a proxy will not affect your right to vote during the special meeting if you virtually attend the special meeting.

If your shares are registered directly in your name with Emclaire’s transfer agent, you are a “shareholder of record” or registered holder. If your shares are held through a bank, broker, nominee or other proposal.shareholder of record, you are considered the “beneficial owner” of those shares. If your shares are held by a bank, broker, depositary, trustee or some other nominee, that entity will provide separate voting instructions. If a beneficial owner provides specific voting instructions by mail, telephone, or internet, your nominee will vote your shares as you have directed.

A quorum, consisting of the holders of a majority of the outstanding Monitor common shares,votes which Emclaire shareholders are entitled to cast, must be present, in person or by proxy, at the MonitorEmclaire special meeting before any action, other than the adjournment of the special meeting, can be taken. A properly executed proxy card marked“ABSTAIN”will be counted for purposes of determining whether a quorum is present.

The MonitorEmclaire board of directors does not expect any matter other than the adoption and approval of the Merger Agreement, amendmentapproval of the Articles of IncorporationEmclaire compensation proposal, and, if necessary, the approval of the adjournment of the special meeting to solicit additional proxies, to be brought before the Monitor special meeting.proxies. If any other matters are properly brought before the special meeting for consideration, Monitorthe shares of Emclaire common sharesstock represented by properly executed proxy cards will be voted, to the extent permitted by applicable law, in the discretion of the persons named in the proxy card in accordance with their best judgment.

Solicitation and Revocation of Proxies

A proxy card accompanies each copy of this proxy statement/prospectus mailed to MonitorEmclaire shareholders. Your proxy is being solicited by the board of directors of Monitor.Emclaire. Whether or not you attend the special meeting, the MonitorEmclaire board of directors urges you to return your properly executed proxy card as soon as possible. If you return your properly executed proxy card prior to the special meeting and do not revoke it prior to its use, the Monitorshares of Emclaire common sharesstock represented by that proxy card will be voted at the special meeting or, if appropriate, at any adjournment of the special meeting. Monitor’sShares of Emclaire common sharesstock will be voted as specified on the proxy card or, in the absence of specific instructions to the contrary, will be voted“FOR”the adoption and approval of the Merger Agreement, ““FOR”FOR” the amendmentapproval of the Articles of IncorporationEmclaire compensation proposal, and“FOR”the approval of the adjournment of the special meeting, if necessary, to solicit additional proxies.

If you have returnedAn Emclaire shareholder who votes via the Internet or telephone or returns a properly executed proxy card, youvia mail may revoke it at any time before a voteit is takenvoted at the special meeting by:

filing a (i) delivering written notice of revocation with the President of Monitor, at 13210 State Route 226, Big Prairie, Ohio 44611;

to Jennifer A. Poulsen, Secretary, Emclaire Financial Corp., 612 Main Street, Post Office Box D, Emlenton, Pennsylvania 16373, telephone: (844) 767-2311; (ii) executing and returning anothera later-dated proxy; (iii) voting again via the Internet or telephone, or (iv) attending the virtual special meeting and voting during the meeting after giving written notice to the Secretary of Emclaire. Only the latest dated written proxy, card withor Internet or telephone proxy submitted by a later date; or

attendingshareholder prior to the special meeting and giving notice of revocation in person.
will be counted.

Your attendance at the special meeting will not, by itself, revoke your proxy.

Monitor will bearEmclaire has engaged Alliance Advisors to act as its own cost ofproxy solicitor and to assist in the solicitation of proxies on behalffor the special meeting. Emclaire has agreed to pay approximately $6,000 plus reimbursement for certain expenses for such services and also will indemnify Alliance Advisors against certain claims, costs, damages, liabilities, judgments and expenses. Emclaire may reimburse banks, brokerage firms, other nominees or their respective agents for their expenses in forwarding proxy materials to beneficial owners of the Monitor board of directors. Proxies will be solicited by mail, and may be further solicited by additional mailings, personal contact, telephone, facsimile or electronic mail, byEmclaire common stock.

Emclaire’s directors, officers and employees also may solicit proxies by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. Emclaire will also request that

brokerage houses and other custodians, nominees and fiduciaries send these proxy materials to beneficial owners of Monitor, none of whomEmclaire common stock. Emclaire will receive additional compensationupon request, reimburse such brokerage houses and custodians for their reasonable expenses in assisting with the solicitation activities.

of proxies.

If you have any additional questions about the Merger, need assistance in submitting your proxy or voting your shares of Emclaire common stock or need additional copies of this proxy statement/prospectus or the enclosed proxy card, please contact Alliance Advisors, Emclaire’s proxy solicitor, by calling 833-757-0767, or by email to emcf@allianceadvisors.com.

PROPOSALS SUBMITTED TO MONITOREMCLAIRE SHAREHOLDERS

Merger Proposal

As discussed throughout this proxy statement/prospectus, MonitorEmclaire is asking its common shareholders to adopt and approve the Merger Agreement. The adoption and approval of the Merger Agreement by Monitor, as required underEmclaire, pursuant to the OGCLPAETL and as a condition precedent to the obligations of the parties to effect the Merger, requires the affirmative vote of the holders of not less than a majority of the Monitor common shares outstanding andvotes cast by all Emclaire shareholders entitled to vote on the proposal at the Monitor special meeting. In addition,Each share of Emclaire common stock entitles the holder to one vote on the proposal to adopt and approve the Merger Agreement requires that not less than a majority of the 1,572 Monitor common shares outstanding and entitled to vote which are held by persons who are not officers, directors or affiliates of Monitor must be voted for the adoption and approval of the Merger Agreement as a condition precedent to the obligations of the parties to effect the Merger; provided, however, that the condition requiring this Approval by Nonaffiliated Shareholders may be waived by all the parties pursuant to a written instrument signed by each party.Agreement.

MonitorEmclaire common shareholders should carefully read this document in its entirety for more detailed information regarding the Merger Agreement and the Merger. In particular, shareholders are directed to the copy of the Merger Agreement attached asAnnex BA to this proxy statement/prospectus.

The board of directors of MonitorEmclaire recommends a vote“FOR”the proposal to adopt and approve the Merger Agreement.

AmendmentAdvisory Approval of ArticlesExecutive Compensation to be Paid in the Merger

In accordance with Section 14A of Incorporation Proposal

As discussed throughoutthe Exchange Act, Emclaire is providing its shareholders with the opportunity to cast an advisory vote on the compensation that may be payable to its named executive officers in connection with the Merger, as disclosed in the section of this proxy statement/prospectus Monitorcaptioned “THE MERGER — Golden Parachute Compensation,” beginning on page [●] of this proxy statement/prospectus, and the related tables and narratives. Emclaire is asking its common shareholders to adopt and approve a proposal to amend Monitor’s Articles of Incorporation prior tovote on the closingadoption of the following resolution:

“RESOLVED, that the shareholders of Emclaire Financial Corp. approve, on an advisory (nonbinding) basis, the agreements for and compensation to be paid by Emclaire Financial Corp. to Emclaire’s named executive officers in connection with the Merger to eliminatewith Farmers National Banc Corp., as disclosed in the Rightsection of First Refusal provisions (a copy of which is set forth inAnnex C to thisthe proxy statement/prospectus), subjectprospectus for the Merger captioned “The Merger—Golden Parachute Compensation.””

The approval of the executive compensation to the condition subsequent thatbe paid by Emclaire in the Merger is consummatednot a condition to the Merger and is a vote separate and apart from the vote to approve the Merger Agreement proposal. In addition, because the vote on the terms and conditions containedexecutive compensation to be paid in the Merger Agreement. Pursuantis advisory in nature only, it will not be binding on Emclaire. Because Emclaire is contractually obligated to pay the compensation, such compensation will be payable, subject only to the Right of First Refusal, any Monitor shareholder who desires to sell Monitor common shares must first notify the Secretary of Monitor, who in turn must notify each other Monitor shareholder. The other Monitor shareholders would then have fifteen days to determine whether to purchase all or any part of the offered Monitor common shares. The Monitor shareholder desiring to sell Monitor common shares could do so, to the extent those shares were not purchased by other Monitor shareholders, only after satisfaction of the requirements set forth in the Right of First Refusal. As the Merger contemplates a sale of Monitor common shares by each Monitor shareholder, this process would have to be repeated for each Monitor shareholder before the Merger could be consummated. The board of directors of Monitor has determined that the application of the Right of First Refusal in the context of the Merger would add unnecessary cost and delay, and ultimately could frustrate consummation of the Merger. In addition, the board of directors also believes that the protections intended to be provided by the Right of First Refusal are not necessary in the context of the Merger, as each Monitor shareholder would have the opportunity to receive the same consideration as any other Monitor shareholderconditions applicable thereto, if the Merger is consummatedcompleted and would result in those shareholders owning an interest in a business enterprise having attributes that are materially different than those of Monitor.

If the Merger is not consummated on the terms and conditions contained in the Merger Agreement, regardless of the reason, the board of directors of Monitor has determined that it will abandon the filingoutcome of the amendment contemplated by this proposal, and the Right of First Refusal provisions shall remain a provision of Monitor’s Articles of Incorporation.advisory vote.

Monitor common shareholders should carefully read this document in its entirety for more detailed information regarding the proposal to eliminate the Right of First Refusal, and in particular, shareholders are directed to the copyThe affirmative vote of the Rightholders of First Refusal provisions attacheda majority of the total votes present, in person or by proxy, will be required to approve the advisory resolution on executive compensation to be paid in the Merger. Abstentions will be counted towards a quorum but will have the same effect asAnnex C to a vote “AGAINST” this proxy statement/prospectus.proposal.

The board of directors of MonitorEmclaire recommends a vote ““FOR”FOR” the amendment proposal.proposal to approve on an advisory basis the compensation that may be paid or become payable to Emclaire’s named executive officers in connection with the Merger, and the agreements and understandings pursuant to which such compensation may be paid or become payable.

Adjournment Proposal

The special meeting may be adjourned to another time or place, if necessary or appropriate, to permit, among other things, the solicitation of additional proxies if there are insufficient votes at the time of the special

meeting to approve and adopt the Merger Agreement. If, at the time of the special meeting, the number of common shares of MonitorEmclaire common stock present or represented and voting in favor of the Merger Agreement proposal is insufficient to approve and adopt the Merger Agreement, MonitorEmclaire intends to move to adjourn the special meeting in order to enable the MonitorEmclaire board of directors to solicit additional proxies for approval of the proposal. In that event, MonitorEmclaire will ask the MonitorEmclaire common shareholders to vote only upon the adjournment proposal and not the mergerMerger proposal.

In the adjournment proposal, MonitorEmclaire is asking its common shareholders to authorize the holder of any proxy solicited by the MonitorEmclaire board of directors to vote in favor of granting discretionary authority to the proxy holders to adjourn the special meeting to another time and place for the purpose of soliciting additional proxies. If the MonitorEmclaire common shareholders approve the adjournment proposal, MonitorEmclaire could adjourn the special meeting and any adjourned session of the special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from MonitorEmclaire common shareholders who have previously voted.

The affirmative vote of the holders of a majority of the total votes present, in person or by proxy, at the special meeting is required to adjourn the special meeting.

The MonitorEmclaire board of directors recommends a vote“FOR”the MonitorEmclaire adjournment proposal.

Other Matters to Come Before the Special Meeting

No other matters are intended to be brought before the special meeting by Monitor,Emclaire and MonitorEmclaire does not know of any matters to be brought before the special meeting by others. If, however, any other matters properly come before the special meeting, the persons named in the proxy will vote the shares of common sharesstock represented thereby in accordance with their best judgment on any such matter.

DISSENTERS’ RIGHTSTHE MERGER

Rights of Dissenting Monitor Shareholders

Shareholders of Monitor are entitled toThe following discussion contains certain dissenters’ rights pursuant to Sections 1701.84(A)information about the merger. The discussion is subject, and 1701.85 of the OGCL. Section 1701.85 generally provides that shareholders of Monitor will not be entitled to such rights without strict compliance with the procedures set forth in Section 1701.85, and failure to take any one of the required steps may result in the termination or waiver of such rights. Specifically, any Monitor shareholder who is a record holder of Monitor shares on May 15, 2017, the record date for the special meeting, and whose shares are not voted in favor of the adoption of the Merger Agreement may be entitled to be paid the “fair cash value” of such Monitor shares after the effective time of the Merger. To be entitled to such payment, a shareholder must deliver to Monitor a written demand for payment of the fair cash value of the common shares held by such shareholder, before the vote on the Merger proposal is taken, the shareholder must not vote in favor of approval and adoption of the Merger Agreement, and the shareholder must otherwise comply with Section 1701.85. A Monitor shareholder’s failure to vote against the adoption and approval of the Merger Agreement will not constitute a waiver of such shareholder’s dissenters’ rights. Any written demand must specify the shareholder’s name and address, the number and class of shares held by him, her or it on the record date, and the amount claimed as the “fair cash value” of such Monitor common shares. See the text of Section 1701.85 of the OGCL attached asAnnex A to this proxy statement/prospectus for specific information on the procedures to be followed in exercising dissenters’ rights.

If Monitor so requests, dissenting shareholders must submit their share certificates to Monitor within fifteen (15) days of such request, for endorsement on such certificates by Monitor that a demand for appraisal has been made. Failure to comply with such request will terminate the dissenting shareholders’ rights. Such certificates will be promptly returned to the dissenting shareholders by Monitor. If Monitor and any dissenting shareholder

cannot agree upon the “fair cash value” of Monitor’s shares, either may, within three (3) months after service of demand by the shareholder, file a petition in the Court of Common Pleas of Holmes County, Ohio, for a determination of the “fair cash value” of such dissenting shareholder’s Monitor shares. The fair cash value of a Monitor share to which a dissenting shareholder is entitled to under Section 1701.85 will be determined as of the day prior to the vote of the Monitor shareholders. Investment banker opinions to company boards of directors regarding the fairness from a financial point of view of the consideration payable in a transaction such as the Merger are not opinions regarding, and do not address, “fair cash value” under Section 1701.85.

If a Monitor shareholder exercises his, her or its dissenters’ rights under Section 1701.85, all other rights with respect to such shareholder’s Monitor shares will be suspended until Monitor purchases the shares, or the right to receive the fair cash value is otherwise terminated. Such rights will be reinstated should the right to receive the fair cash value be terminated other than by the purchase of the shares.

The foregoing description of the procedures to be followed in exercising dissenters’ rights available to holders of Monitor’s shares pursuant to Section 1701.85 of the OGCL may not be complete and is qualified in its entirety by reference, to the full text of Section 1701.85Merger Agreement attached asAnnex A to this proxy statement/prospectus.

THE MERGERprospectus and incorporated herein by reference. We urge you to read carefully this entire proxy statement/prospectus, including the Merger Agreement attached as Annex A, for a more complete understanding of the Merger.

The Proposed Merger and Subsidiary Bank Merger

The Merger Agreement provides for the merger of MonitorEmclaire with and into Merger Sub, a newly-formed, wholly-owned subsidiary of Farmers (the “Merger”), with Merger Sub as the surviving entity. Thereafter, Merger Sub promptly will be dissolved and liquidated and, at a later time as soon as practicable as specified by Farmers Bank and certified by the OCC, MonitorEmlenton Bank will be merged with and into Farmers Bank, with Farmers Bank surviving the subsidiary bank merger.

The Merger Agreement is attached to this proxy statement/prospectus asAnnex BA and is incorporated in this proxy statement/prospectus by reference.You are encouraged to read the Merger Agreement carefully, as it is the legal document that governs the Merger.

Background of the Merger

OnFrom time to time over the past several occasionsyears, Emclaire’s board of directors has periodically discussed and reviewed Emclaire’s business, performance and prospects and has considered various strategic alternatives. In the context of such reviews, the strategic alternatives considered by Emclaire’s board of directors have included continuing its on-going operations as an independent institution, acquiring other depository institutions, branch offices or other financial services firms engaged in complementary lines of business and entering into a strategic merger with a similarly sized or larger institution. The Emclaire board of directors also periodically reviewed, often with input from an investment banking firm, the competitive environment in Emclaire��s market area and merger and acquisition activity in the late summerfinancial services industry in general and fallin the western Pennsylvania market area in particular.

In addition, William C. Marsh, Chairman, President and Chief Executive Officer of 2016,Emclaire, has for the past several years periodically met informally with members of senior management, generally the chief executive officer, of other financial institutions to discuss the state of the industry and related matters as well as the strategic direction of Emclaire, including the possible interest in discussing a business combination. Mr. Marsh met informally with Kevin J. Helmick, President and Mr. Smail had preliminary discussions asChief Executive Officer of Farmers, on various occasions beginning in June 2021. No specifics regarding any potential transaction were discussed at those informal meetings.

On October 25 and 26, 2021, the Emclaire board of directors held a strategic retreat at an offsite location to whether it might make senseundertake a review of Emclaire’s results of operations, business, performance and prospects. Among other things, the Emclaire board of directors considered the current and prospective environment in which Emclaire operates, the current competitive environment for bothfinancial institutions, if Monitor were to sell to Farmers, which Mr. Helmick reported on each occasionincreased regulatory burdens and the uncertain operating climate going forward. At the retreat, a consulting firm made a presentation to the remaining membersboard concerning Emclaire’s operating model and future prospects as an independent company. A representative of Farmers’ executive committee, Lance CiroliRaymond James, an investment banking firm, also made a presentation at the meeting to assist the board of directors in analyzing the various potential strategic alternatives available to Emclaire. Raymond James provided the board with an overview of the financial institution industry in Emclaire’s market area, its assessment of merger and Terry Moore. Monitor had previously considered whether it might eventually beacquisition activity in the best interestregion and on a nationwide basis, and its assessment of potential business combination transactions that might be available to Emclaire.

After considering the presentations made at its shareholders to sell to a bigger bank in lightstrategic retreat by Mr. Marsh, the Chairman of the challengesBoard, Raymond James and others, Emclaire’s board of profitably operating a bank of Monitor’s size. Monitor’s interest in selling had become more pressing given the fact that two key members of its management team were nearing retirement, and Monitor’s board feltdirectors determined that it would be difficultin Emclaire’s best interest to replace them. In addition, Monitor’snegotiate a potential transaction with one of four potential partners selected by the board periodically discussedof directors following the very illiquid naturemeeting. The four institutions were selected based upon, among other factors, their financial strength and the anticipated ability of itssuch potential acquirer to pay more fulsome merger consideration compared to other potential acquirors, their acquisition track record, the products and services offered to their customers and their revenue sources, the potential for future appreciation in the stock of such potential acquirors, the greater liquidity of their stock and the low tax basisopportunities for Emlenton Bank’s employees and the communities served by Emclaire. On October 26, 2021, Emclaire retained Raymond James as its exclusive financial advisor and investment banker in connection with any business combination transaction that Emclaire might determine to pursue and directed Raymond James to approach those parties to evaluate their interest in engaging in a business combination transaction with Emclaire and, if interested, to negotiate a potential business combination.

In late-October through early-November, Raymond James worked with senior management of most of its shareholders, which would lead themEmclaire to prefer a combination in which a significant percentage of the considerationprepare confidential marketing materials and to establish an electronic data room that could be paidaccessed by interested parties who executed non-disclosure agreements.

In early-November, Raymond James contacted the four potential business combination partners that had been identified in stock. Farmers had discussed the favorable experience it hadorder to assess their level of interest in discussing a possible transaction with its entrance into Wayne County asEmclaire. As a result of its 2015 merger with National BancsharesRaymond James’ inquiries, all of Orrville.the four institutions contacted, including Farmers, feltexecuted a non-disclosure agreement (“NDA”) and, on November 12, 2021, received information relating to Emclaire’s operations and financial performance. Following a review of the materials provided, two of the four institutions that expanding into contiguous Holmes County could also make sense strategically at some point, and it knewexecuted a NDA indicated that Monitor had been doing some lendingthey were not interested in Wooster (Wayne County), where Monitor hadpursuing a loan production office. Mr. Smail,business combination transaction for various reasons.

On November 19, 2021, Mr. Helmick and the remainingother members of Farmers’ senior management team engaged investment banking firm Janney Montgomery Scott LLC (“Janney”) to advise Farmers executive committee members were acutely awarein connection with a potential transaction with Emclaire. On November 23, 2021, a representative of Janney made a presentation at a meeting of the conflictFarmers board of interest issues arising from Mr. Smail’s positions as a director and largest shareholderdirectors of both Monitor and Farmers, and Mr. Smail understood that he could not participate as a directorJanney’s assessment of Farmers in any of the discussions or decisions relating to a potential transaction.

Both Farmers and Monitor discussed market conditions during this time periodbusiness combination transaction with Emclaire. On December 8, 2021, the Executive Committee of Farmers’ board of directors met with representatives of Boenning & Scattergood (“Boenning”), a nationally recognized investment banking firm that had a relationship with both companies. Although it was understood that Boenning would ultimately represent Farmers if a transaction were to proceed, both boards requested market information from Boenning with respect to small bank M&A transactionsJanney and other factors affecting the market for bank stocks. Boenning served as an informal advisor in discussing how a potential transaction might look from a financial standpoint. On October 25, 2016, representatives of Boenning andFarmers’ legal counsel, Vorys, Sater, Seymour and Pease LLP (“Vorys”), to discuss a draft indication of interest, its key proposed financial terms and the impact of such a transaction on the shareholders and employees of Farmers and the community in which it conducts business. The Executive Committee unanimously authorized Farmers’ management to enter into the non-binding indication of interest and proceed with discussions with Emclaire about a potential acquisition.

On December 10, 2021, the two remaining parties that had signed NDAs, including Farmers, submitted non-binding indications of interest to acquire Emclaire. Farmers’ indication of interest proposed a transaction with a purchase price of $40 per share consisting of 70% in Farmers common shares and 30% in cash, at the election of the holder, or approximately $111.6 million consideration in the aggregate. The other institution submitted an initial indication of interest for a proposed transaction with a proposed purchase price of $33.16 per share, consisting of 50% in stock and 50% in cash, with an aggregate value of $93.1 million.

The Emclaire board of directors met on December 15, 2021 to consider the two non-binding indications of interest that had been received. Representatives of Raymond James and Emclaire’s outside legal counsel, Silver, Freedman, Taff & Tiernan LLP (“Silver Freedman”), participated in the board meeting. Raymond James reviewed with Emclaire’s board of directors the process that had been undertaken to date and then reviewed in detail the two indications of interest that had been received from Farmers and the other company. Raymond James reviewed with the board an overview of each of the parties that submitted indications of interest on a stand-alone as well as a pro-forma basis when combined with Emclaire. Silver Freedman advised the board as to its fiduciary duties and responsibilities in considering a change in control under Pennsylvania law. Members of the Emclaire board of directors asked various questions of Raymond James and Silver Freedman. Based on its review of the two indications of interest, the results of the process conducted by Raymond James on Emclaire’s

behalf, and the potential benefits and risks of a merger of Emclaire with and into Farmers, the Emclaire board of directors determined to continue its discussions solely with Farmers and to permit it to conduct additional due diligence. The other institution was advised that, based on its initial indication of interest, Emclaire was not interested in continuing discussions on a business combination.

On December 16, 2021, the Executive Committee of Farmers’ board of directors met again with representatives of Janney and Vorys to discuss a revised indication of interest and unanimously authorized management to enter into the revised non-binding indication of interest and proceed with discussions with Emclaire about a potential acquisition.

Following the Emclaire board’s determination to continue pursuing a business combination with Farmers, Raymond James continued discussions with Farmers’ financial advisor, Janney, regarding, among other factors, Farmers’ proposed pricing included in its bid. On December 21, 2021, Farmers provided an updated indication of interest letter whereby it proposed a purchase price within a range of $40 to $41 per share of Emclaire common stock, with consideration to consist of 70% of Farmers common shares and 30% in cash, at the election of the Emclaire shareholder, providing for an aggregate consideration of $111.6 million to $114.3 million. Farmers and Emclaire signed the revised indication of interest on December 21, 2021.

In January 2022, Farmers’ credit due diligence team engaged Strategic Risk Associates (“SRA”) to conduct credit due diligence on Emclaire’s loan portfolio. SRA’s primary objective was to provide an estimate of legacy loan losses for Most Likely (Base) and Downside Case scenarios. The week of January 17, 2022, the Farmers credit due diligence team, with SRA’s assistance, also conducted on-site due diligence. During January and February 2022, Emclaire provided extensive due diligence information through its virtual data room to Farmers.

On February 8, 2022, senior management of Emclaire and Farmers met at Farmers’ executive offices, along with their respective financial advisors, to conduct in person due diligence interviews of both parties. In addition, senior management of Emclaire as well as Raymond James and Silver Freedman conducted a due diligence review of various documents Farmers had provided through an electronic data room. Emclaire determined to continue its discussions with Farmers and requested that Farmers have its counsel prepare and deliver a draft definitive merger agreement to Emclaire and its legal counsel.

Farmers’ legal counsel, Vorys, provided an initial draft of the Merger Agreement to Farmers financial advisor, Janney, who, on February 24, 2022, forwarded the draft to Raymond James. Silver Freedman reviewed the draft merger agreement with both Emclaire and representatives of Raymond James and provided comments on the draft merger agreement to Vorys. The draft merger agreement provided consideration for each Emclaire common share of either $40 in cash or 2.15 shares of Farmers common stock, at the election of the holder, subject to total consideration consisting of 70% in Farmers common shares and 30% in cash. Due to changes in overall market conditions and the decrease in the price of Farmers common shares since its indication of interest in December 2021, this fixed exchange ratio represented a lower implied value then the stock consideration that was offered in December 2021. From receipt of the initial draft agreement through March 21, 2022, Farmers and Emclaire, with the assistance of their respective legal counsels and financial advisors, continued to negotiate the terms of the definitive merger agreement and related documents. In addition, Farmers and Emclaire, with the assistance of their respective legal counsel and financial advisors, continued to discuss various matters related to the proposed combination of Farmers and Emclaire, including the proposed fixed exchange ratio.

Farmers’ board of directors met on March 22, 2022, for its regular monthly meeting. During the meeting the directors reviewed the terms of the Merger Agreement and the various related agreements contemplated by the Merger Agreement. The Farmers board (Mr. Smail recused himselfof directors received presentations regarding the Merger Agreement from all Farmers’ financial advisor, Janney, and from its legal counsel, Vorys. Legal counsel, Janney and senior management of Farmers also briefed the board of directors on the results of the due diligence review conducted on Emclaire. Legal counsel advised the board of directors on the terms of the Merger Agreement and fiduciary duties relating thereto. Representatives of Janney and Vorys responded to questions from, and participated in

discussions and deliberations about a possible transaction).with, the directors. At the October 25 meeting, Janney presented its opinion that the Farmers board authorized its executive committee (except for Mr. Smail) to prepare anon-binding letter of intent to submit to Monitor.

On November 2, 2016, Farmers submitted thatnon-binding letter of intent to Monitor, calling for 85% of theMerger consideration to be paid inreceived by shareholders of Farmers stock with an exchange ratio based onwas fair. After careful and deliberate consideration of the presentations by Farmers’20-day volume weighted average trading price as of November 1, which was $10.70 per share. The implied price per shares for Monitor was $702.65, which was 115% of Monitor’s projected December 31, 2016 tangible book value, assuming the sale by Monitor of Lifetime Financial Advisors, LLC, a 50%-owned subsidiary doing business as the Monitor Wealth Group. Monitor subsequently executed the letter of intent on November 8, 2016. The Farmers board instructed its counsel, Vorys to prepare a draft definitive agreement for consideration by the board. Farmers formally engaged Boenning as its financial advisor on November 17, 2016.

Over the ensuing weeks, Monitor provided additional information in order to facilitate Farmers’ due diligence review, and the companies continued to discuss structuring options that would enable Farmers to issue stock as consideration in the most efficient manner possible. Farmers performedon-site diligence at Monitor’s office on December 2, 2016.

During this same period, following the U.S. presidential election, publicly-traded bank stocks experienced a significant increase in trading values. Farmers’ stock price had increased by almost 40% in five (5) weeks following the election, which, based on the fixed exchange ratio in thenon-binding letter of intent, would imply a deal value and transaction multiples that were no longer in line with recent comparable transactions. At a meeting on December 13, 2016, the Farmers board (with Mr. Smail recused throughout) discussed the possible implications of proceeding with and announcing a transaction at such elevated multiples and determined that it would not be in Farmers’ best interests to do so. The board also had concerns about its ability to receive a fairness opinion at the current implied price.

The board instructed Boenning to contact Monitor and determine whether it might be possible to alter the proposed structure in a way that might be acceptable to both companies. Though the companies considered a number of potential adjustments to the proposed purchase price and deal structure, they ultimately agreed to a cooling off period of several weeks to see if the post-election inflation in the bank stock market would subside.

By late January 2017, the bank stock market had moderated somewhat. Farmers’ board met on January 24, 2017, and considered where Farmers’ stock and the overall market were trading,legal counsel as well as the impactinterests of higher bank stock prices on a numberFarmers’ shareholders, customers, employees and the communities served by Farmers, the board of bank transactions that had been announced since Farmers’ previous board meeting. The Board authorized its executive committee tore-engage in merger discussions with Monitor.

After considering a varietydirectors of pricing mechanisms that would provide Monitor with incremental value fromFarmers unanimously approved the transaction structure inMerger Agreement and thenon-binding letter of intent in acknowledgement of the increase in Farmers’ stock price, while also protecting both companies from potential future volatility in Farmers’ stock, on February 13, 2017, Farmers submitted a revisednon-binding letter of intent with a collar mechanism that would adjust the exchange ratio at closing based on Farmers’ then-current stock price to lock aggregate consideration into a range of 115% – 125% of Monitor’s March 31, 2017, tangible book value (again including the sale of Monitor Wealth Group). Based on a projection of Monitor’s March 31, 2017, tangible book value, Farmers estimated the per share consideration to be $779.02. Monitor signed the revisednon-binding letter of intent on February 15, 2017. The Farmers board instructed Vorys to work with Monitor’s legal counsel to review and revise the draft definitive agreement Vorys had initially prepared in December to prepare a definitive agreement for consideration by the respective boards. related documents.

During the time period beginning on February 22, 2017,afternoon of March 23, 2022, the boards of directors of Emclaire and ending on March 12, 2017, Vorys and Critchfield, Critchfield & Johnston, Ltd, counselEmlenton Bank met in a special meeting in order to Monitor (“Critchfield”), withreview the participation of management from each party and Boenning, proceeded to negotiate the Merger Agreement. Several draftsterms of the Merger Agreement, were exchanged between Vorys and Critchfield and several telephonic negotiating sessions occurred. Also, during this time period,including the Merger consideration of either 2.15 shares of Farmers common stock or $40 in cash to be received for each party prepared, circulated and finalized its disclosure schedules listingshare of Emclaire common stock upon consummation of the Merger, subject to certain exceptions to the representations and warranties containedallocation procedures in the Merger Agreement.

On February 28, 2017, Farmers’ boardAgreement intended to ensure that 70% of directors (with Mr. Smail recused throughout) held a meeting to considerthe Merger consideration would consist of Farmers common shares and act upon30% in cash, and the various related agreements contemplated by the Merger Agreement. The Emclaire and the Emlenton Bank boards received presentations regarding the proposed Merger Agreement from Emclaire’s financial advisor, Raymond James, and from its legal counsel, Silver Freedman. Legal counsel, Raymond James and senior management of Emclaire also briefed the boards on the results of the due diligence review conducted on Farmers. Representatives of Raymond James and consider Boenning’s fairness analysisSilver Freedman responded to questions from, and opinion. Among other things,participated in discussions with, the following occurred atdirectors. At the meeting:

Vorys reviewed, in detail,meeting, Raymond James presented its opinion that the proposedMerger consideration to be received by shareholders of Emclaire was fair to Emclaire’s shareholders from a financial point of view. After careful and deliberate consideration of the presentations by Emclaire’s financial advisor and legal counsel as well as the interests of Emclaire’s shareholders, customers, employees and the communities served by Emclaire, the board of directors of Emclaire unanimously approved the Merger Agreement and respondedthe related documents. The board of directors of Emlenton Bank also unanimously approved the bank merger agreement and the related documents.

Following the meeting of Emclaire’s board of directors on March 23, 2022, the Merger Agreement and related documents were executed and on March  24, 2022 prior to directors’ questions. Vorys also reviewed the fiduciaryopening of market trading, the parties issued a joint press release announcing the Merger.

Emclaire’s Reasons for the Merger

The board of directors of Emclaire has considered the terms and provisions of the Merger Agreement and concluded that they are fair to the shareholders of Emclaire and that the Merger is in the best interests of Emclaire and its shareholders.

In reaching its decision to approve the Merger Agreement, the Emclaire board of directors consulted with Emclaire’s management, as well as with Emclaire’s financial and legal obligations applicableadvisors, and considered a variety of factors, including the following:

The review undertaken by the Emclaire board of directors, with the assistance of Emclaire’s financial and legal advisors, with respect to the strategic alternatives available to Emclaire;

The challenges facing Emclaire as an independent institution and the Emclaire board of directors’ belief that combining with a larger financial institution will benefit Emclaire’s shareholders and the customers and communities served by Emlenton Bank;

The challenges to Emclaire in continuing to increase its net income levels each quarter at or above its current trend and the substantial management, financial and employee resources that would be required to execute Emclaire’s strategic plan, the length of time it would take to achieve the objectives of its strategic plan and the risks and challenges inherent in the successful execution of its strategic plan;

The consideration being offered to Emclaire’s shareholders in relation to the market price, tangible book value per share and earnings per share of Emclaire;

The fact that the implied value of the Merger consideration offered by Farmers as of March 22, 2022 (the closing price on the day before the Emclaire board of directors when considering suchmeeting) of $38.23 for each share

of Emclaire common stock represented a premium of 36.3% over the closing price of Emclaire common stock on March 22, 2022 and the uncertainty whether or when the Emclaire common stock would trade at a level equal to the implied value of the Merger consideration;

The results that could be expected to be obtained by Emclaire if it continued to operate independently and the potential future trading value of Emclaire common stock compared to the value of the Merger consideration offered by Farmers and the potential future trading value of the Farmers common shares;

The fact that 70% of the aggregate Merger consideration would be in stock based upon a transaction, and discussedfixed exchange ratio, which would allow Emclaire shareholders who receive Farmers common shares in the Merger to participate in the future performance of the combined company;

The cash/stock election provisions in the Merger Agreement providing Emclaire shareholders with an ability to choose the form of consideration that they wish to receive, subject to the overall 70%/30% stock/cash allotment;

The limited prospects for Emclaire to grow its franchise through additional acquisitions given the relatively limited number of acquisition prospects available to Emclaire in western Pennsylvania as well as the prospective level of book value dilution likely to be incurred by Emclaire in any acquisition of another depository institution;

The results of management’s due diligence inquiry into Monitor.discussions with potential merger partners contacted by Raymond James, Emclaire’s financial advisor;

 

Boenning’s representatives presented

The current and prospective environment in which Emclaire operates, including national, regional and local economic conditions, the competitive environment for financial institutions, the increased regulatory burdens on financial institutions, and the uncertainties in the regulatory climate going forward;

The scale, scope, strength and diversity of operations, product lines and delivery systems that could be achieved by combining Emclaire with Farmers;

The complementary geographic locations of the Emclaire and Farmers branch networks;

Farmers’ asset size and capital position, which would give the resulting institution over $5 billion in assets;

The earnings prospects of the combined companies and the accretion to Emclaire’s earnings per share and dividend on an exchange ratio adjusted basis;

The additional products offered by Farmers to its fairness analysis.

Boenning deliveredcustomers and the ability of the resulting institution to provide comprehensive financial services to its oralcustomers;

Emclaire’s and Farmers’ shared community banking philosophies; and

Raymond James’ opinion dated March 23, 2022 that, as of February 28, 2017, and based on current assumptions,such date, the Merger consideration was fair to FarmersEmclaire’s shareholders from a financial point of view. The opinion is attached as Annex B to this document. For a summary of the presentation of Raymond James, see “Opinion of Emclaire’s Financial Advisor” below.

TheOther factors considered by Emclaire’s board of directors reviewed, considered,included:

The reports of Emclaire’s management and discussed a draftthe financial presentation by Raymond James to Emclaire’s board of directors concerning the operations, financial condition and prospects of Farmers and the expected financial impact of the Merger Agreementon the combined company, including pro forma assets, earnings, deposits and capital ratios;

The proposed board arrangements of the combined company, including the proposed inclusion of a current director of Emclaire on Farmers’ board;

The likelihood of successful integration and the fairness analysis and fairness opinion. At the conclusionsuccessful operation of the meeting,combined company;

The likelihood that the regulatory approvals needed to complete the transaction will be obtained;

The potential cost-saving opportunities;

•

The ability of Emclaire to terminate the Merger Agreement if the trading price of Farmer’s common stock declines under certain circumstances, as more fully described under the section “THE MERGER AGREEMENT –Termination; Termination Fee” beginning on page [●];

The effects of the Merger on Emclaire’s employees, including the prospects for continued employment and the severance and other benefits agreed to be provided to Emclaire employees; and

The review by the Emclaire board of directors (with Mr. Smail recused):

determined that the Merger, the Merger Agreementwith its legal and the Merger consideration were fair to Farmers and that entering into the Merger Agreement and completing the Merger and the other transactions contemplated by the Merger Agreement was in the best interest of Farmers and its shareholders, based on the evaluation and consideration of all reports and information available to the board of directors as of the date of the meeting and all factors that the board of directors deemed relevant, including, without limitation, the fairness opinion;

authorized and approved the Merger and all other transactions contemplated by the Merger Agreement; and

authorized officers of Farmers to continue to negotiate, finalize, execute and deliver the Merger Agreement.

Before the market opened on March 13, 2017, Farmers and Monitor executed and delivered the Merger Agreement and respective disclosure schedules, and the companies issued a joint press release announcing execution of the Merger Agreement and the terms of the Merger.

Monitor’s Reasons for the Merger

As part of its continuing efforts to provide services to Monitor’s depositors, borrowers and the communities it serves, Monitor’s board of directors has considered various strategic options, including the possibility of seeking an affiliation with another financial institution. Due to its small size, Monitor Bank has found it increasingly challenging to compete with larger financial institutions and to maintain the extensive compliance systems necessary to meet the requirements of the regulations adopted in the more stringent banking environment. There has been, and continues to be, substantial consolidation in the financial services industry. Monitor’s board of directors felt it would be appropriate to evaluate its strategic options and believes that it is appropriate and in the best interests of Monitor’s shareholders to proceed with the Merger.

Management of both Farmers and Monitor believe the Merger will be consistent with Monitor’s operating strategy, which includes its commitment to community banking. The parties agree that the Merger fits within Farmers’ goal to expand its business into Holmes County and continue to develop a leading Northeastern Ohio banking franchise with a strong regional presence and brand recognition.

The benefitadvisors of the structure of the Merger includesand the migrationfinancial and other terms of operational functions, such as regulatory compliance, audit functions, technologythe Merger, including the Merger consideration and disaster recover, data processing and employee benefits to Farmers. The parties believethe condition that the Merger must qualify as a reorganization under section 368(a) of the Internal Revenue Code, which will facilitate economiespermit Emclaire’s shareholders who receive Farmers shares, which constitutes the primary portion of scalethe Merger consideration, to do so on a tax-free basis for federal income tax purposes.

The Emclaire board of directors also considered the potential risks associated with the Merger in connection with its deliberation of the proposed transaction, including the challenges of integrating Emclaire’s business, operations and employees with those of Farmers, the need to obtain approval by the shareholders of Emclaire as well as regulatory approvals in order to complete the transaction, and the risks associated with the operations of the combined company including the ability to achieve the anticipated cost savings. Emclaire’s board also considered that the stock portion of the Merger consideration was fixed at 2.15 shares of Farmers common stock and, by its nature, would not be realizable by Monitor on a stand-alone, single-charter basis.

adjust upwards to compensate for declines, or downwards to compensate for increases, in Farmers has identified Monitor Bank’s market as providing significant opportunitiesstock price prior to completion of the Merger. Emclaire’s board of directors also believed the terms and growth prospects that are consistent with its strategic plan, andconditions of the Merger also providesAgreement, including the parties’ respective representations and warranties, the conditions to closing and termination provisions, provided adequate assurances as to Farmers’ obligation and ability to consummate the Merger in a new source of capital, loans and deposits for Farmers. Thistimely manner, without any extraordinary conditions.

The foregoing discussion of the information and factors considered by Monitor’sEmclaire’s board of directors in reaching its conclusion and recommendation includes the factors identified above, but is not intended to be exhaustive, and may not includebut includes all of thematerial factors reviewed, considered and discussed by Monitor’s board of directors.Emclaire’s board. In view of the wide variety of factors considered by the Emclaire board of directors in connection with its evaluation of the Merger and other transactions contemplated by the Merger Agreement, and the complexity of these matters, Monitor’sthe Emclaire board of directors did not findconsider it usefulpractical to, and did not attempt to, quantify, rank or otherwise assign any relative or specific weights to the variousspecific factors that it reviewed, considered and discussed in reaching its determination to approve the

Merger and the other transactions contemplated by the Merger Agreement, and to make its recommendation to Monitor shareholders. Rather, Monitor’sdecision. Emclaire’s board of directors viewed its decisions as being based onevaluated the totalityfactors described above, including asking questions of the information presented to it and all factors it considered, including its discussions with and questioning of members of Monitor’sEmclaire’s management and outsideEmclaire’s legal and financial advisors. In addition,considering the factors described above, individual members of Monitor���sEmclaire’s board of directors may have assignedgiven different weights to different factors.

Certain of Monitor’s directors and executive officers have financial interests in the Merger that are different from, or in addition to, those of Monitor’s shareholders generally. The MonitorEmclaire board of directors was awarerelied on the experience and expertise of its financial advisors for quantitative analysis of the financial terms of the Merger. See “Opinion of Emclaire’s Financial Advisor” below. It should also be noted that this explanation of the reasoning of Emclaire’s board of directors and considered these potential interests, amongall other matters,information presented in evaluatingthis section is forward-looking in nature and, therefore, should be read in light of the Merger and in making its recommendation to Monitor shareholders. For a discussion of these interests, see “Interests of Monitor Directors and Executive Officers infactors discussed under the Merger”section “FORWARD-LOOKING STATEMENTS” beginning on page 42 and “Ownership and Director Status Potentially Creates Conflicts of Interests” on page 42.[●].

Recommendation of the MonitorEmclaire Board of Directors

Monitor’sAfter careful consideration, Emclaire’s board of directors has determined that the Merger Agreement and the transactions contemplated thereby, including without limitation the Merger, are fair to and in the best interests of MonitorEmclaire and MonitorEmclaire’s shareholders. Monitor’sEmclaire’s board of directors unanimously recommends that MonitorEmclaire common shareholders vote “FOR”“FOR” approval and adoption of the Merger Agreement and the Merger.

Opinion of Monitor’sEmclaire’s Financial Advisor

ProBank is actingEmclaire retained Raymond James as financial advisor on October 26, 2021. Pursuant to Monitor in connection withthat engagement, the Merger. ProBank is a registered broker-dealer providing investment banking services with substantial expertise in transactions similar to the Merger. As partEmclaire board of its investment banking activities, ProBank is regularly engaged in the independent valuation of businesses and securities in connection with mergers, acquisitions, underwriting, private placement and valuations for estate, corporate and other purposes.

In November 2016, Monitor engaged ProBank to issue a fairness opinion in connection with the Merger. ProBank is an investment banking and consulting firm specializing in community bank mergers and acquisitions. Monitor selected ProBank based on its experience and expertise in representing community banks in similar transactions.

As part of its engagement, ProBank assesseddirectors requested that Raymond James evaluate the fairness, from a financial point of view, to the holders of the termsEmclaire’s outstanding common stock of the Merger Agreement toconsideration, which consists of (i) $40.00 in cash or (ii) 2.15 shares of Farmers common stock for each share of Emclaire common stock at the shareholders of Monitor. ProBank did not participate in negotiationselection of the financial termsholder, subject to total consideration consisting of the Letter of Intent or Merger Agreement. ProBank participated telephonically70% in Farmers common shares and 30% in cash, to be received by such holders in the March 9, 2017 meeting at which Monitor’s board consideredMerger pursuant to the Merger Agreement. At thatthe March 23, 2022 meeting ProBank presented its financial analysis of the transaction and delivered to theEmclaire board of directors, representatives of Raymond James rendered its oral opinion, which was subsequently confirmed in writing,by delivery of a written opinion to the Emclaire board, dated March 23, 2022, that the termsMerger consideration to be received by the holders of Emclaire common stock in the Merger pursuant to the Merger Agreement, arebased upon and subject to the qualifications, assumptions and other matters considered in connection with the preparation of its opinion as of such date, was fair, to Monitor, and its shareholders,as of such date, from a financial point of view. view, to the holders of Emclaire’s outstanding common stock. For the purposes of its opinion, and with Emclaire’s consent, Raymond James assumed that the Merger consideration had a value of $38.23 per share based on a closing price per share of Farmers common shares of $17.43 as of March 22, 2022. In requesting Raymond James’ advice and opinion, no limitations were imposed by Emclaire upon Raymond James with respect to the investigations made or procedures followed by Raymond James in rendering its opinion.

The full text of ProBank’sthe written opinion of Raymond James is attached asAnnex DB to this proxy statement/prospectus. The description of the opinion set forth belowdocument is qualified in its entiretyincorporated by reference to the opinion.

You should consider the following when reading the description of ProBank’s opinion:

theherein. The opinion letter describesoutlines the procedures followed, assumptions made, matters considered and qualifications and limitations ofon the review undertaken by ProBankRaymond James in rendering its opinion. The summary of the opinion of Raymond James set forth in this document is qualified in its entirety by reference to the full text of such written opinion. Holders of Emclaire common stock are urged to read this opinion in its entirety. Raymond James’ opinion speaks only as of the date of such opinion. Raymond James’ opinion does not reflect any developments that may occur or may have occurred after the date of its opinion and prior to the completion of the transaction.

Raymond James provided its opinion for the information of the Emclaire board of directors (solely in its capacity as such) in connection with, and for purposes of, its consideration of the Merger, and its opinion only addresses whether the Merger consideration to be received by the holders of Emclaire common stock pursuant to the Merger Agreement was fair, from a financial point of view, to such holders as of the date of such opinion. The opinion of Raymond James does not address any other term or aspect of the Merger Agreement or the transactions contemplated thereby. The Raymond James opinion does not constitute a recommendation to the Emclaire board of directors or to any holder of Emclaire common stock as to how the Emclaire board of directors, such shareholder or any other person should vote or otherwise act with respect to the Merger or any other matter. Raymond James does not express any opinion as to the likely trading range of Farmers common shares following the Merger, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Farmers at that time. Raymond James’ opinion was approved by Raymond James’ fairness opinion committee.

In connection with its review of the proposed Merger and the preparation of its opinion, Raymond James, among other things:

reviewed the financial terms and conditions as stated in the draft of the Merger Agreement dated March 21, 2022, as provided to Raymond James by Emclaire;

reviewed certain information related to the historical condition and prospects of Emclaire, asmade available to Raymond James by or on behalf of Emclaire, including, but not limited to, financial projections prepared by the management of Emclaire for the periods ending December 31, 2022 through 2026, as approved for Raymond James’ use by Emclaire, which we refer to in this section as the “Projections”;

reviewed Emclaire’s audited financial statements for years ended December 31, 2021, December 31, 2020 and December 31, 2019;

reviewed Emclaire’s unaudited financial statements for the quarterly periods ended September 30, 2021, June 30, 2021 and March 31, 2021 and Emclaire’s unaudited balance sheet as of February 28, 2022, and statement of income for the two months then ended;

reviewed Emclaire’s recent public filings and certain other publicly available information regarding Emclaire;

reviewed the financial and operating performance of Emclaire and those of other selected public companies that Raymond James deemed to be relevant;

considered the publicly available financial terms of certain transactions that Raymond James deemed to be relevant;

reviewed the current and historical market prices of the common stock of Emclaire and the current and historical market prices of the publicly traded securities of certain other companies that Raymond James deemed to be relevant;

conducted such other financial studies, analyses and inquiries and considered such other information and factors as Raymond James deemed appropriate for purposes of the opinion;

received a certificate addressed to Raymond James from a member of senior management of Emclaire regarding, among other things, the accuracy of the information, data and other materials (financial or otherwise) provided to, or discussed with, Raymond James by or on behalf of Emclaire; and

discussed with members of the senior management of Emclaire certain information relating to the aforementioned and any other matters that Raymond James deemed relevant to its inquiry including, but not limited to, the past and current business operations of Emclaire and the financial condition and future prospects and operations of Emclaire.

With Emclaire’s consent, Raymond James assumed and relied upon the accuracy and completeness of all information, whether publicly available, supplied by or on behalf ofEmclaire, or otherwise reviewed by or discussed with Raymond James, and Raymond James has undertaken no duty or responsibility to, nor did Raymond James, independently verify any of such information. Furthermore, Raymond James has undertaken no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities to which Emclaire or Farmers is a party or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which Emclaire or Farmers is a party or may be subject. With Emclaire’s consent, the opinion makes no assumption concerning, and therefore does not consider, the potential effects of any such litigation, claims or investigations or possible assertions. Raymond James has not made or obtained an independent appraisal of the assets or liabilities (contingent or otherwise) of Emclaire. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with Raymond James, Raymond James, with Emclaire’s consent, assumed that the Projections and such other information and data have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of Emclaire, and Raymond James relied upon Emclaire to advise Raymond James promptly if any information previously provided became inaccurate or was required to be updated during the period of its review. Raymond James expressed no opinion with respect to the Projections or the assumptions on which they were based. Raymond James assumed that the final form of the Merger Agreement was substantially similar to the draft reviewed by Raymond James, and that the Merger will be consummated in accordance with the terms of the Merger Agreement without waiver or amendment of any conditions thereto. Furthermore, Raymond James assumed, in all respects material to Raymond James’ analysis, that the representations and warranties of each party contained in the Merger Agreement are true and correct as of the date of the Merger Agreement and the closing of the Merger, and that each such party will perform all of the covenants and agreements required to be performed by it under the Merger Agreement without being waived. Raymond James has relied upon and assumed, without independent verification, that (i) the Merger will be consummated in a manner that complies in all respects with all applicable federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and

approvals necessary for the consummation of the Merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the Merger or Emclaire that would be material to Raymond James’ analyses or its opinion.

Raymond James’ opinion is based upon market, economic, financial and other circumstances and conditions existing and disclosed to Raymond James as of March 22, 2022, and any material change in such circumstances and conditions would require a reevaluation of the opinion, which Raymond James is under no obligation to undertake. Raymond James has relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Emclaire since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Raymond James that would be material to Raymond James’ analyses or its opinion, and should be readthat there is no information or any facts that would make any of the information reviewed by Raymond James incomplete or misleading in its entirety;

any material respect.

There is significant uncertainty as to the potential direct and indirect business, financial, legal, economic and social implications and consequences of the spread of the coronavirus and associated illnesses and the actions and measures that countries, governments, regulatory agencies, central banks, international financing and funding organizations, stock markets, businesses and individuals have taken and may take to address the spread of the coronavirus and associated illnesses including, without limitation, those actions and measures pertaining to fiscal or monetary policies, legal and regulatory matters and the credit, financial and stock markets (collectively, the “Pandemic Effects”). Raymond James expresses no opinion or view as to the potential impact of the Pandemic Effects on Raymond James’ analysis, the opinion, the Merger, Farmers, Emclaire or the value of the Merger consideration after March 22, 2022. Also, the credit, financial and stock markets have been experiencing unusual volatility due in part to the military conflict between Russia and Ukraine and Raymond James expresses no opinion or view as to any potential effects of such volatility on the Merger, Emclaire or Farmers. Raymond James’ opinion does not purport to address potential developments in any such credit, financial and stock markets on the value of the Merger consideration after March 22, 2022.

ProBank

Raymond James expressed no opinion as to the price at which Monitor’sunderlying business decision to effect the Merger, the structure or Farmers’ common stock would actually be trading at any given time;

ProBank’s opinion does not address the relative meritstax consequences of the Merger, andor the other business strategies consideredavailability or advisability of any alternatives to the Merger. Raymond James provided financial advice to Emclaire with respect to the Merger. Raymond James did not, however, recommend any specific amount of consideration or that any specific consideration constituted the only appropriate consideration for the Merger. Raymond James did not express any opinion as to the likely trading range of Farmers common shares following the Merger or the prices at which Farmers’ common shares may be sold at any time, which may vary depending on numerous factors that generally impact the price of securities or on the financial condition of Farmers at that time. The Raymond James opinion is limited to the fairness, from a financial point of view, of the Merger consideration to be received by Monitor’s board, nor does it address Monitor’s board decision to proceed with the Merger; and

ProBank’s opinion was based on market, economic and other relevant considerations as they existed and could be evaluatedholders of Emclaire common stock (other than excluded shares) as of the date of the opinion. Events occurring after the date of ProBank’s

Raymond James expressed no opinion including, but not limited to, changes affecting the securities markets or material changes in the results of operations or in the financial condition of either Farmers or Monitor, could materially affect the assumptions used by ProBank in preparing its opinion.

The preparation of a fairness opinion involves various determinations as to the most appropriate methods of financial analysis and the application of those methods to the particular circumstances. It is, therefore, not readily susceptible to partial analysis or summary description. In performing its analyses, ProBank made numerous assumptions with respect to industry performance,any other reasons, legal, business, and economic conditions, and other matters, many of which are beyondor otherwise, that may have supported the control of Monitor and Farmers and may not be realized. Any estimates contained in ProBank’s analyses are not necessarily predictive of future results or values, which may be significantly more or less favorable than such estimates. Estimates of valuesdecision of the companies do not purportEmclaire board of directors to approve or consummate the Merger. Furthermore, no opinion, counsel or interpretation was intended by Raymond James on matters that require legal, accounting or tax advice. Raymond James assumed that such opinions, counsel or interpretations have been or will be appraisals or necessarily reflectobtained from the prices at whichappropriate professional sources. Furthermore, Raymond James relied, with the companies or their securities may actually be sold. Unless specifically noted, noneconsent of the analyses performed by ProBank was assigned a greater significance than any other. The relative importance or weight given to these analyses is not reflected inEmclaire board of directors, on the order of either the analyses or their corresponding results in this proxy statement/prospectus.

Management of Monitor and Farmers, respectively, representedfact that thereEmclaire had been no material adverse change in their respective company’s assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to ProBank. ProBank assumed in all respects material to its analysis that Monitor and Farmers would remain as going concerns for all periods relevant to ProBank’s analyses, that all of the representatives and warranties contained in the Merger Agreement were true and correct, that each party to the Agreement would perform all of the covenants required to be performedassisted by such party under the Merger Agreement, and that the conditions precedent in the Merger Agreement would not be waived. Finally, ProBank relied upon the advice Monitor received from its legal, accounting and tax advisors as to all legal, accounting, and tax matters relating toRaymond James, with the Merger andconsent of the other transactions contemplated by the Merger Agreement.

In its review, ProBankEmclaire board, relied upon and assumed the accuracy and completeness of the information providedassessments by Emclaire and its advisors as to itall legal, accounting and tax matters with respect to Emclaire and the Merger, including, without limitation, that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

In formulating its opinion, Raymond James considered only what Raymond James understood to be the Merger consideration to be received by the holders of the Emclaire common stock and Raymond James did not

consider nor express an opinion on the fairness of the amount or publicly available,nature of any compensation to be paid or payable to any person or entity (including any of Emclaire’s officers, directors or employees), or class of such persons and/or entities, whether relative to the Merger consideration to be received by the holders of the Emclaire common stock or otherwise. Raymond James was not requested to opine as to, and its opinion did not attemptexpress an opinion as to verify such information. As partor otherwise address, among other things: (1) the fairness of the due diligence process, ProBank madeMerger to the holders of any class of securities, creditors or other constituencies of Emclaire, or to any other party, except and only to the extent expressly set forth in the last sentence of its opinion or (2) the fairness of the Merger to any one class or group of Emclaire’s or any other party’s security holders or other constituents vis-à-vis any other class or group of Emclaire’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the Merger amongst or within such classes or groups of security holders or other constituents). Raymond James expressed no independent verificationopinion as to the status and value of Monitor’s or Farmers’ assets, including the valueimpact of the loan portfolio and allowance for loan and lease losses, and instead relied upon representations and information concerning the value of assets and the adequacy of reserves of both companies in the aggregate. In addition, ProBank assumed that, in the course of obtaining the necessary approvals for the transaction, no condition would be imposed that would have a material adverse effectMerger on the contemplated benefitssolvency or viability of Emclaire or Farmers, or the transactionability of Emclaire or Farmers to Monitor and its shareholders.

In connection with its opinion, ProBank reviewed and/or considered:

(i)the Merger Agreement dated as of March 13, 2017;

(ii)certain publicly available financial statements and other historical financial information of Monitor and Farmers that we deemed relevant;

(iii)certain non-public internal financial and operating data of Monitor and Farmers that were prepared and provided to us by the respective management of Monitor and Farmers;

(iv)internal financial projections for Farmers for the year ending December 31, 2017 prepared by management of Farmers;

(v)the pro forma financial impact of the Merger on Farmers, based on assumptions relating to transaction expenses, preliminary acquisition accounting adjustments, and cost savings as discussed with representatives of Farmers;

(vi)publicly reported historical price and trading activity for Farmers common shares, including an analysis of certain financial and stock market information of Farmers compared to certain other publicly traded companies;

(vii)the financial terms of certain recent business combinations in the commercial banking industry, to the extent publicly available;

(viii)the current market environment generally and the banking environment in particular; and,

(ix)such other information, financial studies, analyses and investigations and financial, economic and market criteria as we considered relevant.

ProBank also discussed with senior management of Monitor the business, financial condition, results of operations and prospects of Monitor, including certain operating, regulatory, and other financial matters.pay their respective obligations when they come due.

The following is a summary of the material factors considered andfinancial analyses performed by ProBanksummarized below include information presented in connection with its opinion dated March 13, 2017.tabular format. The summary doestables alone do not purport to beconstitute a complete description of the financial analyses. Accordingly, Raymond James believes that its analyses performed by ProBank.

Summaryand the summary of Financial Termsits analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on theAgreement.ProBank reviewed information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial termsanalyses, including the methodologies and assumptions underlying the analyses, could create an incomplete or potentially misleading view of the Merger Agreement, includingprocess underlying its analyses and opinion. Except as otherwise noted, the formfollowing quantitative information, to the extent that it is based on market data, is based on market data that existed on or before March 22, 2022 and is not necessarily indicative of consideration,current market conditions.

Material Financial Analyses

The following summarizes the material financial analyses reviewed by Raymond James with the Emclaire board of directors at its meeting on March 23, 2022, which material was considered by Raymond James in rendering its opinion. No company or transaction used in the analyses described below is identical or directly comparable to Emclaire, Farmers or the contemplated Merger.

Selected Companies Analysis. Raymond James analyzed the relative valuation multiples of ten (10) exchange ratiotraded banks and thrifts headquartered in Pennsylvania, New York, Ohio and West Virginia with total assets between $700 million and $1.5 billion and a last-twelve-months (“LTM”) return on average assets of greater than 0.50%, excluding companies that were merger targets and mutual holding companies. Information for the stock portion of the consideration, and the resulting implied value per share to be received by Monitor common shareholders pursuant to the Merger.

The financial terms of the Merger Agreement provide for the Merger Consideration to be determined as follows:

(1)The Maximum Value of the Merger Consideration shall be determined by multiplying Monitor’s Adjusted Shareholders’ Equity by 1.25. The Adjusted Shareholders’ Equity equals Monitor’s Shareholders Equity as of March 31, 2017, plus the after-tax gain on the sale of Lifetime Financial Advisors LLC (d.b.a. Monitor Wealth Group “MWG”).

(2)The Minimum Value of the Merger Consideration shall be determined by multiplying Monitor’s Adjusted Shareholders’ Equity by 1.15.

The Merger Agreement provides for each share of Monitor common stock to receive, at the election of the holder, either: (i) cash in an amount equal to the Maximum Value divided by 10,000 (“Cash Value per Monitor Share”), which is presently estimated at $779.0228 per share (rounded to four decimal places); or (ii) stockcomparable institutions was based on the conversion ofmost recently available balance sheet data and presented on a consolidated basis where available, otherwise on bank-level data. The selected companies that Raymond James deemed relevant included the following:

CF Bankshares Inc.

CB Financial Services, Inc.

Middlefield Banc Corp.

SB Financial Group, Inc.

Pathfinder Bancorp, Inc.

Ohio Valley Banc Corp.

Northeast Community Bancorp, Inc.

Esquire Financial Holdings, Inc.

United Bancshares, Inc.

United Bancorp, Inc.

Raymond James calculated various financial multiples for each Monitor Common Share into Farmers Common Shares basedselected exchange and over-the-counter traded company, including: closing price per share on the Final Exchange RatioMarch 22, 2022 compared to (i) tangible book value (“Stock Consideration”TBV”). The shareholder election process is subject to proration such that 85 percent of Monitor Common Shares shall be paid the Stock Consideration and all other Monitor Common Shares shall be paid the Cash Consideration.

The Initial Exchange Ratio per share at December 31, 2021, (ii) LTM earnings per share (“EPS”) for the Stock Consideration is estimated at 58.5489,most recent LTM financial period reported and was determined by dividing the estimated Cash Value per Share of $779.0228 by $13.3055, which is the twenty (20) trading day volume weighted average closing price (“Initial VWAP”) of Farmers ending February 10, 2017.

Article 1.4(d) of the Merger Agreement describes a process that could result in an adjustment to the Initial Exchange Ratio(iii) EPS for the Stock Consideration. Based on the Final VWAP of Farmers, if the aggregate Merger Consideration is between the Minimum Value and the Maximum Value, there will be no adjustment to the Initial Exchange Ratio and the Initial Exchange Ratio will be the Final Exchange Ratio. If the aggregate Merger Consideration is less than the Minimum Value, the Initial Exchange Ratio will be adjusted upward so that the aggregate Merger Consideration equals the Minimum Value. If the aggregate Merger Consideration is greater than the Maximum Value, the Initial Exchange Ratio will be adjusted downward so the aggregate Merger Consideration equals the Maximum Value.

ProBank calculated the implied value of the Merger Consideration to equal approximately $7.79 million as of March 13, 2017. This amount represents:

125 percent of Monitor’s estimated common book value as of March 31, 2017;

126 percent of Monitor’s estimated tangible common book value as of March 31, 2017; and

24.5 times core net income of Monitor for the twelve-month period ending December 31, 2016.

Monitor’s common equity as of March 31, 2017 is estimated at $6.2 million. Core net income for the twelve-month period ending December 31, 201 equaled $318,000.

Monitor Bank’sFinancial Performance and Peer Analysis.ProBank compared selected results of Monitor Bank’s operating performance to 23 selected Ohio banks with total assets less than $75 million. ProBank considered this group of financial institutions comparable to Monitor Bank on the basis of asset size and geographic location.

This peer group consisted of the following Ohio banks:

Bank Name

City

Bank Name

City

Metamora State Bank

MetamoraFNB of GermantownGermantown

Spring Valley Bank

WyomingFirst City BankColumbus

Corn City State Bank

DeshlerCommunity First Bank, NAForest

Edon State Bank Co.

EdonFNB of Powhatan PointPowhatan Point

Sherwood State Bank

SherwoodBaltic State BankBaltic

Peoples Savings Bank

New MatamorasMarblehead BankMarblehead

Home National Bank

RacineRepublic Banking CompanyRepublic

Peoples NB of Mt Pleasant

Mount PleasantWaterford Cmcl & Svgs BankWaterford

Twin Valley Bank

West AlexandriaRockhold, Brown & Co. BankBainbridge

FNB of Blanchester

BlanchesterPataskala Banking CompanyPataskala

Union Banking Company

West MansfieldMt. Victory State BankMount Victory

Peoples Bank

Gambier

ProBank noted the following selected financial measures for the peer group as compared to Monitor Bank:

     Peer Financial Performance (1)       
     25th Pct      Median      75th Pct      Monitor Bank (1) 
    

 

 

     

 

 

     

 

 

     

 

 

 

Total Assets ($mils)

     $48.1      $55.6      $60.8        $43.2 

Loan / Asset Ratio

     44.3%      64.7%      69.6%        52.1% 

PTPP / Average Assets

     0.49%      0.95%      1.15%        1.07% 

Return on Average Assets (ROAA)

     0.39%      0.67%      0.86%        0.67% 

Return on Average Equity (ROAE)

     3.33%      5.54%      6.86%        4.96% 

NPLs / Total Loans

     1.89%      0.43%      0.02%        1.23% 

NPAs / Total Assets

     1.25%      0.35%      0.04%        0.64% 

Tier 1 Leverage Ratio

     10.07%      11.46%      13.06%      13.48% 

Total Risk-Based Capital Ratio

     17.87%      20.99%      29.75%      22.95% 

PTPP = Pre-Tax Pre-Provision income = Net Interest Income + Noninterest Income - Noninterest Expense

NPLs = Loans 90+ days past due and nonaccrual loans. Restructured loans are not included in NPLs.

NPAs = Loans 90+ days past due, nonaccrual loans, OREO, nonperforming debt securities & other assets. Restructured loans are not included.

(1)Peer and Monitor Bank financial performance for the year ending December 31, 2016.

Based on this peer analysis, ProBank observed that Monitor Bank’s core profitability, as measured by pre-tax pre-provision earningsmost recent quarter (“PTPP”MRQ”), was between the median and 75th percentile of the peer. Monitor Bank’s

ratio of PTPP earnings to average assets of 1.07 percent compares to the peer median of 0.95 percent and reported. Raymond James reviewed the 75th percentile, of 1.15 percent. Monitor Bank’s ROAA equaled the peermean, median while its ROAE was between the 25thand 25th percentile and the medianrelative valuation multiples of the peer. Asset quality measures were betweenselected exchange and over-the-counter traded companies and compared them to corresponding valuation multiples for Emclaire implied by the 25th percentile and median peer results. In addition, ProBank noted that Monitor Bank’s Tier 1 leverage ratio was greater than the 75th percentileMerger consideration. EPS are based on diluted shares outstanding. The results of the peer group, while the Bank’s total risk-based ratio was between the median and 75th percentileanalyses of the peer group.

Comparable Transaction Analysis.ProBank compared the financial performance of certain selling institutionsselected exchange and the prices paid in selected transactions to Monitor’s financial performance and the implied transaction multiples being paid by Farmers for Monitor. Specifically, ProBank reviewed certain information relating to selected Ohio bank and thrift transactions from January 1, 2015 to March 7, 2017 involving sellers with total assets less than $200 million for which transaction pricing information was available. Six transactions met the selected criterion, as listed below:

Buyer Name

State

Seller Name

City

Announcement

Date

First State Bancorp Inc.

OHFirst Safety BankSt Bernard03/24/16

Ohio Valley Banc Corp.

OHMilton BancorpWellston01/07/16

CNB Financial Corp.

PALake National BkMentor12/30/15

Farmers Ntnl Banc Corp.

OHTri-State 1st BncE. Liverpool06/24/15

First Commonwealth Fncl

PAFirst Cmnty BankColumbus05/11/15

First Merchants Corp.

INC Financial Corp.Dublin01/06/15

ProBank also reviewed certain information relating to selected Midwest bank and thrift transactions from January 1, 2015 to March 7, 2017 involving sellers with total assets less than $100 million and last twelve months (“LTM”) ROAA ratios greater than zero. Twenty-five transactions met the selected criterion, as listedover-the-counter traded companies are summarized below:

 

Buyer Name

  

State

SUMMARY PRICING MULTIPLES
  

Seller Name

Price /
  

City

TBV per Share		 

State

LTM EPS Announcement
Date		MRQ EPS 

Investor group75th Percentile

NEWoodstock Ld & CattleFullertonNE   01/06/17125% 12.2x11.0x 

First Belleville Bcshs Inc.Median

KSPalco Bankshares Inc.PlainvilleKS   12/14/16116% 10.3x10.2x 

Merchants BancorpMean

INBluestem Dvlp Corp.JoyIL   11/15/16122% 10.8x9.8x 

Central Kansas Bancshares25th Percentile

KSRoxbury BankRoxburyKS   10/28/16110% 8.5x8.0x 

Central Bancompany Inc.Implied Transaction Metric

MOBank Star OneFultonMO   08/19/16144

Horizon Bancorp

INCNB BancorpAtticaIN%   07/12/16

Mackinac Financial Corp

MINiagara Bancorp. Inc.NiagaraWI10.5x   05/24/16

Lizton Financial Corp.

INIndiana Business BncpIndianapolisIN04/26/16

Bellwood Cmnty Hldg Co.

NEHassenstab Mgmt Co.HumphreyNE03/25/16

First State Bancorp Inc.

OHFirst Safety BankSaint BernardOH03/24/16

Columbia Bancshares Inc.

MOClarence State BankClarenceMO03/16/16

First Cmnty Finl Partners

ILMazon State BankMazonIL03/14/16

Sandhills Financial Svcs

NEKeystone InvestmentKeystoneNE02/22/16

Elkcorp Inc.

KSBaileyville BancsharesSenecaKS02/01/16

F & M State Bancshares

KSF M Co.MilliganNE11/16/15

Eastern MI Fncl. Corp

MIRuth Bank Corp.RuthMI11/09/15

First State Assoc. Inc.

IAMiner County BankHowardSD08/05/15

First York Ban Corp.

NEGuide Rock State BankGuide RockNE07/24/15

Private Investors

-Ford County State BankSpearvilleKS06/26/15

Madison County Financial

NEWinside Bancshares Inc.WinsideNE05/13/15

Baylake Corp.

WINew Bancshares Inc.KewauneeWI05/08/15

Wells Bancshares Inc.

MOBedison Bancshares Inc.Platte CityMO04/30/15

Jones National Corp.

NEValparaiso EnterprisesValparaisoNE03/27/15

Southeast Bancshares Inc.

KSFirst NB of HowardHowardKS03/02/15

Docking Bancshares Inc.

KSRelianz Bancshares IncWichitaKS02/24/1510.2x 

The following table highlights the results of the comparable transaction analysis:

Seller’s Financial Performance

  Ohio (6 Transactions)   Midwest (25 Transactions)    
   25th
Pct.		   Median   75th
Pct.		   25th
Pct.		   Median   75th
Pct.		  Monitor
(1)		 

Total Assets ($mils)

   $109.1     $135.7     $138.7     $33.8     $49.0     $67.9    $43.2  

Tangible Equity/Tangible Assets

   8.20%    9.93%    11.85%    10.39%    11.51%    13.85%   13.43% 

LTM Return on Average Assets

   0.56%    0.70%    0.84%    0.46%    0.58%    0.99%   0.67% 

LTM Return on Average Equity

   3.72%    7.23%    8.40%    3.35%    5.06%    7.86%   4.96% 

LTM Efficiency Ratio

   94.0%    78.4%    70.8%    78.4%    73.5%    65.0%   66.9% 

Nonperforming Assets /Assets (2)

   2.74%    1.87%    0.99%    1.40%    0.32%    0.11%   0.63% 
             

Deal Transaction Multiples

             

Price/Tangible Book Value Ratio

   123%    154%    180%    106%    115%    129%   126% 

Price/LTM Earnings

   15.0     17.2     24.9     15.8     22.0     27.8    24.5  

(1)Monitor’s financial performance based on Monitor Bank’s performance for 12-month period ending 12/31/16.
(2)Nonperforming assets include nonaccrual loans and leases, restructured loans and leases, and other real estate owned.

Based on this comparable transaction analysis, ProBank observed that Monitor’s overall profitability was relatively close to the median results of both the Ohio and Midwest transaction groups on an ROAA basis and

was between the 25th percentile and median results of two transaction groups on an ROAE basis, due in part to Monitor’s relatively higher tangible equity to assets ratio. ProBank further noted the implied price to tangible book value transaction multiple being paid for Monitor was between the 25th percentile and median results of the Ohio transaction group and slightly lower thanFurthermore, Raymond James applied the 75th percentile, mean, median, and 25th percentile relative valuation multiples for each of the metrics to Emclaire’s actual financial results to drive an implied Merger consideration. Raymond James then compared those implied values to the Merger consideration of $38.23 per share. The results of this analysis are summarized below:

   IMPLIED COMMON SHARE
TRANSACTION CONSIDERATION		 
   Price / 
   TBV per Share   LTM EPS   MRQ EPS 

75th Percentile

  $33.00   $44.31   $41.37 

Median

  $30.60   $37.35   $38.37 

Mean

  $32.28   $39.31   $36.72 

25th Percentile

  $29.17   $30.70   $30.24 

Selected Transaction Analysis. Raymond James also analyzed publicly available information relating to selected regional transactions announced since January 1, 2019 involving bank and thrift targets headquartered in Pennsylvania, New York, Ohio and West Virginia with total assets between $700 million and $1.5 billion and a LTM return on average assets of greater than 0.50% at the announcement date.Raymond James also analyzed publicly available information relating to selected national transactions announced since January 1, 2021 involving bank and thrift targets headquartered in the United States with total assets between $700 million and $1.5 billion and a LTM return on average assets of greater than 0.50% at the announcement date. In each group, transactions without publicly disclosed pricing, mergers of equals, transactions where the target company was an S-Corporation and transactions involving credit union buyers were excluded. Transaction information was based on financial data available at the time of the announcement of the transaction and presented on a consolidated basis where available, otherwise on bank-level data.

Regional:

Acquisition of Prudential Bancorp, Inc. by Fulton Financial Corporation (3/2/2022)

Acquisition of Riverview Financial Corporation by Mid Penn Bancorp, Inc. (6/30/2021)

Acquisition of Cortland Bancorp by Farmers National Banc Corp. (6/23/2021)

Acquisition of Standard AVB Financial Corp. by Dollar Mutual Bancorp (9/25/2020)

Acquisition of Country Bank Holding Company, Inc. by OceanFirst Financial Corp. (8/9/2019)

Acquisition of DNB Financial Corporation by S&T Bancorp, Inc. (6/5/2019)

National:

Acquisition of Prudential Bancorp, Inc. by Fulton Financial Corporation (3/2/2022)

Acquisition of Guaranty Federal Bancshares, Inc. by QCR Holdings, Inc. (11/9/2021)

Acquisition of Citizens Union Bancorp of Shelbyville, Inc. by German American Bancorp, Inc. (9/20/2021)

Acquisition of Valley Republic Bancorp by TriCo Bancshares (7/27/2021)

Acquisition of Suncrest Bank by CVB Financial Corp. (7/27/2021)

Acquisition of Riverview Financial Corporation by Mid Penn Bancorp, Inc. (6/30/2021)

Acquisition of Cortland Bancorp by Farmers National Banc Corp. (6/23/2021)

Acquisition of Landmark Community Bank by Simmons First National Corporation (6/7/2021)

Acquisition of Triumph Bancshares, Inc. by Simmons First National Corporation (6/7/2021)

Acquisition of Aquesta Financial Holdings, Inc. by United Community Banks, Inc. (5/27/2021)

Acquisition of American State Bancshares, Inc. by Equity Bancshares, Inc. (5/17/2021)

Acquisition of SouthCrest Financial Group, Inc. by Colony Bankcorp, Inc. (4/22/2021)

Acquisition of American River Bankshares by Bank of Marin Bancorp (4/19/2021)

Acquisition of Severn Bancorp, Inc. by Shore Bancshares, Inc. (3/3/2021)

Acquisition of Kentucky Bancshares, Inc. by Stock Yards Bancorp, Inc. (1/27/2021)

Acquisition of FNS Bancshares, Inc. by BancorpSouth Bank (1/13/2021)

Raymond James examined values for the Midwest transaction group. The priceselected transactions compared to income multiplethe target companies’ (i) MRQ TBV at announcement; (ii) LTM Net Income at the time of 24.5 times for Monitor approximatedannouncement; and (iii) core deposits (total deposits less time deposits greater than $100,000 and brokered deposits). Raymond James reviewed the 75th percentile, results for Ohio and was between themean, median and 7525th percentile results forrelative valuation multiples of the Midwest.selected transactions.

Monitor Control-Level Discounted Cash Flow Analysis. ProBank performed an analysis that estimated the control-level discounted cash flow value of Monitor. The projections were based on the following:Regional Transactions:

 

2.0 percent annual asset growth in each year.
   SUMMARY TRANSACTION MULTIPLES 
   Deal Value /
TBV		  Deal Value /
LTM Earnings		   Premium /
Core Deposits		 

75th Percentile

   152%   18.9x    7.3% 

Median

   145%   15.3x    6.8% 

Mean

   147%   16.0x    6.3% 

25th Percentile

   126%   12.5x    3.4% 

Implied Transaction Metric

   147%   10.7x    4.1% 

Monitor’s stand-alone projected annual net income over the next five years increasing from $300,000 for 2018 to $326,000 for 2022.

Credit for potential cost saving synergies equal to 24.5 percent of stand-alone noninterest expense. Pro forma annual after-tax cost savings would approximate $160,000 over the next five years, which approximates 50 percent of the estimated cost savings projected by Farmers. ProBank considered this a reasonable level of cost savings to allocate to Monitor in determining a control-level value.

A discount rate of 12.0 percent.

Excess cash flows are calculated based on the pro forma net income projections summarized above and a minimum required tangible capital ratio of 8.0 percent.

A terminal value calculated using a capitalization rate of 9.0 percent, which is equal to the discount rate of 12.0 percent less a 3.0 percent long-term growth rate.

Based on these assumptions, the aggregate control-level discounted cash flow value of Monitor equaled $7.0 million, or 117 percent of December 31, 2016 tangible equity.

Farmers Financial Performance and Market Trading Data versus Peer.ProBank compared selected results of Farmers’ operating performance to that of 18 selected Ohio and Pennsylvania publicly traded banking companies with assets between $1.2 and $5.0 billion. ProBank considered this group of financial institutions comparable to Farmers based on asset size and geographic location.

This peer group consisted of the following companies:National Transactions:

 

Company Name

Symbol

Company Name

Symbol

Univest Corp. of Pennsylvania

UVSPESSA Bancorp Inc.ESSA

TriState Capital Holdings Inc.

TSCCodorus Valley Bancorp Inc.CVLY

Peoples Bancorp Inc.

PEBOOrrstown Financial ServicesORRF

Bryn Mawr Bank Corp.

BMTCCivista Bancshares Inc.CIVB

CNB Financial Corp.

CCNEPenns Woods Bancorp Inc.PWOD

First Defiance Financial

FDEFLCNB Corp.LCNB

United Community Finl Corp.

UCFCCitizens & Northern Corp.CZNC

Peoples Financial Services

PFISCitizens Financial ServicesCZFS

Republic First Bancorp Inc.

FRBKACNB Corp.ACNB
   SUMMARY TRANSACTION MULTIPLES 
   Deal Value /
TBV		  Deal Value /
LTM Earnings		   Premium /
Core Deposits		 

75th Percentile

   161%   19.0x    8.1% 

Median

   154%   16.3x    6.4% 

Mean

   151%   16.1x    6.2% 

25th Percentile

   141%   12.8x    4.7% 

Implied Transaction Metric

   147%   10.7x    4.1% 

ProBank also compared selected results of Farmers’ operating performance to that of 19 selected Midwest publicly traded banking companies with assets between $1.5 and $4.0 billion with tangible equity to assets less than 11.0 percent, LTM core ROAE greater than 8.0 percent and NPAs less than 1.0 percent of total assets.

This peer group consisted of the following companies:

Company Name

Symbol

Company Name

Symbol

QCR Holdings Inc.

QCRHFirst Defiance FinancialFDEF

Midland States Bancorp Inc.

MSBINicolet Bankshares Inc.NCBS

Horizon Bancorp

HBNCAlerus Financial Corp.ALRS

Mercantile Bank Corp.

MBWMFarmers National Banc Corp.FMNB

MidWestOne Financial Grp

MOFGSTAR Financial Group Inc.SFIGA

Stock Yards Bancorp Inc.

SYBTFirst Internet BancorpINBK

German American Bancorp

GABCWest Bancorp.WTBA

First Mid-Illinois Bancshares

FMBHMacatawa Bank Corp.MCBC

Hills Bancorp.

HBIAMutualFirst Financial Inc.MFSF

Independent Bank Corp.

IBCP

ProBank noted the following selected financial measures for the peer group as compared to Farmers:

   Peer Financial Performance 
   Ohio and Pennsylvania   Midwest Region     
   25th
Pct.		   Median   75th
Pct.		   25th
Pct.		   Median   75th
Pct.		   Farmers (1) 

Total Assets ($billions)

   $1.4    $1.9    $2.5    $1.9    $2.5    $3.1    $2.0 

Tangible Equity/Tangible Assets

   8.18%    8.92%    9.53%    8.20%    8.90%    9.48%    8.75% 

LTM PTPP / Average Assets

   1.34%    1.44%    1.59%    1.42%    1.57%    1.82%    1.80% 

LTM Core ROAA

   0.87%    0.95%    1.06%    0.90%    0.97%    1.21%    1.13% 

LTM Core ROAE

   7.69%    8.27%    10.09%    9.26%    9.80%    10.78%    10.25% 

NPAs / Total Assets

   0.90%    0.59%    0.53%    0.72%    0.46%    0.37%    0.44% 

PTPP = Pre-Tax Pre-Provision income = Net Interest Income + Noninterest Income - Noninterest Expense

NPAs = Loans 90+ days past due, nonaccrual loans and OREO. Restructured loans are not included in NPAs.

(1)Farmers’ financial performance based on 2016 core net income of $21.7 million. Core net income adjusts for gains on securities, amortization expense, and other nonrecurring revenue and expense.

ProBank noted that Farmers was aboveFurthermore, Raymond James applied the 75th percentile, of the OH and PA peer group in profitability (core ROAA and core ROAE) and between themean, median and 75th percentile of the Midwest peer group. In addition, ProBank noted that Farmers ranked between the median and 75th percentile in nonperforming assets for the Midwest peer group and above the 75th percentile for the OH and PA peer. ProBank reviewed the following summary of the market trading data of Farmers compared to the peer group, as of March 7, 2017:

   Peer Market Trading Data as of 03/07/2017     
   Ohio and Pennsylvania   Midwest Region     
   25th
Pct.		   Median   75th
Pct.		   25th
Pct.		   Median   75th
Pct.		   Farmers (1) 

Price / Tangible Book Value

   161%    191%    209%    185%    204%    223%    229% 

Price / LTM Core EPS

   15.7    18.1    21.2    15.3    17.7    19.6    17.7 

Dividend Yield

   1.72%    2.17%    2.89%    1.08%    1.58%    1.82%    1.13% 

Avg. Mntly. Share Volume (000)

   367    486    1,036    383    658    1,086    1,629 

Monthly Volume / Total Shares

   3.7%    4.4%    5.1%    3.3%    4.5%    5.7%    6.0% 

(1)Financial performance is based on 2016 core net income of $21.7 million.

ProBank noted that Farmers traded above the 75th percentile for both peer groups as measured by price to tangible book and at approximately the median for both groups as measured by price to LTM Core EPS. Farmers dividend yield was between the 25th percentile relative valuation multiples to Emclaire’s TBV, LTM Earnings and mediancore deposits. Raymond James then compared those implied values to the Merger consideration of $38.23 per share. The results of the Midwest peer group and below the 25th

selected transactions analysis are summarized below:

percentile of the OH and PA peer group. ProBank also noted that Farmers’ average monthly trading volume to shares outstanding was higher than the 75th percentile of both the OH and PA groups.Regional Transactions:

Pro Forma Merger

   IMPLIED COMMON SHARE TRANSACTION
CONSIDERATION		 
   Deal Value /
TBV		   Deal Value /
LTM Earnings		   Premium /
Core Deposits		 

75th Percentile

  $39.60   $67.77   $47.85 

Median

  $37.78   $54.75   $46.17 

Mean

  $38.17   $57.16   $44.92 

25th Percentile

  $32.75   $44.58   $36.14 

National Transactions:

   IMPLIED COMMON SHARE TRANSACTION
CONSIDERATION		 
   Deal Value /
TBV		   Deal Value /
LTM Earnings		   Premium /
Core Deposits		 

75th Percentile

  $41.75   $67.87   $50.18 

Median

  $39.87   $58.42   $45.18 

Mean

  $39.28   $57.61   $44.38 

25th Percentile

  $36.68   $45.86   $40.17 

Discounted Cash Flow Analysis.ProBankRaymond James analyzed the potential pro forma effectdiscounted present value of Emclaire’s projected free cash flows for the Merger assuming the transaction was completed atyears ending December 31, 2017. Assumptions were made regarding acquisition accounting adjustments, costs2022 through 2026 on a stand-alone basis, as provided by Emclaire’s management. Raymond James used tangible common equity in excess of a target ratio of 8.0% of tangible assets at the end of each projection period for free cash flow. The analysis excluded any fair market value adjustment incurred or cost savings and other adjustmentsprojected to be realized in the Merger.

The discounted cash flow analysis was based on discussionsthe Projections. Consistent with managementthe periods included in the Projections, Raymond James used calendar year 2026 as the final year for the analysis and applied multiples, ranging from 9.0x to 13.0x to calendar year 2026 projected net income in order to derive a range of Monitorterminal values for Emclaire in 2026. The projected free cash flows and Farmers and their representatives. Based on fully phased-in cost savings and management’s earnings estimates, this analysis indicated thatterminal values were discounted to present value using rates ranging from 13.0% to 17.0%.

The resulting range of present equity values was divided by the Merger is expected to be accretive to Farmers’ estimated stand-alone EPS. ProBank calculated that Farmers’ pro forma tangible book valuenumber of average diluted shares outstanding. Raymond James reviewed the range of per share would be accretive by $0.04 at closing.

Pro FormaDividends Per Shareprices derived in the discounted cash flow analysis and compared them to Monitor.Based on the assumed 58.5489 Initial Exchange Ratio and Farmers’ cash dividend of $0.16price per share for 2016, Monitor common stockholders would have received $9.37 in equivalent cash dividendsEmclaire implied by the Merger consideration of $38.23 per share. Monitor’s cash dividend for 2016 equaled $2.00 per share. As a result, Monitor stockholders would have received a 368% increase in cash dividends.

ProBank’s Compensation and Relationships withMonitor andFarmers.Monitor paid ProBank a fixed fee for its services in rendering the fairness opinion. ProBank’s fee was not contingent upon closingThe results of the Merger. Monitor also agreeddiscounted cash flow analysis indicated implied values ranging from $19.98 per share to reimburse ProBank for$31.86 per share.

In connection with its out-of-pocket expenses,analysis, Raymond James considered and discussed with Emclaire’s management how the discounted cash flow analysis would be affected by changes in the underlying assumptions. Raymond James noted that discounted cash flow analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results are not necessarily indicative of actual values or future results.

Additional Considerations. The preparation of a fairness opinion is a complex process and is not susceptible to indemnify ProBank against certain liabilities, including liabilities under securities laws. ProBank doesa partial analysis or summary description. Raymond James believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an incomplete view of the process underlying its opinion. In addition, Raymond James considered the results of all such analyses and did not haveassign relative weights to any prior, existing or pending engagements with Farmers.

Conclusion.Based onof the preceding summary discussionanalyses, but rather made qualitative judgments as to significance and relevance of each analysis and subjectfactor, so the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of Raymond James as to the actual value of Emclaire.

In performing its analyses, Raymond James made numerous assumptions with respect to industry performance, general business, economic and regulatory conditions set forthand other matters, many of which are beyond the control of Emclaire. The analyses performed by Raymond James are not necessarily indicative of actual values, trading values or actual future results that might be achieved, all of which may be significantly more or less favorable than suggested by such analyses.

Such analyses were provided to the Emclaire board of directors (solely in its opinion, ProBank determined the termscapacity as such) and were prepared solely as part of the Agreement are fair,analysis of Raymond James of the fairness, from a financial point of view, to Monitorthe holders of Emclaire common stock of the Merger consideration to be received by such holders pursuant to the Merger Agreement. The analyses do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty. The opinion of Raymond James was one of many factors taken into account by the Emclaire board of directors in making its shareholders.Each shareholderdetermination to approve the Merger. Neither Raymond James’ opinion nor the analyses described above should be viewed as determinative of the Emclaire board’s or Emclaire’s management’s views with respect to Emclaire, Farmers or the Merger.

During the two years preceding the date of its opinion letter, Raymond James has (i) provided investment banking advisory services to Emclaire that were unrelated to the Merger, for which Raymond James received a retainer fee, (ii) engaged in certain fixed income trading activity with Emlenton Bank, which is encourageda subsidiary of Emclaire, for which Raymond James earned income, (iii) provided investment banking advisory services to read ProBank’s fairness opinionFarmers in connection with the acquisition of Cortland Bancorp for which Raymond James received fees, (iv) provided investment banking services to Farmers in connection with a private debt offering for which Raymond James received fees and (v) engaged in certain trading activity with Farmers Bank and Farmers Trust Company, each a subsidiary of Farmers, for which Raymond James earned income.

Emclaire has agreed to pay Raymond James a fee of approximately $1.6 million for advisory services in connection with the Merger, $25,000 of which was paid in connection with its entirety.engagement as Emclaire’s financial advisor and $250,000 of which was paid in connection with the delivery of its opinion. The full textremaining portion of this fairness opinionthe fee is included asAnnex Dcontingent on the closing of the Merger. Emclaire also agreed to this proxy statement/prospectus.reimburse Raymond James for its expenses incurred in connection with its services, including the fees and expenses of its counsel, and will indemnify Raymond James against certain liabilities arising out of its engagement.

Raymond James is actively involved in the investment banking business and regularly undertakes the valuation of investment securities in connection with public offerings, private placements, business combinations and similar transactions. In the ordinary course of business, Raymond James may trade in the securities of Emclaire and Farmers for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. Raymond James may provide investment banking, financial advisory and other financial services to Emclaire and/or Farmers or other participants in the Merger in the future, for which Raymond James may receive compensation.

Farmers’ Reasons for the Merger

The Farmers board of directors has concluded that the Merger is in the best interests of Farmers and its shareholders. In reaching this determination, the Farmers board of directors consulted with management, as well as its financial and legal advisors, and considered a number of factors, including, without limitation, the following:

 

The Merger will facilitateprovide the natural and logical expansion of Farmers’ business within Wayne County and into neighboring Holmes County.

The Merger will help expand a leading Northeastern Ohio community banking franchise with addedopportunity to acquire scale in the western Pennsylvania markets including the Pittsburgh MSA, enhanced profitability and growth potential. Thepotential – the Merger will result in a bank holding company with over $2.0approximately $5.2 billion in assets an important threshold which Farmers believesthat will not only enable more profitable competition in a competitive banking environment, but also improve its visibility withinin the investment community.

 

The resulting institution will have a strong regional presence and brand recognition.

The Merger will help expand Farmers’ wealth management client base.

The Merger parties have highly compatible cultures with similar strategies, customer focus and strong service and community orientation. Monitor’s management philosophies and long-standing reputation of excellent customer service and community involvement are consistent with Farmers’ philosophies focused on superb customer service in the community banking segment with a strong ongoing commitment to each community served.

The Merger has attractive pro forma financial elements relativeincluding accretion to the size of the transaction, as it is immediately accretive to Farmers’ earnings per share and a tangible book value per share and earnings per share.
earn-back.

The Merger eliminates any potential conflict, real or perceived, of having Mr. Smail, as Vice Chairman of Farmers’ board and its largest individual shareholder, also serving as Chairman and majority owner of another bank in a neighboring,non-competitive market.

 

The anticipated continued employmentresulting Merger will offer a strong community bank alternative to these markets.

The Merger partners have similar views on strategic community banking issues and how to deliver banking products and services.

The Merger will allow Farmers to provide its broad and sophisticated product set to these markets and expand Farmers’ wealth management client base.

The addition of certain membersWilliam C. Marsh to Farmers’ executive team and one director from Emclaire’s board of directors, following the effective time of the Monitor management teamMerger, will help with the transitionadd depth of customers, employees and the Monitor community, thereby lessening potential execution risk with respectleadership to the Merger.pro forma company and continuity with Emclaire’s customers and employees.

The Farmers board of directors considered many different factors in its evaluation and did not believe it was practical to, and did not, quantify or otherwise assign relative weights to, the individual factors considered in reaching its determination. In view of all the considerations described above, the Farmers board of directors unanimously concluded that the Merger is fair to and in the best interests of Farmers and its shareholders.

Regulatory Approvals Required

The Merger must receive approval or waivers of application from both the OCC, and the Federal Reserve and the Pennsylvania Department before the Merger may be consummated. Farmers has received[received/applied for] such approval to consummate the Merger from the OCC and the Federal Reserve.Merger.

The approval of any regulatory applications merely implies the satisfaction of regulatory criteria for approval, which does not include review of the adequacy or fairness of the mergerMerger consideration to MonitorEmclaire shareholders. Furthermore, regulatory approvals do not constitute or imply any endorsement or recommendation of the Merger or the terms of the Merger Agreement.

Interests of MonitorEmclaire’s Directors and Executive Officers in the Merger

OfficersIn considering the recommendation of Emclaire’s board of directors to vote “FOR” the proposal to approve the Merger Agreement and “FOR” the Emclaire compensation proposal, Emclaire shareholders should be aware that directors and officers of MonitorEmclaire have employment and other compensation agreements or economic interests that give them interests in the Merger that are somewhat different from, or in addition to, or different from, their interests as Monitor shareholders. These interests and agreements include:

As discussed more fully above, one shareholder (Mr. Smail) serves on the boardsshareholders of directors of Farmers, Farmers Trust and Monitor, and is the largest individual shareholder of Farmers and Monitorpre-Merger;

Payments of retention bonuses to certain executive officers of Monitor;

Continued employment that has been offered by Farmers to Monitor’s President, Mr. Wachtel, and Vice President of Operations, Ms. Shriver; and

Rights of Monitor officers and directors to continued indemnification coverage and continued coverage under directors’ and officers’ liability insurance policies.

Mr. Wachtel and Ms. Shriver were each asked to continue employment with Farmers Bank for a period of six (6) months following the closing of the Merger.

Monitor’sEmclaire. The Emclaire board of directors was aware of these interests and considered them in approving the Merger Agreement and the transactions contemplated by the Merger Agreement, and in deciding to recommend that the Emclaire shareholders vote “FOR” the proposal to approve the Merger Agreement. These interests are described below.

OwnershipEmclaire Restricted Shares

Under the terms of Emclaire’s equity compensation plans, outstanding equity awards held by Emclaire’s employees (including executive officers) and Director Status Potentially Creates Conflictsdirectors generally vest in full upon consummation of Interestsa change in

As

control transaction. The Merger will constitute a change in control for purposes of the dateplans. Upon the completion of this proxy statement/prospectus, other than Mr. James Smail, Farmersthe Merger, each outstanding Emclaire restricted share award will become fully vested and its directors,will be converted into the right to receive the Merger consideration.

The following table sets forth, for each of Emclaire’s executive officers and affiliates beneficially owned no Monitornon-employee directors, the number of all outstanding unvested restricted shares held by each such person as of [●], 2022, and the estimated consideration that each will receive at or after the effective time of the Merger in connection with such awards:

Name

  Number of
Restricted Shares
(#)		   Resulting
Restricted Share
Consideration ($)(1)		 

Executive Officers:

    

William C. Marsh

   14,100   $535,518 

Jennifer A. Poulsen

   3,000    113,940 

Amanda L. Engles

   3,250    123,435 

Robert A. Vernick

   3,000    113,940 

Eric J. Gantz

   2,750    104,445 

Non-Employee Directors:

    

Milissa S. Bauer

   2,100    79,758 

David L. Cox

   2,100    79,758 

James M. Crooks

   2,100    79,758 

Henry H. Deible

   2,100    79,758 

Henry H. Deible II

   2,100    79,758 

Robert W. Freeman

   2,100    79,758 

Mark A. Freemer

   2,100    79,758 

Steven J. Hunter

   750    28,485 

John B. Mason

   2,100    79,758 

Deanna K. McCarrier

   2,100    79,758 

Nicholas D. Varischetti

   2,100    79,758 
    

(1)

In accordance with regulations of the SEC, based on the average per share closing price of the Emclaire common stock for the first five trading days following the first public announcement of the Merger, which average price was $37.98 per share. A holder of restricted shares will be able to elect either the stock Merger consideration or the $40.00 per share cash Merger consideration, subject to the proration and allocation procedures in the Merger Agreement. The value of the stock Merger consideration may be higher or lower than the cash Merger consideration at the time of closing, and the value of the Merger consideration received by the holders of the outstanding restricted stock awards may be higher or lower than the above average price.

For further information regarding the beneficial ownership of Emclaire common shares. Otherstock by the directors and executive officers of Emclaire, see “INFORMATION ABOUT EMCLAIRE – Share Ownership of Certain Emclaire Beneficial Owners and Management” beginning on page [●].

Existing Employment and Change in Control Agreements with Emclaire and Emlenton Bank

Emclaire and Emlenton Bank maintain an employment agreement with William C. Marsh to serve as Chairman, President and Chief Executive Officer. The current term of the agreement expires on December 31, 2024. The agreement provides that if Mr. Marsh is terminated by Emclaire or Emlenton Bank for other than cause, disability, retirement or the executive’s death or the executive terminates employment for good reason (as defined in the agreement) after a change in control of Emclaire or Emlenton Bank, then Mr. Marsh will be

entitled to the payment of a lump sum cash severance amount equal to three times his average annual compensation (as defined in the agreement) during the five calendar years preceding the year of termination, the continuation of his insurance benefits for up to 36 months and a lump sum cash payment equal to the projected cost of providing certain other benefits for 36 months, provided that such payments will be limited if they (alone or together with other payments and benefits) are deemed “parachute payments” under Section 280G of the Internal Revenue Code. The employment agreement imposes non-compete and non-solicitation provisions on Mr. Marsh for a period of 18 months if his employment is terminated prior to a change in control and for a period of 12 months if his employment is terminated concurrently with or following a change in control.

Emclaire and Emlenton Bank maintain change in control agreements with Jennifer A. Poulsen, Amanda L. Engles, Robert A. Vernick and Eric J. Gantz. The change in control agreements currently expire on December 31, 2023. If a change in control occurs during the term of the agreements at a time when there is less than one year remaining in the term, then the remaining term of the agreements will be automatically extended until the one-year anniversary of the completion of the change in control.

The change in control agreements provide that if, within 24 months subsequent to a change in control of Emclaire or Emlenton Bank, the executive is terminated by Emclaire or Emlenton Bank (or any successor) for other than cause, disability, retirement or the executive’s death or the executive terminates employment for good reason (as defined in the agreement), then the executive will be entitled to the payment of a lump sum cash severance amount equal to two times (one times for Mr. Gantz) the executive’s highest annual compensation (as defined in the agreement) during the year of termination (determined on an annual basis) or either of the two preceding calendar years, the continuation of the executive’s insurance benefits for up to 24 months (12 months for Mr. Gantz) and a lump sum cash payment equal to the projected cost of providing certain other benefits for 24 months (12 months for Mr. Gantz), provided that such payments will be limited if they (alone or together with other payments and benefits) are deemed “parachute payments” under Section 280G of the Internal Revenue Code.

The employment and change in control agreements provide that if the executive’s continued participation in any group insurance plan is barred or would trigger the payment of an excise tax under Section 4980D of the Internal Revenue Code, or if any such group insurance plan is discontinued or the benefits thereunder are materially reduced, then Emclaire or Emlenton Bank shall either (1) provide substantially similar benefits under an alternative plan or (2) pay a lump sum cash amount to the executive equal to the projected cost of providing continued coverage to the executive for the periods specified above (36 months for Mr. Marsh, 24 months for Ms. Poulsen, Ms. Engles and Mr. Vernick, and 12 months for Mr. Gantz).

The change in control agreement for Ms. Engles imposes non-compete and non-solicitation provisions on her during her term of employment and for a period of three years if her employment is terminated prior to a change in control and for a period of six months if her employment is terminated concurrently with or following a change in control.

For quantification of the amounts that would be payable to each of Mr. Marsh, Ms. Poulsen and Ms. Engles under their respective employment or change in control agreements, see the section entitled “–Golden Parachute Compensation” below. The severance benefits that would be payable to Messrs. Vernick and Gantz are $455,020, and $166,988, respectively.

Settlement Agreements with Emclaire and Emlenton Bank

In connection with the execution of the Merger Agreement, Emclaire and Emlenton Bank entered into settlement agreements with each of Messrs. Marsh, Vernick and Gantz. The settlement agreements provide that the existing employment or change in control agreements with Messrs. Marsh, Vernick and Gantz will be cancelled effective as of the business day immediately preceding the closing date of the Merger in exchange for a lump sum cash payment, with the cash payments conditioned upon the execution of a general release of claims.

The settlement agreements provide for lump sum cash payments of $1,844,122 for Mr. Marsh, $455,020 for Mr. Vernick and $166,988 for Mr. Gantz. In addition, Mr. Marsh will continue to be subject to the non-competition and non-solicitation provisions in his current employment agreement and Messrs. Vernick and Gantz will continue to be subject to the non-competition and non-solicitation provisions in their supplemental executive retirement plan agreements (as described below). Because each of these three executives are expected to be retained by Farmers following completion of the Merger, the settlement agreements do not include the continuation of insurance benefits or club dues, as these benefits will be provided as applicable in connection with the post-closing employment of these three executives.

Supplemental Retirement Benefits

Emlenton Bank has entered into supplemental executive retirement plan agreements (“SERPs”) with Mr. Marsh, Ms. Poulsen, Ms. Engles, Mr. Vernick and Mr. Gantz, as well as with certain other officers. Each SERP provides for a normal retirement benefit payable monthly for 20 years, an early termination benefit payable monthly for five years if the executive has a separation from service prior to his or her normal retirement age, and a lump sum change in control benefit generally payable on or within 90 days after a change in control, except that the SERP benefits may be delayed in whole or in part to ensure that they are deductible under Section 162(m) of the Internal Revenue Code. Completion of the Merger will constitute a change in control under the SERPs, and the executives will receive the following Monitor directors,lump sum change in control SERP payments if the Merger is completed on or before September 30, 2022: Mr. Smail,Marsh, $988,098; Ms. Poulsen, $431,558; Ms. Engles, $58,404; Mr. MillerVernick, $292,417; and Mr. Sparr, Monitor and its directors, executive officers and affiliates beneficially owned no Farmers common shares.

Thus,Gantz, $8,823. If the Merger is completed on or after October 1, 2022, the lump sum payments will increase to the following amounts: Mr. Smail,Marsh, $1,036,120; Ms. Poulsen, $452,531; Ms. Engles, $76,075; Mr. MillerVernick, $306,613; and Mr. Sparr each potentially have a conflict of interest in approvingGantz, $17,938 (Mr. Gantz’ payment will only increase if the Merger is completed on or after January 1, 2023). The change in control SERP payment to Mr. Marsh is expected to be partially paid in each of 2023 and 2024 so that it is deductible under Section 162(m) of the Internal Revenue Code.

The SERPs impose non-compete and non-solicitation provisions on each executive (other than Mr. Marsh and Ms. Engles, as their restrictive covenants are contained in their employment or change in control agreement) during their respective terms of employment and for a period of three years if the executive’s employment is terminated prior to a change in control and for a period of six months if the executive’s employment is terminated concurrently with or following a change in control.

Post-Closing Employment

In connection with the execution of the Merger Agreement, Farmers entered into a term sheet with Mr. Marsh with respect to his post-closing employment with Farmers. Following completion of the Merger, Mr. Marsh will serve as the Senior Vice President - Pennsylvania Market President of Farmers, with an annual base salary of $275,000. In addition, Mr. Marsh will participate in Farmers’ short-term and long-term incentive plans. The target benefit for Mr. Marsh’s short-term incentive benefit is 25% of base salary, with a maximum benefit of 37.5% of base salary depending upon achievement of performance goals, and his long-term incentive benefit is 20% of base salary, with a one-year cliff vesting schedule. Mr. Marsh will also be entitled to participate in other plans and benefits available to other officers of Farmers.

Messrs. Vernick and Gantz are also expected to be employed by Farmers following completion of the Merger. Farmers Bank has agreed to employ Mr. Vernick as a resultsenior vice president, commercial banking team leader-Pittsburgh, with an annual salary of $182,000 and Mr. Gantz as a vice president, regional credit officer-Pittsburgh, with an annual salary of $145,500. Messrs. Vernick and Gantz will be eligible to participate in Farmers Bank’s annual cash incentive plan with a target payout of 25% of their ownershiprespective base salary, with a potential to be 37.5% of sharestheir base salary, based on actual performance, and they will also be eligible to participate in other plans and benefits offered to all other officers at Farmers Bank.

Retention Bonuses

Emclaire and Emlenton Bank will pay retention bonuses to employees to continue employment through the closing date of stockthe Merger, or through a later date, in both Monitoran aggregate amount of up to $150,000. The recipient and amount of each retention bonus will be determined by the President of Emclaire in consultation with the President of Farmers.

Moreover, Mr. Smail isBoard Seat

Effective immediately following the largest individual shareholdereffective time of the Merger, Farmers will increase by one the number of directors on its board of directors and will appoint one person who serves as a non-employee director of Emclaire immediately prior to the effective time of the Merger, with such person to serve as a director of Farmers for a term expiring at Farmers’ 2024 annual meeting of shareholders.

Advisory Board

Promptly following the effective time of the Merger, Farmers will establish the Farmers-Emlenton Advisory Board and Monitor pre-Merger, and is the Chairman ofoffer membership thereon to all non-employee directors serving on the board of directors of Monitor andEmclaire immediately prior to the Vice Chairmaneffective time of the Merger, other than the director appointed to Farmers’ board of directors of Farmers. As a result, Mr. Smail has been screened from substantially all Merger discussions in his capacity as a director and the Vice Chairmandirectors. Members of the boardFarmers-Emlenton Advisory Board shall serve for an initial term of one year from the completion of the Merger, will meet no less frequently than three times and will be paid compensation of $1,500 for each meeting attended.

Indemnification of Directors and Officers

Farmers has agreed to indemnify the directors, officers and employees of Emclaire and Emlenton Bank after the effective time of the Merger to the fullest extent permitted by applicable laws and under the articles of incorporation or bylaws of Emclaire. Farmers has also agreed to maintain in effect a directors’ and did not participate inofficers’ liability insurance policy for a period of six years after the Farmers’ director approvaleffective time of the Merger with respect to claims arising from facts or events occurring at or before the effective time of the Merger and was excused fromcovering persons who are present or former directors or officers of Emclaire or Emlenton Bank. The insurance policy must contain at least the same coverage and did not participate inamounts, and contain terms and conditions no less advantageous to the votedirectors and officers as currently provided by Emclaire, subject to a cap on the cost of such policy equal to 175% of the Monitor’s director approvallast annual premium paid by Emclaire.

Golden Parachute Compensation

The following table sets forth the information required by Item 402(t) of Regulation S-K promulgated by the SEC regarding certain compensation which Emclaire’s named executive officers may receive that is based on or that otherwise relates to the Merger. The amounts are calculated assuming that the effective date of the Merger and a qualifying termination of employment occurred on [●], 2022, and that all required conditions to the payment of these amounts have been satisfied. None of the named executive officers in orderthe table will receive any tax reimbursements.

Name

  Cash ($)(1)   Equity ($)(2)   Pension/
NQDC ($)(3)		   Perquisites/
benefits ($)(4)		   Total ($)(5) 

William C. Marsh

  $1,844,122   $535,518   $436,130   $—     $2,815,770 

Jennifer A. Poulsen

   537,454    113,940    221,161    5,234    877,789 

Amanda L. Engles

   489,312    123,435    —      3,376    616,123 

(1)

Reflects the lump sum cash severance payable to each of the executives shown in the event the executive’s employment is involuntarily terminated for any reason other than cause, death or disability, or if the

executive terminates his or her employment for good reason (i.e., a “double-trigger” payment). Because Mr. Marsh will receive his lump sum payment upon completion of the Merger even though he will be retained by Farmers following the Merger, his payment may be deemed to be a “single-trigger” payment (i.e., a payment made in connection with the Merger that is not conditioned upon a termination of employment).
(2)

Reflects the value of single-trigger accelerated vesting of restricted stock awards that will become fully vested on the closing date of the Merger, assuming the value at the time of closing is equal to the $37.98 average per share closing price of the Emclaire common stock for the first five trading days following the first public announcement of the Merger. A holder of restricted shares will be able to elect either the stock Merger consideration or the $40.00 per share cash Merger consideration, subject to the proration and allocation procedures in the Merger Agreement. The value of the stock Merger consideration may be higher or lower than the cash Merger consideration at the time of closing, and the value of the Merger consideration received by the holders of the outstanding restricted stock awards may be higher or lower than the above average price.

(3)

Reflects the amount by which the present value of the executive’s lump sum change in control SERP benefit exceeds the present value of the executive’s vested early termination benefit. The lump sum change in control SERP benefit for Ms. Engles does not exceed her vested early termination benefit. The SERP benefits were discounted to present value using 120% of the most recent applicable federal rates published by the Internal Revenue Service, which rates change monthly. For the amount of the lump sum change in control SERP benefits to be paid, see “ — Interests of Emclaire’s Directors and Executive Officers in the Merger” – Supplemental Retirement Benefits.”

(4)

Represents the estimated value of the continued coverage for life and disability insurance premiums for two years for each of Ms. Poulsen ($1,404) and Ms. Engles (also includes dental and vision premiums for Ms. Engles) under their respective change in control agreements. In addition, Ms. Poulsen will receive a lump sum cash payment of $3,830 for her club dues for two years. These double-trigger (as explained below) insurance benefits will be provided in-kind over the applicable coverage period for the executive, except that a lump sum cash payment will be made if the insurance benefits cannot be provided by Farmers. The estimated costs of the insurance premiums to be provided during the respective coverage periods for each executive have been discounted to present value using 120% of the most recent applicable federal rates published by the Internal Revenue Service, which rates change monthly.

(5)

The following table quantifies, for each named executive officer, the portion of the total estimated amount of golden parachute compensation that is payable in connection with the Merger and not conditioned on a termination of employment, referred to as “single-trigger,” and the portion of the total amount of golden parachute compensation that is payable only after both consummation of the Merger and a termination of employment, referred to as “double-trigger”:

Name

  Single-Trigger ($)   Double-Trigger ($) 

William C. Marsh

  $2,815,770   $—   

Jennifer A. Poulsen

   335,101    542,688 

Amanda L. Engles

   123,435    492,688 

Absence of Appraisal or Dissenters’ Rights

Under Section 1571(b) of the PAETL, the holders of a corporation’s shares of any class do not have the right to reducedissent and obtain payment of the appearancefair value of improprietythe shares if, on the record date fixed to determine the shareholders entitled to notice of and to avoid conflictsvote at the special meeting, the shares are listed on a national securities exchange. Accordingly, because Emclaire is listed on NASDAQ, the holders of interestEmclaire common shares and preferred shares (all of which will be redeemed by Emclaire immediately prior to the effective time of the Merger and no Merger consideration and/or cash in takinglieu of fractional shares will be delivered in exchange for such actionsshares) are not entitled to dissenters’ rights in Mr. Smail’s capacityconnection with the Merger.

If the Merger proposal is approved and the Merger is completed, holders of Emclaire common stock who voted against the approval and adoption of the Merger Agreement will be treated the same as a directorholders who voted for either institution involved in the Merger.Merger proposal and their shares of Emclaire common stock will automatically be converted into the right to receive the merger consideration.

Material U.S. Federal Income Tax Consequences of the Merger

This section describes the material U.S. federal income tax consequences of the Merger to Farmers, Monitor, and U.S. holders of Monitorshares of Emclaire common sharesstock who exchange their shares for Farmers common shares, cash or a combination of Farmers common shares and cash pursuant to the Merger. The Merger willFor purposes of this discussion, the term “U.S. holder” is a beneficial owner of shares of Emclaire common stock who, for U.S. federal income tax purposes, is:

a citizen or individual resident of the United States;

a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state or political subdivision thereof;

a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) such trust has a valid election in effect under applicable Treasury Department regulations to be treated as a reorganization within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code. The closing of the Merger is conditioned upon the receipt by Monitor of an opinion of Critchfield, Critchfield & Johnston, Ltd., tax counsel to Monitor, and the receipt by Farmers of an opinion of Vorys, Sater, Seymour and Pease LLP, tax counsel to Farmers, each dated as of the effective date of the Merger, substantially to the effect that, on the basis of facts, representations and assumptions set forth in that opinion (including factual representations contained in certificates of officers of Farmers and Monitor), the Merger constitutes a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. This section constitutes the tax opinions of Critchfield, Critchfield & Johnston, Ltd. and Vorys, Sater, Seymour and Pease LLP regarding the materialU.S. person for U.S. federal income tax consequences of the Merger,purposes; or

an estate that is subject to the limitations, qualifications and assumptions described herein. These tax opinions were confirmed in the respective tax opinions filed as exhibits to the registration statement of which this proxy statement/prospectus is a part.

Farmers and Monitor have not requested and do not intend to request any ruling from the Internal Revenue Service as to the U.S. federal income tax consequenceson its income regardless of the Merger, and the tax opinions presented in this proxy statement/prospectus and to be delivered in connection with the Merger are not binding on the Internal Revenue Service. Consequently, there is no assurance of the accuracy of the anticipated U.S. federal income tax consequences to Farmers, Monitor and the U.S. holders of Monitor common shares described in this proxy statement/prospectus.its source.

The following discussion is based on the Internal Revenue Code, its legislative history, existing, final, temporary and proposed Treasury Department regulations promulgated thereunder, published Internal Revenue Service rulings, and court decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of this discussion.

For purposes of this discussion, the term “U.S. holder” means:

a citizen or resident of the U.S.;

a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S. or any state or political subdivision thereof;

a trust that (1) is subject to (A) the primary supervision of a court within the U.S. and (B) the authority of one or more U.S. persons to control all substantial decisions of the trust or (2) has a valid election in effect under applicable Treasury Department regulations to be treated as a U.S. person; or

an estate that is subject to U.S. federal income tax on its income regardless of its source.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Monitor common shares, the tax treatment of a partner generally will depend

on the status of the partner and the activities of the partnership. If you are a partnership, or a partner in such partnership, holding Monitor common shares, you should consult your tax advisor.

This discussion is addressed only to those Monitor shareholdersU.S. holders of Emclaire common stock that hold their Monitorshares of Emclaire common sharesstock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code (generally, property held for investment), and does not address all of the U.S. federal income tax consequences that may be relevant to particular Monitor shareholdersholder of Emclaire common stock in light of their individual circumstances or to Monitor shareholdersholders of Emclaire common stock that are subject to special rules, such as:

 

mutual funds, banks, thrifts or other financial institutions;

 

S corporations, partnerships or other pass-through entities and investors in those pass-through entities;

 

retirement plans, pension funds, individual retirement accounts or pension funds;other tax-deferred accounts;

 

insurance companies;

 

tax-exempt organizations;

 

dealers or brokers in securities or foreign currencies;

 

traders in securities that elect to use themark-to-market method of accounting;

 

regulated investment companies;

 

real estate investment trusts;

 

persons that exercise dissenters’ rights;

persons thatwho hold Monitorshares of Emclaire common sharesstock as part of a straddle, hedge, constructive sale, conversion transaction or other risk management transaction;

 

persons who purchase or sell their Monitorshares of Emclaire common sharesstock as part of a wash sale;

 

expatriates or persons that have a functional currency other than the U.S. dollar;

 

persons who are not U.S. holders; and

 

persons thatwho acquired their Monitorshares of Emclaire common sharesstock through the exercise of an employee stock option or otherwise as compensation or through atax-qualified retirement plan.

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Emclaire common stock, the tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. If you are a partnership, or a partner in such partnership, holding shares of Emclaire common stock, you should consult your tax advisor.

In addition, the discussion does not address any alternative minimum tax, net investment income tax, state, local or non-U.S. tax laws or the application of any U.S. federal taxes other than U.S. federal income taxes (such as U.S. federal estate or gift tax or any state, local or foreign tax consequences of the Merger, nor does it address any tax consequences arising under the Medicare contribution tax on net investment income.taxes). All holders of Monitorshares of Emclaire common sharesstock should consult their tax advisors as to the specific tax consequences of the Merger to them. In addition, because a holder of Monitorshares of Emclaire common sharesstock may receive a mix of cash and stock despite having made a cash election or share election, it will not be possible for holders of Monitorshares of Emclaire common sharesstock to determine the specific tax consequences of the Merger to them at the time of making the election.

ALL HOLDERS OF EMCLAIRE COMMON STOCK ARE ENCOURAGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.

Reorganization Treatment

The Merger is intended to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, and Farmers and Emclaire each is intended to be a “party to the reorganization” within the meaning of Section 368(b) of the Internal Revenue Code. The closing of the Merger is conditioned upon the receipt by Emclaire of an opinion of Silver Freedman, tax counsel to Emclaire, and the receipt by Farmers of an opinion of Vorys, tax counsel to Farmers, each dated as of the closing date of the Merger, substantially to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinions (including factual representations contained in certificates of officers of Farmers and Emclaire) which are consistent with the state of facts existing as of the closing date of the Merger, the Merger will be treated for United States federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. This section summarizes the matters addressed in the tax opinions of Silver Freedman and Vorys, filed as exhibits to the registration statement of which this proxy statement/prospectus is a part.

The tax opinions are not binding on the Internal Revenue Service, and neither Farmers nor Emclaire has requested or intends to request a ruling from the Internal Revenue Service with respect to the U.S. federal income tax consequences of the Merger. Consequently, no assurance can be given that the Internal Revenue Service will not assert, or that a court would not sustain, a position contrary to any of those set forth below. In addition, if any of the facts, representations or assumptions upon which such opinions are based are inconsistent with the actual facts, the U.S. federal income tax consequences of the Merger could differ materially from those described below.

The following describes the material U.S. federal income tax consequences of characterizationresulting from the Merger being characterized as a reorganization are described below.reorganization.

U.S. Federal Income Tax Consequences to Farmers and MonitorEmclaire

No Gain or Loss.No gain or loss will be recognized by Farmers or MonitorEmclaire as a result of the Merger.

Tax Basis. The tax basis of the assets of MonitorEmclaire in the hands of Farmers will be the same as the tax basis of such assets in the hands of MonitorEmclaire immediately prior to the Merger.

Holding Period. The holding period of the assets of MonitorEmclaire to be received by Farmers will include the period during which such assets were held by Monitor.Emclaire.

U.S. Federal Income Tax Consequences to U.S. Holders of MonitorShares of Emclaire Common Shares whoStock Who Receive Solely Farmers Common Shares

A U.S. holder of Monitorshares of Emclaire common stock who receives solely Farmers common shares in exchange for all of its shares of Emclaire common stock will recognize no gain or loss with respect to the Farmers common shares such U.S. holder receives pursuant to the Merger (with respect to cash received in lieu of a fractional Farmers common share, see below under “–Cash In Lieu of Fractional Shares”).

U.S. Federal Income Tax Consequences to U.S. Holders of MonitorShares of Emclaire Common Shares whoStock Who Receive Solely Cash

A U.S. holder of Monitorshares of Emclaire common sharesstock who receives solely cash in exchange for all of its Monitorshares of Emclaire common shares, or properly exercises its dissenters’ rights,stock and does not constructively own Farmers common shares after the Merger (see“– Possible Dividend Treatment,”below), will recognize a gain or loss for federal income tax purposes equal to the difference between the cash received and such U.S. holder’s tax basis in Monitor’sthe shares of Emclaire’s common sharesstock surrendered in exchange for the cash. SuchSubject to possible dividend treatment (as discussed below under “– Possible Dividend Treatment”), such gain or loss will be a capital gain or loss, provided that such shares were held as capital assets of the U.S. holder at the effective timedate of the Merger. Such gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period is more than one (1) year.year as of the effective date of the Merger. The Internal Revenue Code contains limitations on the extent to which a taxpayer may deduct capital losses from ordinary income. Long-term capital gain of certain non-corporate holders of shares of Emclaire common stock, including individuals, generally is taxed at preferential rates.

U.S. Federal Income Tax Consequences to U.S. Holders of MonitorShares of Emclaire Common Shares whoStock Who Receive a Combination of Cash and Farmers Common Shares

A U.S. holder of Monitorshares of Emclaire common sharesstock will recognize gain (but not loss) with respect to the Farmers common shares and cash such U.S. holder receives pursuant to the Merger, in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Farmers common shares as of the effective date of the Merger and the amount of cash received by such U.S. holder (other than any cash received in lieu of a fractional Farmers common share), exceeds such U.S. holder’s basis in its Monitorshares of Emclaire common shares,stock, and (ii) the amount of cash received by such U.S. holder (other than any cash received in lieu of a fractional Farmers common share, as discussed below under “– Cash In Lieu of Fractional Shares”). Subject to possible dividend treatment (as discussed below under“– Possible Dividend Treatment”), gain that a U.S. holdersholder of Monitorshares of Emclaire common shares recognizestock recognizes in connection with the Merger generally will constitute capital gain and will constitute long-term capital gain if such U.S. holders haveholder has held their Monitorits shares of Emclaire common sharesstock for more than one (1) year atas of the effective timedate of the Merger. Long-term capital gain of certainnon-corporate holders of Monitorshares of Emclaire common shares,stock, including individuals, generally is generally taxed at preferential rates.

Tax Basis and Holding Period of Farmers Common Shares Received Pursuant to the Merger

The tax basis of the Farmers common shares received by a U.S. holder of Monitorshares of Emclaire common sharesstock in the Merger (including a fractional Farmers common share, if any, deemed issued and redeemed by Farmers) will be the same as the basis of the Monitorshares of Emclaire common sharesstock surrendered in exchange for the Farmers common shares and cash, reduced by the amount of cash received by such U.S. holder in the Merger (other than any cash received in lieu of a fractional Farmers common share), and increased by any gain recognized by such U.S. holder in the Merger (including any portion of the gain that is treated as a dividend (as described below), but excluding any gain or loss resulting from the deemed issuance and redemption of a fractional Farmers common share). The holding period for Farmers common shares received by such U.S. holder will include such U.S. holder’s holding period for Monitorshares of Emclaire common sharesstock surrendered in exchange for the Farmers common shares (including a fractional Farmers common share, if any, deemed to be issued and redeemed by Farmers).

If a U.S. holder of Monitorshares of Emclaire common sharesstock acquired different blocks of MonitorEmclaire common sharesstock at different times or at different prices, any gain or loss will be determined separately with respect to each block of Monitor

Emclaire common shares. In computingstock, and such U.S. holder’s tax basis and holding period in any Farmers common shares received in the amountMerger will be determined with reference to each block of gain recognized, if any,Emclaire common stock. If a U.S. holder receives a combination of MonitorFarmers common shares may not offsetand cash (other than cash received in lieu of a fractional Farmers common share) in exchange for shares of Emclaire common stock in the Merger and determines that it has a loss realized on onewith respect to any block of shares againstof Emclaire common stock, such loss cannot be recognized as part of the Merger and cannot be used to offset any gain realized on another block of shares.shares of Emclaire common stock. U.S. holders of Monitorshares of Emclaire common sharesstock should consult their tax advisors regarding the manner in which Farmers common shares and cash received in the Merger should be allocated among different blocks of MonitorEmclaire common sharesstock and regarding their bases and holding periods in the particular shares of Farmers common sharesstock received in the Merger.

Cash in Lieu of Fractional Shares

A U.S. holder of Monitorshares of Emclaire common sharesstock that receives cash in lieu of a fractional Farmers common share generally will be treated as having received such fractional share and then having received such cash in redemption of such fractional share. Gain or loss generally will be recognized based on the difference between the amount of cash received in lieu of the fractional share and the portion of the U.S. holder’s aggregate adjusted basis in the Monitorshares of Emclaire common sharesstock surrendered which is allocable to the fractional share. Subject to possible dividend treatment (as discussed below under“– Possible Dividend Treatment”), such gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for its Monitor sharesEmclaire common stock exceeds one (1) year atas of the effective timedate of the Merger. The Internal Revenue Code contains limitations on the extent to which a taxpayer may deduct capital losses from ordinary income. Long-term capital gain of certain non-corporate holders of shares of Emclaire common stock, including individuals, generally is taxed at preferential rates.

Possible Dividend Treatment

In some cases described above, the gain recognized by a U.S. holder could be treated as having the effect of the distribution of a dividend under the tests set forth in Section 302 of the Internal Revenue Code, in which case such gain would be treated as dividend income.income to the extent of such U.S. holder’s ratable share of Emclaire’s accumulated earnings and profits, as calculated for U.S. federal income tax purposes. Because the possibility of dividend treatment depends primarily upon each holder’s particular circumstances, including the application of certain constructive ownership rules, U.S. holders of Monitorshares of Emclaire common sharesstock should consult with their tax advisors regarding the application of the foregoing rules to their particular circumstances.

Backup Withholding and Reporting Requirements

Under certain circumstances, cash payments made to a U.S. holder of Monitorshares of Emclaire common sharesstock pursuant to the Merger may be subject to backup withholding at a rate of 28%24% of the cash payable to the U.S. holder (including any cash received in lieu of a fractional Farmers common share), unless the U.S. holder furnishes its taxpayer identification number in the manner prescribed in applicable Treasury Department regulations, and such U.S. holder otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a U.S. holder under the backup withholding rules are not an additional tax and will be allowed as a refund or credit against the U.S. holder’s U.S. federal income tax liability.

A U.S. holder of MonitorEmclaire common stock who receives Farmers common shares owning at least 1% (by vote or value)as a result of the outstandingMerger will be required to retain records pertaining to the Merger, including records relating to the number of shares and the tax basis of such U.S. holder’s Emclaire common stock under Treasury Department regulations Section 1.368-3. A U.S. holder of shares of MonitorEmclaire common stock who is required to file a U.S. federal income tax return and who is a “significant holder” that receives Farmers common shares or having a basis of $1,000,000 or more in its Monitor common shares immediately before the Merger iswill be required to file a statement with such U.S. holder’s U.S. federal income tax return in accordance with Treasury Department regulations Section 1.368-3 setting forth such U.S. holder’s tax basis in, and the fair market value of,

the Monitorshares of Emclaire common sharesstock exchanged by such U.S. holder pursuant to the Merger. In addition, allMerger and certain other information. A U.S. holdersholder of MonitorEmclaire common stock who receives Farmers common shares will be required to retain records pertainingas a result of the Merger should consult with such holder’s tax advisor if, immediately before the Merger, such holder owned (i) at least 5% (by vote or value) of the outstanding stock of Emclaire (either including or excluding any shares of preferred stock owned by such holder that were redeemed before the Merger pursuant to the Merger.Merger Agreement) or (ii) securities of Emclaire with a basis for federal income tax purposes of at least $1.0 million.

The preceding opinions regarding the material U.S. federal income tax consequences of the Merger are not a complete analysis or discussion of all potential tax effects that may be important to you.

Each Monitor shareholderholder of Emclaire common stock should consult with his, her or itssuch holder’s own tax advisor regarding the specific tax consequences to the shareholder of the Merger, including the application and effect of federal, state, local and foreignnon-U.S. income and other tax laws.

Accounting Treatment

The Merger will be accounted for under the acquisition method of accounting in accordance with generally accepted accounting principles in the United States. Under the acquisition method of accounting, the assets and liabilities of MonitorEmclaire will be recorded at estimated fair values at the time the Merger is consummated. The excess of the estimated fair value of Farmers common shares issued and the cash proceeds paid over the net fair values of the assets acquired, including identifiable intangible assets, and liabilities assumed will be recorded as goodwill and will not be deductible for income tax purposes. Goodwill will be subject to an annual test for impairment and the amount impaired, if any, will be charged as an expense at the time of impairment.

Stock Exchange Listings

Farmers’ common stock is listed on NASDAQ under the symbol “FMNB.” Emclaire common stock is listed on NASDAQ under the symbol “EMCF.” Under the terms of the Merger Agreement, Farmers will cause the shares of Farmers common stock to be issued in the Merger to be approved for listing on NASDAQ, subject to official notice of issuance, prior to the effective time. Upon completion of the Merger, Emclaire common stock will no longer be listed on NASDAQ and thereafter will be deregistered under the Exchange Act. Following the Merger, shares of Farmers common stock will continue to be listed on NASDAQ.

Resale of Farmers Common Shares

Farmers has registered its common shares to be issued in the Merger with the SEC under the Securities Act of 1933, as amended (the “Securities Act”).Act. No restrictions on the sale or other transfer of Farmers common shares issued in the Merger will be imposed solely as a result of the Merger, except for restrictions on the transfer of Farmers common shares issued to any MonitorEmclaire shareholder who may become an “affiliate” of Farmers for purposes of Rule 144 under the Securities Act. The term “affiliate” is defined in Rule 144 under the Securities Act and generally includes executive officers, directors and shareholders beneficially owning 10% or more of the outstanding Farmers common shares.

THE MERGER AGREEMENT

The following is a description of thecertain material termsprovisions of the Merger Agreement. AThe description in this section and elsewhere in this proxy statement/prospectus is subject to, and qualified in its entirety by reference to, the complete copytext of the Merger Agreement, which is attached asAnnex B A to this proxy statement/prospectus and incorporated by reference herein. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is incorporated into this proxy statement/prospectus by reference.important to you.We encourage you to read the Merger Agreement carefully, as it is the legal document that governs the Merger.

Explanatory Note Regarding the Merger Agreement

The Merger Agreement and this summary of the material provisions of the Merger Agreement is not intended to provide you with any factual information about Farmers or Emclaire. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings Farmers and Emclaire make with the SEC, as described in the section entitled “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document and may supplement, update or modify the disclosures about Farmers and Emclaire contained in the Merger Agreement.The Merger Agreement contains customary representations and warranties of Monitor,Emclaire, Merger Sub and Farmers. The assertions embodied in those representations and warranties are qualified by information contained in confidential disclosure schedules that the parties delivered in connection with the execution of the Merger Agreement. In addition, certain representations and warranties were made as of a specific date, and may be subject to a contractual standard of materiality different from the standard of materiality generally applicable to statements made by a corporation to shareholders or may have been used for purposes of allocating risk between the respective parties rather than establishing matters as facts.

You should not rely on the representations, warranties, covenants, or any description thereof as characterizations of the actual state of facts or condition of Farmers, Emclaire, Merger Sub or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, and covenants may have changed since the date of the Merger Agreement and do not purport to be accurate as of the date of this proxy statement/prospectus. The representations and warranties and other provisions in the Merger Agreement should not be relied on by any persons as characterizations of the actual state of facts about Farmers, Emclaire or Merger Sub at the time they were made or otherwise. Furthermore, the representations and warranties and other provisions of the Merger Agreement should be read only in conjunction with the information provided elsewhere in this proxy statement/prospectus or incorporated by reference into this proxy statement/prospectus. See the section entitled “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document for more information.

Effects of the Merger

As a result of the Merger, MonitorEmclaire will merge with and into Merger Sub, with Merger Sub as the surviving company. Promptly following the Merger, Merger Sub will be dissolved and liquidated. The Articles of Incorporation and the Code of Regulations of Farmers as in effect immediately prior to the Merger will continue to be the Articles of Incorporation and Code of Regulations for the holders of MonitorEmclaire common shares who receive Farmers common shares as Merger consideration.

As a result of the Merger, there will no longer be any publicly held Monitor common shares. To the extent that a Monitoran Emclaire shareholder receives Merger consideration in the form of cash, the MonitorEmclaire shareholder will not participate in Farmers’ future earnings and potential growth as a shareholder of Farmers and will no longer bear the risk of any losses incurred in the operation of Farmers’ business or of any decreases in the value of that business. Those MonitorEmclaire common shareholders receiving Farmers common shares as Merger consideration will only participate in Farmers’ future earnings and potential growth through their ownership of Farmers common shares. All of the other incidents of direct share ownership in Monitor,Emclaire, such as the right to vote on certain corporate decisions, to elect directors and to receive dividends and distributions from Monitor,Emclaire, will be extinguished upon completion of the Merger.

Effective Time of the Merger

TheUnless extended by mutual agreement of Farmers and Emclaire, the Merger will occur on a date to be specified by Farmers and MonitorEmclaire after the satisfaction or waiver of the last closing condition to be satisfied pursuant to the Merger Agreement, including the receipt of all regulatory and shareholder approvals and after the expiration of all regulatory waiting periods, unless extended by mutual agreement of Farmers and Monitor.periods. The Merger will become effective as of the date and time specified in the certificate of merger to be filed with the Ohio Secretary of State.State and the Statement of Merger filed with the Department of State of the Commonwealth of Pennsylvania. As of the date of this proxy statement/prospectus, the parties expect that the Merger will be effective early in the third quartersecond half of 2017.2022. However, there can be no assurance as to when or if the Merger will occur.

If the Merger is not completed by the close of business on March 13, 2018,January 31, 2023, the Merger Agreement may be terminated by either Farmers or Monitor,Emclaire, unless the failure of the closing to occur by that date is due to the failure of the party seeking to terminate the Merger Agreement to perform or observe its covenants and agreements in the Merger Agreement.

Merger Consideration

Monitor common shareholders will receive a combinationUnder the terms of cash and Farmers common shares in the Merger. AtMerger Agreement, at the effective time of the Merger, it is anticipated that each MonitorEmclaire common share will be converted into the right to receive, at the election of the holder of such Emclaire common share, either:

 

57.82

2.15 Farmers common shares;shares, or

$769.3840.00 in cash,

subject to certain allocation procedures set forth in the Merger Agreement that are intended to ensure that 85%70% of the outstanding Monitorshares of Emclaire common sharesstock are converted into the right to receive Farmers common shares and that 30% of the remaining outstanding Monitorshares of Emclaire common sharesstock are converted into the right to receive cash.

The initial exchange ratio is equalAll shares of Series C, Non-Cumulative Preferred Stock and Series D Non-Cumulative Preferred Stock of Emclaire issued and outstanding will be redeemed by Emclaire prior to the amount of cash to be paid in the Merger for each Monitor common share divided by $13.3055, the twenty (20) day volume weighted average closing price of Farmers common shares ending on February 10, 2017. A final exchange ratio will be determined by dividing the cash amount to be paid in the Merger for a Monitor common share by the twenty (20) day volume weighted average closing price of Farmers common shares ending on the penultimate trading day preceding the effective date of the Merger. Under the termstime of the Merger Agreement, the aggregateand no Merger consideration to be paid to Monitor shareholdersand/or cash in lieu of fractional shares will be based on Monitor’s Adjusted Shareholders’ Equity. The Merger Agreement also providesdelivered in exchange for such shares. All Emclaire common shares that the aggregateare owned directly by Emclaire or Farmers or any of its affiliates will be cancelled and cease to exist, and no Merger consideration will not exceed the Maximum Amount and will not be less than the Minimum Amount. If, based upon the final exchange ratio, the aggregate Merger consideration would exceed the Maximum Amount and/or be less than the Minimum Amount, the final exchange ratiocash in lieu of fractional shares will be adjusted downward or upward as necessary.delivered in exchange for such shares.

Farmers will not issue any fractional common shares in connection with the Merger. Instead, each holder of Monitor sharesEmclaire common shareholder who would otherwise be entitled to receive a fraction of a Farmers common share (after taking into account all MonitorEmclaire common shares owned by such holder at the effective time of the Merger) will receive cash (rounded to the nearest cent), without interest, in an amount equal to the Farmers fractional common share to which such holder would otherwise be entitled (rounded to the nearest thousandth when expressed in decimal form) multiplied by the volume-weighted average, rounded to the nearest one tenth of a cent, of the closing sale prices of Farmers common shares based on information reported by the NasdaqNASDAQ for the five (5)consecutive full trading days ending on the penultimate trading day preceding the effective timeclosing date of the Merger.

Under separate cover, the Exchange Agent has mailed or will shortly mail to each Emclaire common shareholder transmittal materials, a form of election for Emclaire common shareholders to make a request for the portion of the Merger consideration consisting of cash or Farmers common shares, and instructions for exchanging their Emclaire common share certificates or evidence of book-entry shares for Farmers common shares to be issued by book-entry transfer. Once the Merger is complete, the Exchange Agent will mail each holderEmclaire common shareholder who has not submitted such holder’s certificates or evidence of Monitor commonbook-entry shares transmittal materials and instructions for exchangingsurrendering their MonitorEmclaire common share certificates for Farmers common shares to be issued by book-entry transfer.the Merger consideration.

Covenants and Agreements

Conduct of Businesses Prior to the Completion of the Merger. Farmers and MonitorEmclaire have agreed that, prior to the effective time of the Merger, each will conduct its businesses, and cause its subsidiaries to conduct their respective businesses, in the ordinary course consistent with past practice in all material respects and use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships. Farmers and MonitorEmclaire have agreed to (and shall cause each of their respective subsidiaries to) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either to perform its covenants and agreements in the Merger agreementAgreement or to complete the Merger and other transactions contemplated by the Merger Agreement.

In addition to the general covenants above, Monitor hasEmclaire agreed that prior to the effective time of the Merger, subject to specified exceptions, it will not, and will not permit any of its subsidiaries to, without the prior written consent of Farmers (which shall not be unreasonably withheld or delayed):

 

issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional MonitorEmclaire common shares or other equity interest, voting debt or equity rights;

 

grant, award or issue any MonitorEmclaire stock options, restricted units, stock appreciation rights, restricted stock, awards based on the value of MonitorEmclaire’s capital stock or other equity-based awards with respect to MonitorEmclaire common shares under any of the MonitorEmclaire employee benefit plans or otherwise;

 

make, declare, pay or set aside for payment any dividend or declare or make any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock other(other than regular quarterly dividends not exceeding $0.31 per Emclaire common share, regular semi-annual dividends on the Emclaire preferred shares and from its wholly owned subsidiaries to it);

semi-annual dividends not exceeding $1.00 per share on Monitor’s common shares or dividends from its wholly owned subsidiaries to it or another of its wholly owned subsidiaries;

 

directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock;

 

amend the terms of, waive any right under, terminate, knowingly violate the terms of or enter into any contract or other binding obligation outside the ordinary course of business consistent with past practice or certain specified types of material contracts;

 

sell, mortgage, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for the MWG Disposition, those in the ordinary course of business consistent with past practice and in transactions that are not material to Emclaire and Emlenton Bank when taken as a whole;

 

acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) all or any portion of the assets, business, deposits or properties of any other entity;

 

amend the MonitorEmclaire Amended and Restated Articles of Incorporation, or the Monitor Code of Regulations,Emclaire Bylaws, or similar governing documents of any of its significant subsidiaries;

 

implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements or any regulatory agency responsible for regulating Monitor;Emclaire;

 

except as required by applicable law or under the terms of any Emclaire employee benefit plan existing as of the date of the Merger Agreement: (1) increase in any manner beyond(beyond agreed amountsamounts) the compensation, severance or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of MonitorEmclaire or its subsidiaries,Emlenton Bank, (2) other than the payment of quarterly incentive compensation to employees in the ordinary course of business consistent with past practice and financial statement accruals, pay or award, or commit to pay or award, any bonuses or incentive compensation (3) become a party to, establish, amend, alter prior interpretations of, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any employee (or newly hired employee), (4) fund any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any employee benefit plan, (5) change any actuarial assumptions used to calculate funding obligations with respect to any employee benefit plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law, or (6) hire or terminate without cause any employee who has or would have target total compensation of $75,000 or more;(beyond agreed

amounts), (3) become a party to, establish, amend, alter prior interpretations of, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any employee (or newly hired employee), (4) except as contemplated by the Merger Agreement, accelerate the vesting or lapsing of restrictions with respect to any stock-based incentive compensation, (5) fund any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any employee benefit plan, (6) change any actuarial assumptions used to calculate funding obligations with respect to any employee benefit plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law, or (7) hire or terminate without cause any employee who has or would have target total compensation of $100,000 or more;

 

take, or omit to take, any action that would, or could reasonably be expected to, prevent or impede the Merger from qualifying as atax-free “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, or, except as may be required by applicable law imposed by any governmental entity, take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the Merger, or take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger not being satisfied;

 

incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business consistent with past practice;

 

enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by law or as requested by a regulatory agency;

other than in consultation with Farmers, make any material change to its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, except as required by law or as requested by a regulatory agency;

 

settle any action, suit, claim or proceeding against it, except for settlements in an amount and for consideration not in excess of $25,000$50,000 individually (or $100,000 in the aggregate) and that would not impose any restriction on the business of it or its subsidiaries or create precedent for claims that is reasonably likely to be material to it or its subsidiaries;

 

make an application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility;

 

make or incur any capital expenditure in excess of $25,000 individually or $100,000 in the aggregate;aggregate, except for previously existing binding commitments;

 

issue any written communication of a general nature to its employees or customers without the prior approval of Farmers (which will not be unreasonably delayed or withheld), except for communications in the ordinary course of business that do not relate to the Merger;

 

make or change any material tax elections, change or consent to any change in it or its subsidiaries’ method of accounting for tax purposes (except as required by applicable tax law), enter into any structured transaction outside of its regular course of business, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return;

 

except for (1) loans or legally binding commitments for loans that have previously been approved by MonitorEmclaire prior to date of the Merger Agreement, make or acquire any loan or issue a commitment (or renew or extend an existing commitment) for any loan, or amend or modify in any material respect any existing loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $200,000, (2) with respect to amendments or modifications that have previously been approved by Monitor prior to the date of the Merger Agreement, amend or modify in any material respect any existing loan rated “special mention” or below with total credit exposure in excess of $200,000, or (3) with respect to any actions that have previously been approved by Monitor prior to the date of the Merger Agreement, modify or amend any loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Monitor, in each case in excess of $300,000; or

existing loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $1,500,000, (2) with respect to amendments or modifications that have previously been approved by Emclaire prior to the date of the Merger Agreement, amend or modify in any material respect any existing loan rated “special mention” or below with total credit exposure in excess of $1,500,000, or (3) with respect to any actions that have previously been approved by Emclaire prior to the date of the Merger Agreement, modify or amend any loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value below the fair market value thereof as determined by Emclaire, in each case in excess of $1,000,000; or

 

agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the above prohibited actions.

Farmers has agreed to a more limited set of restrictions on its business prior to the completion of the Merger. Specifically, Farmers has agreed that prior to the effective time of the Merger, except as expressly permitted by the Merger Agreement, it will not, without the prior written consent of MonitorEmclaire (which shall not be unreasonably withheld or delayed), and will not permit any of its subsidiaries to:

 

take, or omit to take, any action that would, or could reasonably be expected to, prevent or impede the Merger from qualifying as atax-free “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, or, except as may be required by applicable law imposed by any governmental entity, take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the Merger, or take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger not being satisfied;

 

make or change any material tax elections, change or consent to any change in it or its subsidiaries’ method of accounting for tax purposes (except as required by applicable tax law), enter into any structured transaction outside of its regular course of business, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return; or

structured transaction outside of its regular course of business, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return; or

 

agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the above prohibited actions.

Regulatory Matters. Farmers and Monitor haveEmclaire agreed to promptlyuse commercially reasonable efforts to prepare and file within 60 days after the date of the Merger Agreement with the SEC a registration statement on FormS-4, of which this proxy statement/prospectus is a part. Farmers has agreed to use commercially reasonable efforts to have the FormS-4 declared effective under the Securities Act as promptly as practicable after such filing, and Monitor hasEmclaire agreed to mail or deliver the proxy statement/prospectus to its shareholders. Farmers has also agreed to use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to complete the Merger, and Monitor hasEmclaire agreed to furnish all information concerning MonitorEmclaire and the holders of MonitorEmclaire common sharesshareholders as may be reasonably requested in connection with any such action.

Farmers and MonitorEmclaire have agreed to cooperate with each other and use their respective commercially reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals waivers and authorizations of all third parties and governmental entities that are necessary or advisable to complete the Merger and the bank merger and to comply with the terms and conditions of all such permits, consents, approvals and authorizations.

Additionally, each of Farmers and MonitorEmclaire have agreed to furnish to the other all information concerning itself, its subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary

or advisable in connection with this proxy statement/prospectus, the FormS-4 or any other statement, filing, notice or application made by or on behalf of Farmers, MonitorEmclaire or any of their respective subsidiaries to any governmental entity in connection with the Merger.Merger and the bank merger.

Shareholder Approval. Monitor’sEmclaire’s board of directors has resolved to recommend to the MonitorEmclaire common shareholders that they approve the Merger Agreement (subject to certain exceptions if, following the receipt of a superior proposal (as defined below), the MonitorEmclaire board of directors determines in good faith that withdrawal of such recommendation is reasonably necessary for the board of directors to comply with its fiduciary duties under OhioPennsylvania law) and to submit to the MonitorEmclaire common shareholders the Merger Agreement and any other matters required to be approved by the MonitorEmclaire common shareholders in order to carry out the intentions of the Merger Agreement.

NasdaqNASDAQ Listing. Farmers will cause the Farmers common shares to be issued in the Merger to be authorized for listing on the Nasdaq,NASDAQ, subject to official notice of issuance, prior to the effective time of the Merger.

Employee Matters. The Merger Agreement provides that as soon as administratively practicable afterat or prior to the effective time, Farmers will take all reasonable actions so that employees of MonitorEmclaire and its subsidiaries will be entitled to participate in each Farmers employee benefit plan of general applicability (other than any plan that is frozen to new participants) to the same extent as similarly-situated employees of Farmers and its subsidiaries. Farmers will cause each Farmers employee benefit plan in which employees of MonitorEmclaire and its subsidiaries are eligible to participate to recognize, for purposes of eligibility to participate in and vesting of benefits under the Farmers employee benefit plans, the services of such employees of MonitorEmclaire and its subsidiaries to the same extent such service was credited for such purposes by MonitorEmclaire and its subsidiaries.

Indemnification and Directors’ and Officers’ Insurance. From and after the effective time of the Merger, Farmers will indemnify and hold harmless, each present and former director and officer of Emclaire and Emlenton Bank to the fullest extent provided under Monitor’sEmclaire’s Amended and Restated Articles of Incorporation and Code of RegulationsBylaws, and to the extent permitted under applicable laws, each present and former

director and officer of Monitor and its subsidiaries from liabilities arising out of or pertaining to matters existing or occurring at or before the effective time of the Merger, including the transactions contemplated by the Merger Agreement. Farmers has also agreed, that for a period of six (6) years following the effective time of the Merger, it will use commercially reasonableits best efforts to provide directors’ and officers’ liability insurance that serves to reimburse the present and former officers and directors of MonitorEmclaire or any of its subsidiaries with respect to claims against such officers and directors arising from facts or events occurring before the effective time of the Merger, including the transactions contemplated by the Merger Agreement. The insurance will contain terms and conditions that are no less advantageous than the current coverage provided by Monitor,Emclaire, except that Farmers is not required to incur annual premium expense greater than 150%175% of Monitor’sEmclaire’s current annual directors’ and officers’ liability insurance premium. At the option of Farmers, prior to the completion of the Merger and in lieu of the foregoing, Farmers may purchase and pay for a tail policy for directors’ and officers’ liability insurance on the terms described in this paragraph.

No Solicitation. The Merger Agreement precludes MonitorEmclaire and its subsidiaries and their respective officers, directors, employees, agents, advisors and other retained representatives from (1) initiating, soliciting, encouraging, knowingly facilitating (including by way of providing information) or inducing inquiries, proposals or offers with respect to, or the making or completing, any acquisition proposal (as defined below) by a third party, (2) entering into, continuing or participating in any discussions or negotiations regarding, or furnishing to any third party any confidential or nonpublic information with respect to or in connection with, an acquisition proposal, (3) taking any other action to knowingly facilitate any inquiries or making any proposal that constitutes or may reasonably be expected to lead to an acquisition proposal, (4) approving, endorsing or recommending or proposing to approve, endorse or recommend any acquisition proposal or any agreement related to an acquisition proposal, (5) entering into any agreement contemplating or otherwise relating to any acquisition transaction (as defined below) with a third party or acquisition proposal, (6) entering into any agreement or agreement in principle with a third party requiring, directly or indirectly, MonitorEmclaire to abandon, terminate or fail to complete the

Merger or breach its obligations under the Merger Agreement, or (7) proposing or agreeing to do any of the actions in items (1) through (6) above. However, if at any time before Monitor’sEmclaire’s shareholder meeting MonitorEmclaire receives an unsolicited bona fide written acquisition proposal by any third party, other than as a result of taking the prohibited actions described above, and Monitor’sEmclaire’s board of directors determines, in its good faith judgment (after consultation with Monitor’sEmclaire’s financial and outside legal counsel) to constitute or to be reasonably likely to result in a superior proposal (as defined below), MonitorEmclaire and its representatives may furnish nonpublic information and participate in negotiations or discussions to the extent Monitor’sEmclaire’s board of directors has determined, in its good faith judgment (after consultation with its outside legal counsel), that the failure to take such action would cause itbe reasonably likely to violate its fiduciary duties under applicable law. Monitor hasEmclaire agreed to immediately terminate any activities, discussions or negotiations conducted before the date of the Merger Agreement with any persons other than Farmers with respect to any acquisition proposal. Monitor hasEmclaire also agreed to advise Farmers within twenty-four (24)48 hours following receipt of any acquisition proposal or any request for nonpublic information or inquiry that would reasonably be expected to lead to any acquisition proposal and the terms and conditions of such acquisition proposal (including the identity of the third party making such acquisition proposal), and will keep Farmers promptly apprised of any developments. MonitorEmclaire also agreed to simultaneously provide to Farmers any information concerning it that may be provided to any other person in connection with any acquisition proposal which has not previously been provided to Farmers.

In addition, at any time prior to Monitor’sEmclaire’s shareholder meeting, the board of directors of MonitorEmclaire may withdraw its recommendation of the Merger Agreement, and may change its recommendation with respect to the MonitorEmclaire Merger proposal, if and only if (1) from the date of the Merger Agreement MonitorEmclaire has complied with its obligations with respect to thenon-solicitation of acquisition proposals and certain other of its obligations with respect to convening the MonitorEmclaire shareholder meeting set forth in the Merger Agreement, and (2) the board of directors of MonitorEmclaire has determined in good faith, after consultation with outside legal counsel, that the taking of such action would be reasonably necessary for the board of directors to comply with its fiduciary duties under

applicable law; except that the board of directors of MonitorEmclaire may not effect such a change in its recommendation to MonitorEmclaire shareholders unless:

 

Monitor

Emclaire receives an unsolicited bona fide written acquisition proposal and the board of directors of MonitorEmclaire concludes in good faith (after consultation with its financial advisors and outside legal counsel) that such acquisition proposal is a superior proposal, after taking into account any amendment or modification to the Merger Agreement agreed to or proposed by Farmers;

 

Monitor

Emclaire provides prior written notice to Farmers at least five (5)three business days in advance (the “notice period”) of taking such action, which notice advises Farmers that the board of directors of MonitorEmclaire has received a superior proposal, specifies the material terms and conditions of such superior proposal (including the identity of the third party making the superior proposal);

 

during the notice period, MonitorEmclaire and its financial advisors and outside legal counsel negotiate with Farmers in good faith (to the extent Farmers desires to do so) to make such adjustments in the terms and conditions of the Merger Agreement so that such superior proposal ceases to constitute a superior proposal; and

 

the board of directors of MonitorEmclaire concludes in good faith (after consultation with Monitor’sEmclaire’s financial advisors and outside legal counsel) that, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications offered or agreed to by Farmers, if any, that such acquisition proposal continues to constitute a superior proposal.

If during the notice period any material revisions are made to the superior proposal, MonitorEmclaire must deliver a new written notice to Farmers and must again comply with the requirements described above with respect to such new written notice, except that the new notice period will be two (2) business days. In the event the board of directors of MonitorEmclaire does not conclude, after complying with the requirements described above, that the acquisition proposal continues to constitute a superior proposal, and afterwards seeks to change its recommendation to the MonitorEmclaire shareholders, it must comply once again with the procedures described above with respect to any future superior proposal.

As used in the Merger Agreement, “acquisition proposal” means any proposal, offer, inquiry, or indication of interest (whether binding ornon-binding, and whether communicated to MonitorEmclaire or publicly announced to Monitor’sEmclaire’s shareholders) by any person or “group” (as such term is defined in Section 13(d) under the Exchange Act), other than Farmers or any of its affiliates, relating to an acquisition transaction involving MonitorEmclaire or any of its present or future consolidated subsidiaries, or any combination of such subsidiaries.

As used in the Merger Agreement, “acquisition transaction” means any transaction or series of related transactions (other than the transactions contemplated by the Merger Agreement) involving: (1) any acquisition (whether direct or indirect, including by way of Merger, share exchange, consolidation, business combination or other similar transaction) or purchase from MonitorEmclaire by any person or “group” (as such term is defined in Section 13(d) under the Exchange Act), other than Farmers or any of its affiliates, of 15%25% or more in interest of the total outstanding voting securities of MonitorEmclaire or any of its subsidiaries (measured by voting power), or any tender offer or exchange offer that if completed would result in any person or “group” (as such term is defined in Section 13(d) under the Exchange Act), other than Farmers or any of its affiliates, beneficially owning 15%25% or more in interest of the total outstanding voting securities of MonitorEmclaire or any of its subsidiaries (measured by voting power), or any merger, consolidation, share exchange, business combination or similar transaction involving MonitorEmclaire pursuant to which the shareholders of MonitorEmclaire immediately preceding such transaction would hold less than 85%75% of the equity interests in the surviving or resulting entity of such transaction (or, if applicable, the ultimate parent thereof) (measured by voting power); (2) any sale or lease or exchange, transfer, license, acquisition or disposition of a business, deposits or assets that constitute 15%25% or more of the consolidated assets, business, revenues, net income, assets or deposits of Monitor;Emclaire; or (3) any liquidation or dissolution of MonitorEmclaire or any of its subsidiaries.

As used in the Merger Agreement, “superior proposal” means any bona fide written acquisition proposal that the board of directors of MonitorEmclaire determines in its good faith judgment to be more favorable from a financial point of view to Monitor’sEmclaire’s shareholders than the Merger and to be reasonably capable of being completed on the terms proposed, after (1) receiving the advice of outside counsel and ProBank,Raymond James, and (2) taking into account all material relevant factors (including the likelihood of consummation of such transaction on the terms set forth therein; any proposed changes to the Merger Agreement that may be proposed by Farmers in response to such acquisition proposal (whether or not during the notice period); and all legal (with the advice of outside counsel), financial (including the financing terms of any such proposal), regulatory and other aspects of such proposal (including any expense reimbursement provisions and conditions to closing)); except that for purposes of the definition of “superior proposal,” the references to “15%“25%” and “85%“75%” in the definitions of acquisition proposal and acquisition transaction are changed to “50%.”

Representations and Warranties

The Merger Agreement contains representations and warranties made by MonitorEmclaire to Farmers relating to a number of matters, including the following:

 

corporate organization, good standing, corporate power and authority, qualification to do business, and subsidiaries;

 

capitalization;

 

requisite corporate authority to enter into the Merger Agreement and to complete the contemplated transactions;

 

absence of conflicts with governing documents, applicable laws or certain agreements as a result of entering into the Merger Agreement or completing the Merger;

 

required regulatory consents and approvals necessary in connection with the Merger;

 

proper filing of documents with regulatory agencies and the SEC and the accuracy of information containedcompliance in the documents filedall material respects with the SEC;all legal requirements relating to such documents;

Emclaire’s financial statements’ conformity with U.S. GAAP and SEC requirements of Monitor’s financial statements and the absence of undisclosed liabilities;

 

broker’s and finder’s fees related to the Merger;

 

absence of a material adverse effect on MonitorEmclaire since December 31, 2016;2021;

 

compliance with applicable law;

 

non-applicability

inapplicability of state takeover laws;

 

employee compensation and benefits matters;

 

opinion from financial advisor;

 

home mortgage loan repurchases;

 

legal proceedings;

 

material contracts;

 

environmental matters;

 

tax matters;

 

absence of action or any fact or circumstance that would prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;

 

intellectual property;

 

properties;

insurance;

 

insurance;

accounting and internal controls;

 

derivatives;

 

labor matters; and

 

loan matters.

The Merger Agreement also contains representations and warranties made by Farmers and Merger Sub to MonitorEmclaire relating to a number of matters, including the following:

 

corporate organization, good standing, corporate power and authority and qualification to do business;

 

capitalization;

 

requisite corporate authority to enter into the Merger Agreement and to complete the contemplated transactions;

 

absence of conflicts with governing documents, applicable laws or certain agreements as a result of entering into the Merger Agreement or completing the Merger;

 

required regulatory consents necessary in connection with the Merger;

 

proper filing of documents with regulatory agencies and the SEC and the accuracy of information contained in the documents filed with the SEC;

 

the

Farmers’ financial statements’ conformity with GAAP and SEC requirementsthe absence of Farmers’ financial statements filed with the SEC;undisclosed liabilities;

 

broker’s and finder’s fees related to the Merger;

 

compliance with applicable law;

 

legal proceedings;

the absence of a material adverse effect on Farmers since December 31, 2016;2021;

 

tax matters;

 

absence of any action or any fact or circumstance that would prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;

 

intellectual property;

 

properties;

 

insurance;

 

accounting and internal controls;

 

ownership of FarmersEmclaire common shares; and

 

opinion from financial advisor; and

available funds.

Certain of these representations and warranties are qualified as to “materiality” or “material adverse effect.” For purposes of the Merger Agreement, a “material adverse effect” with respect to Farmers or Monitor,Emclaire, as the case may be, means a material adverse effect on (1) the financial condition, results of operations or business of that party and its subsidiaries taken as a whole, or (2) a material adverse effect on the ability of that party to complete the Merger on a timely basis, other than, with respect to (1) above, effects resulting from (A) changes after the date of the Merger Agreement in applicable GAAP or regulatory accounting requirement, or the enforcement, implementation or interpretation thereof, (B) changes after the date of the Merger Agreement in

laws of general applicability to companies in the industries in which the party and its subsidiaries operate, (C) changes, after the date of the Merger Agreementevents, or developments, in global, national or regional political conditions (including the outbreak or escalation of war (declared or undeclared) or hostilities, any occurrence or threat of acts of terrorism or any armed hostilities associated therewith and any national or international calamity, disaster, or emergency or any escalation thereof) or in or general economic or market conditions affecting the financial services industry generally and not specifically relating to a party or its subsidiaries (including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets) affectingor other changes, events or developments that affect banks or their holding companies in the industries in which the party and its subsidiaries operate,generally, (D) failure, in and of itself, to meet earnings projections, but not including any underlying causes thereof, (E) the public disclosure of the Merger Agreement and compliance with the Merger Agreement, (F) any outbreaklegal action asserted or escalationother actions initiated by any holder of hostilities, declaredEmclaire common shares or undeclared actspreferred shares or any holder of warFarmers common shares arising out of or terrorism,related to the Merger Agreement, (G) the announcement, pendency or completion of the transactions contemplated in the Merger Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relations with MonitorEmclaire or its subsidiariesEmlenton Bank or (H) actions or omissions taken with the prior written consent of the other party, except, with respect to clauses (A), (B), and (C) and (F), to the extent that the effects of such change are disproportionately adverse to the financial condition, results of operations or business of such party and its subsidiaries, taken as a whole, as compared to other companies in the industry in which the party and its subsidiaries operate.

The representations and warranties in the Merger Agreement do not survive the effective time of the Merger and,Merger. Furthermore, as described below under “– Termination,” if the Merger Agreement is validly terminated, there will be no liability under the representations and warranties of the parties, or otherwise under the Merger Agreement, unless a party knowingly breached the Merger Agreement.

This summary and the copy of the Merger Agreement attached to this document asAnnex BA are included solely to provide investors with information regarding the terms of the Merger Agreement. They are not intended to provide factual information about the parties or any of their respective subsidiaries or affiliates. The Merger Agreement contains representations and warranties by Farmers and Monitor,Emclaire, which were made only for purposes of that agreement and as of specific dates. The representations, warranties and covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger Agreement, may be subject to

limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those generally applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement, and in reviewing the representations, warranties and covenants contained in the Merger Agreement or any descriptions thereof in this summary, it is important to bear in mind that such representations, warranties and covenants or any descriptions thereof were not intended by the parties to the Merger Agreement to be characterizations of the actual state of facts or condition of Farmers, MonitorEmclaire or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Farmers’ public disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the other information contained in the reports, statements and filings that Farmers publicly files with the SEC. For more information regarding these documents, see the section entitled “Where You Can Find More Information” in the forepart of this document.

Conditions to the Merger

Conditions to Each Party’s Obligations. The respective obligations of each of Farmers and MonitorEmclaire to complete the Merger are subject to the satisfaction of the following conditions:

 

the receipt of the requisite

approval of the MonitorMerger Agreement by Emclaire’s common shareholders, on substantially the terms and conditions in the Merger Agreement;

 

amendment of Monitor’s Articles of Incorporation to eliminate the right of first refusal provisions;

authorization for the listing on the NasdaqNASDAQ of the Farmers common shares to be issued in the Merger;Merger, subject to official notice of issuance;

the effectiveness of the registration statement on FormS-4, of which this proxy statement/prospectus is a part, and the absence of a stop order or proceeding initiated or threatened by the SEC for that purpose;

 

the absence of any order, injunction or decree issued by any court or agency or other law preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and

 

the receipt of all regulatory approvals of governmental entities necessary to complete the transactions contemplated by the Merger Agreement, and the expiration of all applicable statutory waiting periods.

Conditions to Obligations of Farmers and Merger Sub. The obligation of Farmers and Merger Sub to complete the Merger is also subject to the satisfaction, or waiver by Farmers, of the following conditions:

 

the accuracy of Monitor’sEmclaire’s representations and warranties in the Merger Agreement as of the date of the Merger Agreement and as of the effective time of the Merger (other than representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date), subject to applicable materiality qualifiers (and the receipt of an officer’s certificate from MonitorEmclaire to that effect);

 

the performance by MonitorEmclaire in all material respects of all obligations required to be performed by it under the Merger Agreement at or prior to the effective time of the Merger (and the receipt of an officer’s certificate from MonitorEmclaire to that effect);

 

the receipt of a legal opinion, dated as of the closing date, from its counsel to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code;

 

the entryagreement by Monitor into a definitive agreement for the MWG Disposition not later than March 31, 2017,William C. Marsh (the current President and the consummationChief Executive Officer and Chairman of the MWG Disposition priorBoard of Emclaire and Emlenton Bank) to the effective time of the Merger;

the mutual agreementserve as Senior Vice President of Farmers and eachMarket President, Pennsylvania, of Joseph Wachtelthe Farmers Bank; and Diane Shriver, respectively, upon the terms under which each of Mr. Wachtel and Ms. Schriver will continue employment with Farmers; and

the absence of any action, determination or law enacted, entered, enforced or deemed applicable to the transactions contemplated by the Merger Agreement, including the Merger and the bank merger, by any governmental entity which imposes any restriction, requirement or condition that, individually or in the aggregate would, after the effective time of the Merger, restrict or burden Farmers or the surviving company or any of their respective affiliates in connection with the transactions contemplated by the Merger Agreement or with respect to the business or operations of Farmers or the surviving company that would have a material adverse effect on Farmers, the surviving company or any of their respective affiliates, in each case measured on a scale relative to Monitor.Emclaire.

Conditions to Obligations of MonitorEmclaire. The obligation of MonitorEmclaire to complete the Merger is also subject to the satisfaction, or waiver by Monitor,Emclaire, of the following conditions:

 

the accuracy of the representations and warranties of Farmers and Merger Sub in the Merger Agreement as of the date of the Merger Agreement and as of the effective time of the Merger (other than representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date), subject to applicable materiality qualifiers (and the receipt of an officer’s certificate from Farmers to that effect);

 

the performance by Farmers and Merger Sub in all material respects of all obligations required to be performed by iteither of them under the Merger Agreement at or prior to the effective time of the Merger (and the receipt of an officer’s certificate from Farmers and Merger Sub to that effect);

 

the receipt of a legal opinion, dated as of the closing date, from its counsel to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; and

Farmers’ authorization of delivery of the Farmers common shares to be issued in the Merger and the delivery by Farmers of the cash consideration (and, to the extent then determinable, any cash payable in lieu of fractional shares) to be paid in the Merger.

Termination; Termination Fee

The Merger Agreement may be terminated at any time prior to the effective time of the Merger, whether before or after approval of the Merger by MonitorEmclaire’s common shareholders:

 

by mutual written consent of Farmers and Monitor;Emclaire;

 

by either party, if a required governmental approval is denied by final,non-appealable action, or if a governmental entity has issued a final,non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the transactions contemplated by the Merger Agreement;

 

by either Farmers or Monitor,Emclaire, if the Merger has not closed on or before March 13, 2018,January 31, 2023, unless the failure to close by such date is due to the terminating party’s failure to observe the covenants and agreements of such party in the Merger Agreement;

 

by either Farmers or Monitor,Emclaire, if there is a breach by the other party of any of its covenantsrepresentations or agreementswarranties or any failure to perform in all material respects any of its representationscovenants or warrantiesagreements, that would, either individually or in the aggregate with other breaches by such party, result in, if occurring or continuing on the closing date, the failure of the conditions of the terminating party’s obligation to complete the Merger and which is not cured within thirty (30)30 days following written notice to the party committing such breach or by its nature or timing cannot be cured within such time period (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement);

 

by Farmers, if at any time prior to the effective time of the Merger, Monitor’sEmclaire’s board of directors has (1) failed to recommend to the shareholders of MonitorEmclaire that they vote to approve the Merger Agreement, (2) changed its recommendation with respect to the Merger Agreement, including by publicly approving, endorsing or recommending, or publicly proposing to approve, endorse or recommend, certain acquisition proposals other than the Merger Agreement, whether or not permitted by the Merger Agreement, or has resolved to do the same, or (3) materially breached itsnon-solicitation obligations or its obligations to recommend to the Monitor shareholders the adoption of the Merger proposal and call a shareholder meeting for that purpose;

Agreement, (2) changed its recommendation with respect to the Merger Agreement, including by publicly approving, endorsing or recommending, or publicly proposing to approve, endorse or recommend, certain acquisition proposals other than the Merger Agreement, whether or not permitted by the Merger Agreement, or has resolved to do the same, or (3) failed to substantially comply with its obligations to recommend to the Emclaire shareholders the adoption of the Merger proposal and call a shareholder meeting for that purpose or its non-solicitation obligations;

 

by Farmers, if a tender offer or exchange offer for 15% or more of the outstanding MonitorEmclaire common shares is commenced (other than by Farmers or a subsidiary of Farmers), and Monitor’sEmclaire’s board of directors recommends that the shareholders of MonitorEmclaire tender their shares in such tender or exchange offer or otherwise fails to recommend that such shareholders reject such tender or exchange offer within ten (10) business days;

 

by Monitor,Emclaire, if Farmers fails to take the actions required in the Merger Agreement to (1) promptlyuse commercially reasonable efforts to prepare and file with the SEC a registration statement on FormS-4 within 60 days of the Merger Agreement, use commercially reasonable efforts to have the FormS-4 declared effective under the Securities Act as promptly as practicable after such filing or use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to complete the Merger or (2) fails to cause the Farmers common shares to be issued in the Merger to be authorized for listing on the Nasdaq,NASDAQ, subject to official notice of issuance, prior to the effective time of the Merger; or

 

by either Farmers or Monitor,Emclaire, if the MonitorEmclaire common shareholders do not vote to approve the Merger Agreement at athe special meeting duly held shareholders meeting (including any adjournment or postponement of such meeting).; or

by Emclaire, if both of the following conditions are satisfied: (i) the average closing price of Farmers’ common stock for the 20 consecutive trading days ending on the tenth calendar day immediately prior to the effective time of the Merger is less than $13.616 (80% of the starting price of $17.02, as defined in the Merger Agreement), and (ii) a specified ratio of the sales prices of Farmers’ common stock is less than a specified index ratio of stocks of a bank peer group, unless Farmers elects to make an adjustment to the exchange ratio.

MonitorEmclaire must pay Farmers a termination fee of $300,000$3,750,000 in the following circumstances:

 

(1) either (A) MonitorEmclaire or Farmers terminates the Merger Agreement because the Merger has not been completed by March 13, 2018,January 31, 2023, or (B) Farmers terminates the Merger Agreement because of Monitor’sEmclaire’s willful breach of the Merger Agreement, or (C) Monitor or Farmers terminates the Merger Agreement because Monitor shareholders have not approved the Merger Agreement at the Monitor shareholder meeting, and (2) prior to termination, there has been a publicly announced acquisition proposal by any third party to MonitorEmclaire or its shareholders or a third party announced an intention to make an acquisition proposal, and (3) within twelve (12)12 months of such termination MonitorEmclaire either (A) completes an acquisition transaction, or (B) enters into any definitive agreement contemplating or otherwise relating to any acquisition transaction (but not including any confidentiality agreement required by thenon-solicitation provisions contained in the Merger Agreement) with respect to an acquisition transaction or acquisition proposal, whether or not such acquisition transaction or acquisition proposal is subsequently completed (but changing, in the case of the preceding clauses (A) and (B), the references to the 15%25% and 85%75% amounts in the definitions of acquisition transaction and acquisition proposal to 50%); or

 

Either Emclaire or Farmers terminates the Merger Agreement because Emclaire shareholders have not approved the Merger Agreement at the Emclaire shareholder meeting, and within six months of such termination Emclaire either (A) completes an acquisition transaction, or (B) enters into any definitive agreement contemplating or otherwise relating to any acquisition transaction (but not including any confidentiality agreement required by the non-solicitation provisions contained in the Merger Agreement) with respect to an acquisition transaction or acquisition proposal, whether or not such acquisition transaction or acquisition proposal is subsequently completed (but changing, in the case of

the preceding clauses (A) and (B), the references to the 25% and 75% amounts in the definitions of acquisition transaction and acquisition proposal to 50%); or

Farmers terminates the Merger Agreement prior to the effective time of the Merger, because (1) the MonitorEmclaire board of directors (A) failed to recommend that the MonitorEmclaire shareholders approve the Merger Agreement, (B) withdrew, qualified or modified, or proposed publicly to withdraw, qualify or modify, in a manner adverse to Farmers, or took any action, or made any public statement, filing or release inconsistent with,changed its recommendation in favor ofwith respect to the Merger Agreement, including by publicly approving, endorsing or recommending, or publicly approved, endorsed or recommended, or publicly proposedproposing to approve, endorse or recommend, any acquisition proposal, whether or not permitted by the Merger Agreement, or resolvedresolving to do the same, or (C) materially breachedfailed to substantially comply with its obligations to call a special meeting of the MonitorEmclaire shareholders and recommend that they approve the Merger Agreement and to refrain from soliciting alternative acquisition proposals, or (2) a tender offer or exchange offer is commenced for 15% or more of the outstanding shares of MonitorEmclaire common shares (other than by Farmers or one of its subsidiaries), and the board of directors of MonitorEmclaire recommends that the MonitorEmclaire shareholders tender their shares in such tender or exchange offer or otherwise fails to recommend that they reject such tender offer or exchange offer within the ten business day period provided for in Rule14e-2(a) under the Exchange Act.

Farmers must pay Monitor a termination fee of $100,000 if Monitor terminates the Merger Agreement because Farmers fails to take the actions required in the Merger Agreement to (1) promptly prepare and file with the SEC a registration statement on FormS-4, use commercially reasonable efforts to have the FormS-4 declared effective under the Securities Act as promptly as practicable after such filing or use its commercially reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and approvals required to complete the Merger or (2) fails to cause the Farmers common shares to be issued in the Merger to be authorized for listing on the Nasdaq, subject to official notice of issuance, prior to the effective time of the Merger

Effect of Termination

If the Merger Agreement is validly terminated, the Merger Agreement will become void without any liability on the part of any of the parties, except in the case of a party’s willful breach of the Merger Agreement. However, the provisions of the Merger Agreement relating to confidentiality obligations of the parties, the termination fee, publicity and certain other technical provisions will continue in effect notwithstanding termination of the Merger Agreement.

Amendments, Extensions and Waivers

The Merger Agreement may be amended by the parties, by action taken or authorized by their respective boards of directors, at any time before or after approval of the Merger Agreement proposal by the MonitorEmclaire shareholders, in writing signed on behalf of each of the parties, provided that after any approval of the

transactions contemplated by the Merger Agreement by the MonitorEmclaire shareholders, there may not be, without further approval of such shareholders, any amendment of the Merger Agreement that requires further approval under applicable law.

At any time prior to the effective time of the Merger, the parties, by action taken or authorized by their respective boards of directors, may extend the time for the performance of any of the obligations or other acts of the other party, waive any inaccuracies in the representations and warranties contained in the Merger Agreement or waive compliance with any of the agreements or conditions contained in the Merger Agreement. Any agreement on the part of a party to any extension or waiver must be in a signed writing.

Stock Market Listing

Application will be made by Farmers to have the Farmers common shares to be issued in the Merger approved for listing on the Nasdaq,NASDAQ, which is the principal trading market for existing Farmers common shares. It is a condition to both parties’ obligation to complete the Merger that such approval is obtained, subject to official notice of issuance.

Fees and Expenses

All fees and expenses incurred in connection with the Merger, the Merger Agreement, and the transactions contemplated by the Merger Agreement will be paid by the party incurring such fees or expenses, whether or not the Merger is completed.

COMPARISON OF CERTAIN RIGHTS OF MONITOREMCLAIRE SHAREHOLDERS AND FARMERS SHAREHOLDERS

Those shareholders of Monitor that do not exercise dissenters’ rights andEmclaire who receive Farmers common shares in the Merger will therefore, become shareholders of Farmers. Their rights as shareholders of Farmers will be governed by the Ohio Revised Code and by Farmers’ Amended Articles of Incorporation, as amended, and Amended Code of Regulations, while MonitorEmclaire shareholders are currently governed by the Ohio Revised CodePennsylvania Business Corporation Law (the “PBCL”) and by Monitor’sEmclaire’s Amended and Restated Articles of Incorporation and Code of Regulations.Bylaws. Although the rights of the holders of Farmers’ common shares and those of the holders of shares of Monitor’sEmclaire’s common sharesstock are similar in many respects, there are some differences. These differences relateare due to differences between Ohio and Pennsylvania corporate law, differences between provisions of the Articles of Incorporation, as amended, of Farmers and the Amended and Restated Articles of Incorporation of Farmers and the Articles of Incorporation of Monitor,Emclaire, and differences between provisions of the Amended Code of Regulations of Farmers and the CodeBylaws of Regulations of Monitor.Emclaire.

The following chart compares certain rights of the holders of MonitorEmclaire common shares to the rights of holders of Farmers common shares in areas where those rights are materially different.shares. This summary, however, does not purport to be a complete description of such differences and is qualified in its entirety by reference to the relevant provisions of Ohio law or Pennsylvania law, as applicable, and the respective corporate governance instruments of MonitorEmclaire and Farmers.

Quorum of Shareholders

 

MonitorEmclaire

Farmers

Under Monitor’s Code of Regulations,Emclaire’s Bylaws, the shareholders presentpresence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on the particular matter shall constitute a quorum except when a greater proportion is requiredfor purposes of considering such matter, unless otherwise provided by law, the Articles of Incorporation, as amended, or the Code of Regulations.

statute.		  

Farmers

Under Farmers’ Amended Code of Regulations, shareholders representing not less than one thirdone-third (1⁄/3) of the outstanding voting stock constitute a quorum for a meeting, except when a greater proportion is required by law or the Articles of Incorporation.

Call of Special Meeting of Shareholders

 

MonitorEmclaire

Monitor’s CodeFarmers

The Bylaws of Regulations providesEmclaire provide that a special meetingmeetings of the shareholders only may be called by the chairpersonpresident of the board, or the president, orEmclaire, a majority of the board of directors acting with or without a meeting.

its executive committee.		  

Farmers

Farmers’ Amended Code of Regulations provides that special meetings of shareholders may be called at any time by the chairman of the board of directors, president or a vice president, or a majority of the board of directors acting with or without a meeting, or the holder or holders ofone-fourth (1⁄/4) of all shares outstanding and entitled to vote at the meeting.

Authorized Capital

 

Monitor

Monitor’s Articles of Incorporation authorize Monitor to issue up to twelve thousand (12,000) common without par value.Emclaire

  

Farmers

Emclaire’s authorized capital stock consists of 12,000,000 shares of common stock, par value $1.25 per share, and 3,000,000 shares of preferred stock, par value $1.00 per share.Farmers’ Amended Articles of Incorporation, as amended, authorize Farmers to issue up to thirty-five million (35,000,000)50,000,000 shares, each without par value.

Voting Rights

Emclaire

Farmers

Emclaire’s Bylaws provide that except as may be otherwise provided by statute or by the Articles of Incorporation, at every shareholders meeting, every shareholder entitled to vote thereat shall have the right to one vote for every share owned on the record date fixed for that meeting.Farmers’ Articles of Incorporation, as amended, provide that each shareholder shall be entitled to one (1) vote for each share of stock standing in his name on the books of Farmers.

Removal of Directors

 

Monitor

Monitor’s Code of Regulations provides that all directors or any individual director may be removed from office, without cause, by the affirmative vote of the holders of record of not less than seventy-five percent (75%) of the shares having voting power with respect to the election of such directors.Emclaire

  

Farmers

Emclaire’s Bylaws provide that upon application of any shareholder or director, the court may remove from office any director in case of a fraudulent or dishonest act, or gross abuse of authority or discretion with respect to Emclaire, or for any other proper cause, and may bar from office any director so removed for a period prescribed by the court.Farmers’ Amended Code of Regulations provides that any or all of the directors shall only be removed with cause and only by the affirmative vote of the holders of not of not less than two thirds ( 2⁄3sixty-six and two-thirds percent (66 2/3%) of the voting stock of the corporationFarmers at a meeting called for such purpose.

Sufficient showing of cause shall be determined by a two-thirds (2/3) majority vote of the unaffected directors if there exists a minimum of four (4) unaffected directors. In the event there exists less than four (4) unaffected directors, then sufficient showing of cause shall be determined by unanimous vote of the unaffected directors and by an opinion of an uninterested legal counsel designated by the president of Farmers, which such opinion concurs with the findings of the unaffected directors.

Pre-emptive Rights

 

Monitor

Monitor’s Articles of Incorporation do not grantpre-emptive rights to shareholders.Emclaire

  

Farmers

Farmers’ Amended

Emclaire’s Articles of Incorporation provide that shareholders shall not have preemptive rights in connection with the issuance of capital stock.Farmers’ Articles of Incorporation, as amended, provide that, subject to certain exceptions, shareholders have the right to purchase shares in any offering or sale by Farmers of shares for cash in proportion to their respective holdings of Farmers common shares.

Amendment of Articles of Incorporation and Code of Regulations or Bylaws

 

MonitorEmclaire

Monitor’sFarmers

Emclaire’s Articles of Incorporation providemay be amended in accordance with the PBCL which generally provides that any amendments require the affirmative voteamendment of the articles of incorporation may be made if it is first approved by the board of directors and thereafter approved by the holders of at least a majority of the outstanding securities of Monitorshares entitled to vote ongenerally in an election of directors, voting together as a single class, as well as such amendment.

additional vote of the preferred stock as may be required by the provisions of any series thereof.		  

Farmers

Farmers’ Amended Articles of Incorporation, as amended, may only be amended by the affirmative vote of the holders of shares of Farmers entitling them to exercise at leasttwo-thirds (2⁄/3) of voting power of Farmers, except that an amendment of the article relating to certain “control share acquisitions” and “business combinations” requires the affirmative vote of seventy-five percent (75%) of the voting power of Farmers.

Monitor’s Code of Regulations provides that the Code of Regulations

Emclaire

Farmers

Emclaire’s Bylaws may be amended by the majority vote of the board of directors at anya regular or special meeting of the shareholders held for such purpose byboard of directors or the affirmative vote of the holders of record of shares entitling them to exercise a majoritytwo-thirds of the voting poweroutstanding shares of common stock at a regular or special meeting of shareholders convened for such proposal.purpose.  Farmers’ Amended Code of Regulations provides that the Amended Code of Regulations may be amended or repealed by the affirmative vote of the holders of a majority of the voting power of Farmers, at any meeting of shareholders called for that purpose, except that an amendment of the regulation relating to Article III, Section 3 — Election and Term of Directors, shall require a sixty-six and two-thirds percent (66 2/3%) majority vote of the shareholders.
Farmers’ Amended Code of Regulations provides that the Amended Code of Regulations may be amended or withoutrepealed at any meeting of the board of directors called for that purpose at which a meeting,quorum is present, by the affirmative vote of a majority of the members in attendance, or by the unanimous written consent of the holdersboard oftwo-thirds ( 2⁄3) directors, provided that such regulations as amended or repealed will not divest the shareholders of the voting power, nor limit their power to adopt, amend, or repeal the Amended Code of Farmers.Regulations.

Votes Required to Approve Certain Transactions

 

MonitorEmclaire

Monitor’sFarmers

Under Emclaire’s Articles of Incorporation, providea merger, consolidation, liquidation or dissolution of Emclaire, or any action that actions requiringwould result in the sale or other disposition of all or substantially all of Emclaire’s assets, must be approved by the affirmative vote of the holders of at leasttwo-thirds ( 2⁄3) of the outstanding shares of Monitor entitled to vote may be exercised by the affirmativecommon stock, as well as such additional vote of the holderspreferred stock as may be required by the provisions of any series thereof. Provided, however, this two-thirds vote requirement shall not apply if the merger or other transaction is first approved by a majority of the outstanding sharesboard of Monitor entitleddirectors then in office (as was the case with respect to vote, or withoutthe Merger and Merger Agreement). If approved by a meeting by the holders of at leasttwo-thirds ( 2⁄3)majority of the outstanding shares of Monitor.

board, then the merger or consolidation will only require such affirmative vote as may be required by applicable law.		  

Farmers

Pursuant to Farmers’ Amended Articles of Incorporation, a “control share acquisition” must be approved by the shareholders. If the control share acquisition is approved by at leasttwo-thirds (2⁄/3) of the board of directors, then the proposed control share acquisition must be approved by the affirmative vote of at least atwo-thirds (2⁄/3) of the voting power of Farmers. If the control share acquisition is not so approved by the board of directors, the proposed control share acquisition must be approved by the affirmative vote of at least eighty percent (80%) of the voting power of Farmers.

Provisions with Possible Anti-Takeover Effects

 

MonitorEmclaire

CertainFarmers

The following discussion is a general summary of certain provisions of Monitor’sPennsylvania law and Emclaire’s Amended and Restated Articles of Incorporation and CodeBylaws that may be deemed to have an “anti-takeover” effect:

•  Emclaire’s Articles of Regulations provide “anti-takeover” protections, which includeIncorporation and Bylaws.    Emclaire’s Amended and Restated Articles of Incorporation and Bylaws contain a number of provisions relating to corporate governance and rights of first refusalshareholders that might be deemed to have a potential anti-takeover effect. In addition, these provisions will also render the otherremoval of Emclaire’s board of directors or management more difficult. These provisions include a classified board of directors, provisions related to shareholder nominations, calling of Monitor.a special meeting of shareholders, no cumulative voting for the election of directors, and supermajority shareholder vote for a merger, consolidation or liquidation unless approved by a majority of the board.

•  Pennsylvania Law.    Under the PBCL, certain anti-takeover provisions apply to Pennsylvania “registered corporations” (e.g., publicly traded companies), including those related to (i) control share acquisitions, (ii) disgorgement of profits by certain controlling persons, (iii) business combination transactions with interested shareholders and (iv) the rights of shareholders to demand fair value for their stock following a control transaction. Pennsylvania law allows registered corporations to opt-out of any of these anti-takeover provisions. Emclaire is a registered corporation under the PBCL.

  

Farmers

Farmers’ Amended Articles of Incorporation, as amended, and Amended Code of Regulations contain provisions that may serve as anti-takeover protections, which include:

 

•  the division of the board of directors into three classes;

 

•  the ability of Farmers’ board of directors to fill vacancies and newly created directorships by a vote of the majority of the directors then in office; and

 

•  the supermajority voting requirements for certain corporate transactions.

INFORMATION ABOUT MONITOREMCLAIRE

Share Ownership of Certain MonitorEmclaire Beneficial Owners and Management

Persons and groups owning in excess of 5% of Emclaire’s common stock are required to file certain reports regarding such ownership pursuant to the Exchange Act. The following table sets forth, as of [•], 2022, certain information with respectas to the MonitorEmclaire common sharesstock beneficially owned (unless otherwise indicated) by (i) each directorpersons or groups who own more than 5% of Monitor,the Emclaire common stock, (ii) the directors of Emclaire, (iii) certain executive officers of MonitorEmclaire (which we refer to as “named executive officers”), and (iii)(iv) all such directors and executive officers of Emclaire as a group, asgroup. Management of July 17, 2017. Except as indicated in the below table,Emclaire knows of no person is known to Monitor to be a beneficial owner ofor group that owned more than 5% of Monitor common shares. The business address of each director and executive officer of Monitor is 13210 State Route 226, Big Prairie, Ohio 44611

A person has beneficial ownership of shares if he or she has the power to vote or dispose of such shares. This power can be exclusive or shared, direct or indirect. Except as otherwise noted, the beneficial owners listed have sole voting and/or investment power with respect to the shares shown.

As of July 17, 2017, there were 10,000outstanding shares of MonitorEmclaire common stock outstanding.at the record date.

 

Directors, Named Executive Officers and 5% Holders  Common Shares
Beneficially
Owned		   Percent
Of Class		 

Doug Akins

   114    1.14% 

Paul A. Miller

   1,242    12.42% 

Diane or Ross Shriver

   18    * 

James R. Smail Trust

   6,729    67.29% 

Mark A. Sparr

   125    1.25% 

Anne M. Taylor

   25    * 

Joseph M. or Jeanne Wachtel

   175    1.75% 

Total executive officers, directors and 5% or greater holders

   8,428    84.28% 

Name

  Amount and
Nature of
Beneficial
Ownership(1)		  Percent of
Outstanding
Common
Stock
Beneficially
Owned		 

Directors:

   

Henry H. Deible

   74,620(2)   2.73% 

Nicholas D. Varischetti

   68,154   2.49% 

Robert W. Freeman

   65,788(3)   2.41% 

William C. Marsh

   63,528(4)   2.32% 

John B. Mason

   41,042   1.50% 

Milissa S. Bauer

   39,197(5)   1.43% 

James M. Crooks

   30,029(6)   1.10% 

Mark A. Freemer

   24,500*  

Deanna K. McCarrier

   23,989*  

David L. Cox

   20,830(7)   * 

Henry H. Deible II

   884*  

Steven J. Hunter

   200*  

Named Executive Officers:

   

Jennifer A. Poulsen

   7,732(8)   * 

Amanda L. Engles

   4,712(9)   * 

All directors and executive officers as a group (16 persons)

   471,020(10)   17.22% 

 

*Percentage

Represents less than 1% of the outstanding Emclaire common stock.

(1)

Based upon information provided by the respective beneficial owners and filings with the SEC made pursuant to the Exchange Act. For purposes of this table, pursuant to rules promulgated under the Exchange Act, a person or entity is considered to beneficially own shares of common stock if they directly or indirectly have or share (i) voting power, which includes the power to vote or to direct the voting of the shares, or (ii) investment power, which includes the power to dispose or direct the disposition of the shares. Unless otherwise indicated, a person or entity has sole voting power and sole investment power with respect to the indicated shares.

(2)

Of the 74,620 shares beneficially owned does not exceed one percent (1%).by Mr. Deible, 34,254 shares are owned jointly with his spouse and 7,165 shares are held by an entity owned and controlled by Mr. Deible.

(3)

Of the 65,788 shares beneficially owned by Mr. Freeman, 1,833 shares are owned individually by his spouse.

(4)

Of the 63,528 shares beneficially owned by Mr. Marsh, 5,128 shares are held in Emclaire’s 401(k) Plan.

(5)

Of the 39,197 shares beneficially owned by Ms. Bauer, 6,379 shares are owned jointly with her spouse, 14,288 shares are owned individually by her spouse and 100 shares are owned individually by her son.

(6)

Of the 30,029 shares beneficially owned by Mr. Crooks, 3,273 shares are owned jointly with his spouse and 635 shares are owned individually by his spouse.

(7)

Of the 20,830 shares beneficially owned by Mr. Cox, 19,330 are owned jointly with his spouse and 500 shares are owned individually by his spouse.

(8)

Of the 7,732 shares beneficially owned by Ms. Poulsen, 2,684 shares are held in Emclaire’s 401(k) Plan.

(9)

Of the 4,712 shares beneficially owned by Ms. Engles, 3,212 shares are held in Emclaire’s 401(k) Plan.

(10)

Of the 471,020 shares beneficially owned by all directors and officers as a group, 14,345 shares are held in Emclaire’s 401(k) Plan.

Description of Monitor’sEmclaire’s Business

MonitorEmclaire is aone-bank Pennsylvania corporation and financial holding company that provides a full range of retail and commercial financial products and services to customers in western Pennsylvania through its wholly owned subsidiary bank, Emlenton Bank.

Emlenton Bank was organized in 1996 under the laws of the State of Ohio1900 as a national banking association and is registered undera financial intermediary whose principal business consists of attracting deposits from the BHCA. Monitorgeneral public and investing such funds in real estate loans secured by liens on residential and commercial properties, consumer loans, commercial business loans, marketable securities and interest-earning deposits. Emlenton Bank currently operates through its wholly-owned subsidiary, Monitor Bank. Monitora network of 19 retail branch offices in Venango, Allegheny, Butler, Clarion, Clearfield, Crawford, Elk, Jefferson and Mercer Counties, Pennsylvania. Emclaire and Emlenton Bank are headquartered in Emlenton, Pennsylvania.

Emlenton Bank is subject to examination and comprehensive regulation by the OCC, which is Emlenton Bank’s chartering authority, and the FDIC, which insures customer deposits held by Emlenton Bank to the full extent provided by law. Emlenton Bank is a full-service Ohio banking association engaged in banking throughmember of the FRB of Cleveland and the FHLB of Pittsburgh. Emclaire is a single office located in Big Prairie, Holmes County, Ohio. Monitor Bank is an independent communityregistered bank serving the needs of clients in the surrounding counties of Wayne, Holmes and Ashland.

Monitor Bank has a rich heritage in the community, being chartered on October 7, 1911 as a partnership between John C. Lake and B.A. Lake, father and son. History says that on October 7, 1911, John C. Lake, a wealthy local industrialist and entrepreneur, traveled the three mile distanceholding company pursuant to the Farmers Bank in Shreve, Ohio,BHCA and a financial holding company under the GLBA and is subject to withdraw a large amount of cash for the purchase of some machineryregulation and was toldexamination by the cashierFRB.

The principal lending activities of Emclaire are the Farmers Bank that the bank did not have that much cash on hand. Being very disturbed that the bank at which he was dealing wasn’t able to dispense to him his own cash, he gave them twenty-four hours to come up with the cash and traveled home; on the way deciding that he would open his own bank. Upon his return home he drafted a partnership agreement with his son forming Monitor Bank, capitalizing it with $2,000.00 and named in honororigination of the Civil War battleship, the USS Monitor. Monitor also was the name given to the main product manufactured at his local factory, the Monitor Sad Iron, the first self-heating clothing iron.

Monitor Bank has continued through the decades serving the banking needs of its clients in a very personal and professional manner with a full array of personal, smallresidential mortgage, commercial mortgage, commercial business and consumer loans. The majority of Emclaire’s loans are originated in and secured by property within Emclaire’s primary market area.

Emclaire maintains an investment portfolio of securities such as U.S. government agencies, mortgage-backed securities, collateralized mortgage obligations, municipal, corporate and equity securities. Investment decisions are made within policy guidelines as established by its board of directors.

Deposits are the primary source of Emclaire’s funds for lending and investing activities. Emclaire offers a wide variety of deposit account products to both consumer and commercial deposit customers, including time deposits, noninterest bearing and interest-bearing demand deposit accounts, savings deposits and money market accounts. Secondary sources of funds are derived from loan repayments, investment maturities and borrowed funds. Loan repayments can be considered a relatively stable funding source, while deposit activity is greatly influenced by interest rates and general market conditions. Emclaire also has access to funds through other various sources.

Emclaire competes for loans, deposits and customers with other commercial banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market funds, credit unions and other nonbank financial service providers.

At March 31, 2022, Emclaire had 140 full time equivalent employees. There is no collective bargaining agreement between Emclaire and its employees, and Emclaire believes its relations with employees is satisfactory.

At March 31, 2022, Emclaire had $1.1 billion in total assets, $86.7 million in stockholders’ equity, $794.9 million in net loans and services.$936.0 million in total deposits.

EXPERTS

Farmers

The consolidated financial statements of Farmers as of December 31, 20162021, 2020 and 20152019 and for each of the three (3) years in the period ended December 31, 20162021 and the effectiveness of Farmers’ internal control over financial reporting as of December 31, 20162021 have been audited by Crowe HorwathCliftonLarsonAllen LLP, an independent registered public accounting firm, as set forth in their report appearing in Farmers’ Annual Report on Form10-K for the year ended December 31, 20162021, as amended, and incorporated in this prospectusherein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

Emclaire

The consolidated financial statements of Emclaire as of and for the year ended December 31, 2021 have been audited by BKD, LLP, as set forth in their report thereon, and the consolidated financial statements of Emclaire as of and for the year ended December 31, 2020 have been audited by Crowe LLP, as set forth in their report thereon. The reports of BKD, LLP and Crowe LLP on the respective consolidated financial statements appear in Emclaire’s Annual Report on Form 10-K for the year ended December 31, 2021 and have been incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing.

LEGAL MATTERS

Vorys Sater, Seymour and Pease LLP has rendered an opinion that the Farmers common shares to be issued to the MonitorEmclaire common shareholders in connection with the Merger have been duly authorized and, if issued as contemplated by the Merger Agreement, will be validly issued, fully paid andnon-assessable under the laws of the State of Ohio. Certain U.S. federal income tax consequences relating to the Merger will also be passed upon for MonitorEmclaire by Critchfield, Critchfield & Johnston, Ltd.Silver Freedman and for Farmers by Vorys, Sater, Seymour and Pease LLP.Vorys.

EMCLAIRE FUTURE SUBMISSION OF SHAREHOLDER PROPOSALS

Emclaire intends to hold a 2022 annual meeting of shareholders only if the Merger is not completed. If Emclaire holds an annual meeting in 2022, shareholders desiring to submit proposals for inclusion in Emclaire’s proxy materials for the 2022 annual meeting in accordance with Rule 14a-8 under the Exchange Act must deliver such proposal in writing to the Secretary of Emclaire at the principal executive offices of Emclaire at 612 Main Street, Post Office Box D, Emlenton, Pennsylvania 16373, within a reasonable time prior to any such meeting to be considered timely. Shareholder proposals other than those to be included in Emclaire’s proxy materials for a 2022 annual meeting following the procedures described in Rule 14a-8 under the Exchange Act, may be made by shareholders entitled to vote at the meeting if advance notice is timely given.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Farmers and Emclaire file reports, proxy statements, and other information with the SEC under the Exchange Act. The SEC maintains an Internet website that contains reports, proxy statements, and other information about issuers, such as Farmers and Emclaire, who file electronically with the SEC. The address of the site is http://www.sec.gov. In addition, documents filed with the SEC by Farmers, including the registration statement on Form S-4, of which this proxy statement/prospectus forms a part, will be available free of charge by accessing the “Investor Relations” section of Farmers’ website at www.farmersbankgroup.com or, alternatively, by directing a request to Farmers Investor Relations, Farmers National Banc Corp., 20 South Broad Street, Canfield, Ohio 44406, (330) 533-3341. The reports and other information filed by Emclaire with the SEC are available free of charge by accessing the “Investor Relations” section of Emclaire’s website at www.emclairefinancial.com or, alternatively, by directing a request by telephone or mail to Emclaire Financial Corp., 612 Main Street, Emlenton, Pennsylvania 16373, Attention: Jennifer A. Poulsen, Secretary, (844) 767-2311. The web addresses of the SEC, Farmers and Emclaire are included as inactive textual references only. Except as specifically incorporated by reference into this proxy statement/prospectus, information on those web sites is not part of this proxy statement/prospectus.

Farmers has filed with the SEC a registration statement on Form S-4 to register its common shares to be issued to Emclaire common shareholders as part of the Merger consideration. This document constitutes the prospectus of Farmers filed as part of the registration statement, in addition to being a proxy statement for Emclaire common shareholders. As permitted by SEC rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may obtain a free copy of the registration statement, including any amendments, schedules and exhibits as set forth above.

Statements contained in this document as to the contents of any contract or other documents referred to in this document are not necessarily complete, and each such statement is qualified in its entirety by reference to that contract or other document filed as an exhibit with the SEC. The SEC allows Farmers and Emclaire to incorporate certain information into this document by reference to other information that has been filed with the SEC. This means that Farmers and Emclaire can disclose important business and financial information to you by referring you to another document filed separately with the SEC. The information that Farmers and Emclaire incorporates by reference is deemed to be part of this proxy statement/prospectus, except for any information that is superseded by information in this document. The documents that are incorporated by reference contain important information about Farmers and Emclaire, respectively, and you should read this document together with any other documents incorporated by reference in this document.

Farmers

This document incorporates by reference the following documents that have previously been filed with the SEC by Farmers (FileNo. 001-35296):

 

•

Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022 as amended by Amendment No.  1 on Form 10-K/A thereto filed with the SEC on May 6, 2022;

•

Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022, filed with the SEC on May 5, 2022;

•

Current Reports on Form 8-K filed with the SEC on March 24, 2022 and April 22, 2022, only to the extent filed and not furnished;

•

Definitive Proxy Statement on Schedule 14A filed with the SEC on March 17, 2022; and

Annual Report on Form10-K
•

The description of Farmers common shares, no par value, contained in Exhibit 4.2 to Farmers’ Amendment No. 1 on Form 10-K/A filed with the SEC on May 6, 2022, and as amended by any subsequent amendments and reports filed for the purpose of updating that description.

Emclaire

This document incorporates by reference the year ended December 31, 2016,following documents that have previously been filed with the SEC on March 7, 2017;

by Emclaire (File No. 001-34527):

 

Quarterly Report on Form10-Q for the fiscal quarter ended March 31, 2017, filed with the SEC on May 9, 2017;
•

Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 16, 2022;

 

Current Reports on Form8-K filed with the SEC on March 17, 2017, April 6, 2017, and April 21, 2017;
•

Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022, filed with the SEC on May 6, 2022;

 

Definitive Proxy Statement on Schedule 14A filed with the SEC on March 16, 2017; and
•

Current Reports on Form 8-K filed with the SEC on January 28, 2022, March  24, 2022 and April 29, 2022 only to the extent filed and not furnished; and

 

The description of Farmers common shares, no par value, contained in Farmers’ Current Report on Form8-K filed with the SEC on December 10, 2010, and any amendment or report filed with the SEC for the purpose of updating such description.
•

The description of the common stock of Emclaire included as Exhibit 4.2 to Emclaire’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 20, 2020.

In addition, Farmers is incorporatingthis proxy statement/prospectus also incorporates by reference any documents it may file under Section 13 (a)subsequently filed by Farmers or Emclaire with the SEC, pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act, of 1934, as amended, after the date of this document and prior to the date of each company’sEmclaire’s special meeting of shareholders. Information furnished to (but not filed with) the SEC by Farmers or Emclaire under any Current Report on Form 8-K shall not be incorporated by reference.

Farmers filesand Emclaire file annual, quarterly and special reports, proxy statements and other business and financial information with the SEC. You may obtain the information incorporated by reference and any other materials Farmers or Emclaire files with the SEC without charge by following the instructions in the section entitled “WHERE YOU CAN FIND MORE INFORMATION” in the forepart of this document.

To obtain timely delivery of these documents, you must request the information no later than [•], 2022, five business days before the date of the Emclaire special meeting, in order to receive them before the Emclaire special meeting.

Neither Farmers nor Emclaire has not authorized anyone to giveprovide you with any information or make any representation aboutother than the Merger or its company that is different from, or in addition to, that containedinformation included in this document and documents which are incorporated by reference. If anyone provides you with different or in any of the materials that have been incorporated into this document. Therefore, if anyone does give youinconsistent information, of this sort, you should not rely on it. If youYou should assume that the information appearing in this document and the documents incorporated by reference are accurate only as of their respective dates. Each of Farmers’ and Emclaire’s business, financial condition, results of operations and prospects may have changed since those dates. Neither the mailing of this proxy statement/prospectus to holders of Emclaire common stock nor the issuance by Farmers of shares of Farmers common stock in a jurisdiction where offersconnection with the Merger will create any implication to exchange orthe contrary.

This proxy statement/prospectus does not constitute an offer to sell, or solicitationsa solicitation of offersan offer to exchange or purchase, thebuy, any securities, offered by this document or the solicitation of proxies is unlawful,a proxy, in any jurisdiction to or if you are afrom any person to whom it is unlawful to direct these types of activities, thenmake any such offer or solicitation in such jurisdiction. Except where the offer presented in this document does not extend to you. Thecontext otherwise indicates, information contained in this document speaks only as of the date ofproxy statement/prospectus regarding Farmers has been provided by Farmers and information contained in this document unless the information specifically indicates that another date applies.

proxy statement/prospectus regarding Emclaire has been provided by Emclaire.

ANNEX A

Dissenters’ Rights Under Section 1701.85 of the Ohio General Corporation Law

1701.85 Dissenting shareholders – compliance with section – fair cash value of shares.

(A) (1) A shareholder of a domestic corporation is entitled to relief as a dissenting shareholder in respect of the proposals described in sections 1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this section.

(2) If the proposal must be submitted to the shareholders of the corporation involved, the dissenting shareholder shall be a record holder of the shares of the corporation as to which the dissenting shareholder seeks relief as of the date fixed for the determination of shareholders entitled to notice of a meeting of the shareholders at which the proposal is to be submitted, and such shares shall not have been voted in favor of the proposal.

(3) Not later than 20 days before the date of the meeting at which the proposal will be submitted to the shareholders, the corporation may notify the corporation’s shareholders that relief under this section is available. The notice shall include or be accompanied by all of the following:

(a) A copy of this section;

(b) A statement that the proposal can give rise to rights under this section if the proposal is approved by the required vote of the shareholders;

(c) A statement that the shareholder will be eligible as a dissenting shareholder under this section only if the shareholder delivers to the corporation a written demand with the information provided for in division (A)(4) of this section before the vote on the proposal will be taken at the meeting of the shareholders and the shareholder does not vote in favor of the proposal.

(4) If the corporation delivers notice to its shareholders as provided in division (A)(3) of this section, a shareholder electing to be eligible as a dissenting shareholder under this section shall deliver to the corporation before the vote on the proposal is taken a written demand for payment of the fair cash value of the shares as to which the shareholder seeks relief. The demand for payment shall include the shareholder’s address, the number and class of such shares, and the amount claimed by the shareholder as the fair cash value of the shares.

(5) If the corporation does not notify the corporation’s shareholders pursuant to division (A)(3) of this section, not later than ten days after the date on which the vote on the proposal was taken at the meeting of the shareholders, the dissenting shareholder shall deliver to the corporation a written demand for payment to the dissenting shareholder of the fair cash value of the shares as to which the dissenting shareholder seeks relief, which demand shall state the dissenting shareholder’s address, the number and class of such shares, and the amount claimed by the dissenting shareholder as the fair cash value of the shares.

(6) If a signatory, designated and approved by the dissenting shareholder, executes the demand, then at any time after receiving the demand, the corporation may make a written request that the dissenting shareholder provide evidence of the signatory’s authority. The shareholder shall provide the evidence within a reasonable time but not sooner than 20 days after the dissenting shareholder has received the corporation’s written request for evidence.

(7) The dissenting shareholder entitled to relief under division (A)(3) of section 1701.84 of the Revised Code in the case of a merger pursuant to section 1701.80 of the Revised Code and a dissenting shareholder entitled to relief under division (A) (5) of section 1701.84 of the Revised Code in the case of a merger pursuant

A - 1

to section 1701.801 of the Revised Code shall be a record holder of the shares of the corporation as to which the dissenting shareholder seeks relief as of the date on which the agreement of merger was adopted by the directors of that corporation. Within 20 days after the dissenting shareholder has been sent the notice provided in section 1701.80 or 1701.801 of the Revised Code, the dissenting shareholder shall deliver to the corporation a written demand for payment with the same information as that provided for in division (A)(4) of this section.

(8) In the case of a merger or consolidation, a demand served on the constituent corporation involved constitutes service on the surviving or the new entity, whether the demand is served before, on, or after the effective date of the merger or consolidation. In the case of a conversion, a demand served on the converting corporation constitutes service on the converted entity, whether the demand is served before, on, or after the effective date of the conversion.

(9) If the corporation sends to the dissenting shareholder, at the address specified in the dissenting shareholder’s demand, a request for the certificates representing the shares as to which the dissenting shareholder seeks relief, the dissenting shareholder, within 15 days from the date of the sending of such request, shall deliver to the corporation the certificates requested so that the corporation may endorse on them a legend to the effect that demand for the fair cash value of such shares has been made. The corporation promptly shall return the endorsed certificates to the dissenting shareholder. A dissenting shareholder’s failure to deliver the certificates terminates the dissenting shareholder’s rights as a dissenting shareholder, at the option of the corporation, exercised by written notice sent to the dissenting shareholder within 20 days after the lapse of the15-day period, unless a court for good cause shown otherwise directs. If shares represented by a certificate on which such a legend has been endorsed are transferred, each new certificate issued for them shall bear a similar legend, together with the name of the original dissenting holder of the shares. Upon receiving a demand for payment from a dissenting shareholder who is the record holder of uncertificated securities, the corporation shall make an appropriate notation of the demand for payment in its shareholder records. If uncertificated shares for which payment has been demanded are to be transferred, any new certificate issued for the shares shall bear the legend required for certificated securities as provided in this paragraph. A transferee of the shares so endorsed, or of uncertificated securities where such notation has been made, acquires only the rights in the corporation as the original dissenting holder of such shares had immediately after the service of a demand for payment of the fair cash value of the shares. A request under this paragraph by the corporation is not an admission by the corporation that the shareholder is entitled to relief under this section.

(B) Unless the corporation and the dissenting shareholder have come to an agreement on the fair cash value per share of the shares as to which the dissenting shareholder seeks relief, the dissenting shareholder or the corporation, which in case of a merger or consolidation may be the surviving or new entity, or in the case of a conversion may be the converted entity, within three months after the service of the demand by the dissenting shareholder, may file a complaint in the court of common pleas of the county in which the principal office of the corporation that issued the shares is located or was located when the proposal was adopted by the shareholders of the corporation, or, if the proposal was not required to be submitted to the shareholders, was approved by the directors. Other dissenting shareholders, within that three-month period, may join as plaintiffs or may be joined as defendants in any such proceeding, and any two or more such proceedings may be consolidated. The complaint shall contain a brief statement of the facts, including the vote and the facts entitling the dissenting shareholder to the relief demanded. No answer to a complaint is required. Upon the filing of a complaint, the court, on motion of the petitioner, shall enter an order fixing a date for a hearing on the complaint and requiring that a copy of the complaint and a notice of the filing and of the date for hearing be given to the respondent or defendant in the manner in which summons is required to be served or substituted service is required to be made in other cases. On the day fixed for the hearing on the complaint or any adjournment of it, the court shall determine from the complaint and from evidence submitted by either party whether the dissenting shareholder is entitled to be paid the fair cash value of any shares and, if so, the number and class of such shares. If the court finds that the dissenting shareholder is so entitled, the court may appoint one or more persons as appraisers to receive evidence and to recommend a decision on the amount of the fair cash value. The appraisers have power and authority specified in the order of their appointment. The court thereupon shall make a finding as to the fair

A - 2

cash value of a share and shall render judgment against the corporation for the payment of it, with interest at a rate and from a date as the court considers equitable. The costs of the proceeding, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable. The proceeding is a special proceeding and final orders in it may be vacated, modified, or reversed on appeal pursuant to the Rules of Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505 of the Revised Code. If, during the pendency of any proceeding instituted under this section, a suit or proceeding is or has been instituted to enjoin or otherwise to prevent the carrying out of the action as to which the shareholder has dissented, the proceeding instituted under this section shall be stayed until the final determination of the other suit or proceeding. Unless any provision in division (D) of this section is applicable, the fair cash value of the shares that is agreed upon by the parties or fixed under this section shall be paid within 30 days after the date of final determination of such value under this division, the effective date of the amendment to the articles, or the consummation of the other action involved, whichever occurs last. Upon the occurrence of the last such event, payment shall be made immediately to a holder of uncertificated securities entitled to payment. In the case of holders of shares represented by certificates, payment shall be made only upon and simultaneously with the surrender to the corporation of the certificates representing the shares for which the payment is made.

(C) (1) If the proposal was required to be submitted to the shareholders of the corporation, fair cash value as to those shareholders shall be determined as of the day prior to the day on which the vote by the shareholders was taken and, in the case of a merger pursuant to section 1701.80 or 1701.801 of the Revised Code, fair cash value as to shareholders of a constituent subsidiary corporation shall be determined as of the day before the adoption of the agreement of merger by the directors of the particular subsidiary corporation. The fair cash value of a share for the purposes of this section is the amount that a willing seller who is under no compulsion to sell would be willing to accept and that a willing buyer who is under no compulsion to purchase would be willing to pay, but in no event shall the fair cash value of a share exceed the amount specified in the demand of the particular shareholder. In computing fair cash value, both of the following shall be excluded:

(a) Any appreciation or depreciation in market value resulting from the proposal submitted to the directors or to the shareholders;

(b) Any premium associated with control of the corporation, or any discount for lack of marketability or minority status.

(2) For the purposes of this section, the fair cash value of a share that was listed on a national securities exchange at any of the following times shall be the closing sale price on the national securities exchange as of the applicable date provided in division (C)(1) of this section:

(a) Immediately before the effective time of a merger or consolidation;

(b) Immediately before the filing of an amendment to the articles of incorporation as described in division (A) of section 1701.74 of the Revised Code;

(c) Immediately before the time of the vote described in division (A)(1)(b) of section 1701.76 of the Revised Code.

(D)(1) The right and obligation of a dissenting shareholder to receive fair cash value and to sell such shares as to which the dissenting shareholder seeks relief, and the right and obligation of the corporation to purchase such shares and to pay the fair cash value of them terminates if any of the following applies:

(a) The dissenting shareholder has not complied with this section, unless the corporation by its directors waives such failure;

A - 3

(b) The corporation abandons the action involved or is finally enjoined or prevented from carrying it out, or the shareholders rescind their adoption of the action involved;

(c) The dissenting shareholder withdraws the dissenting shareholder’s demand, with the consent of the corporation by its directors;

(d) The corporation and the dissenting shareholder have not come to an agreement as to the fair cash value per share, and neither the shareholder nor the corporation has filed or joined in a complaint under division (B) of this section within the period provided in that division.

(2) For purposes of division (D)(1) of this section, if the merger, consolidation, or conversion has become effective and the surviving, new, or converted entity is not a corporation, action required to be taken by the directors of the corporation shall be taken by the partners of a surviving, new, or converted partnership or the comparable representatives of any other surviving, new, or converted entity.

(E) From the time of the dissenting shareholder’s giving of the demand until either the termination of the rights and obligations arising from it or the purchase of the shares by the corporation, all other rights accruing from such shares, including voting and dividend or distribution rights, are suspended. If during the suspension, any dividend or distribution is paid in money upon shares of such class or any dividend, distribution, or interest is paid in money upon any securities issued in extinguishment of or in substitution for such shares, an amount equal to the dividend, distribution, or interest which, except for the suspension, would have been payable upon such shares or securities, shall be paid to the holder of record as a credit upon the fair cash value of the shares. If the right to receive fair cash value is terminated other than by the purchase of the shares by the corporation, all rights of the holder shall be restored and all distributions which, except for the suspension, would have been made shall be made to the holder of record of the shares at the time of termination.

A - 4

ANNEX B

AGREEMENT AND PLAN OF MERGER

by and among

MONITOR BANCORP, INC.EMCLAIRE FINANCIAL CORP.,

FARMERS NATIONAL BANC CORP.,

and

FMNB MERGER SUBSIDIARY II,V, LLC

 

 

Dated as of March 13, 201723, 2022

TABLE OF CONTENTS

Page
ARTICLE I
THE MERGER

1.1

The Merger

B - 1

1.2

Effective Time

B - 1

1.3

Effects of the Merger

B - 1

1.4

Conversion of Shares

B - 2

1.5

Articles of Organization and Operating Agreement of the Surviving Company

B - 4

1.6

Managers and Officers

B - 4

1.7

The Bank Merger

B - 4

1.8

Effect on Purchaser Common Shares

B - 4
ARTICLE II
DELIVERY OF MERGER CONSIDERATION

2.1

Exchange Agent

B - 5

2.2

Delivery of Merger Consideration

B - 5

2.3

Election and Exchange Procedures

B - 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY

3.1

Corporate Organization

B - 8

3.2

Capitalization

B - 9

3.3

Authority; No Violation

B - 10

3.4

Consents and Approvals

B - 11

3.5

Reports

B - 11

3.6

Financial Statements

B - 11

3.7

Broker’s Fees

B - 12

3.8

Absence of Changes

B - 12

3.9

Compliance with Applicable Law

B - 12

3.10

State Takeover Laws

B - 13

3.11

Company Benefit Plans

B - 13

3.12

Approvals

B - 16

3.13

Opinion

B - 16

3.14

Loan Put-Backs

B - 16

3.15

Legal Proceedings

B - 16

3.16

Material Contracts

B - 17

3.17

Environmental Matters

B - 18

3.18

Taxes

B - 18

3.19

Reorganization

B - 19

3.20

Intellectual Property

B - 19

3.21

Properties

B - 20

3.22

Insurance

B - 21

3.23

Accounting and Internal Controls

B - 21

B - i

Table of Contents

(Continued)

Page

3.24

Derivatives

B - 21

3.25

Labor

B - 22

3.26

Loans; Loan Matters

B - 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB

4.1

Corporate Organization

B - 23

4.2

Capitalization

B - 23

4.3

Authority; No Violation

B - 23

4.4

Consents and Approvals

B - 24

4.5

Reports

B - 24

4.6

Financial Statements

B - 24

4.7

Broker’s Fees

B - 25

4.8

Compliance with Applicable Law

B - 25

4.9

Legal Proceedings

B - 25

4.10

Absence of Changes

B - 25

4.11

Taxes

B - 25

4.12

Approvals

B - 26

4.13

Reorganization

B - 26

4.14

Intellectual Property

B - 26

4.15

Properties

B - 27

4.16

Insurance

B - 27

4.17

Accounting and Internal Controls

B - 28

4.18

Ownership of Company Common Shares

B - 28

4.19

Opinion

B - 28

4.20

Available Funds

B - 29
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1

Conduct of Businesses Prior to the Effective Time

B - 29

5.2

Company Forbearances

B - 29

5.3

Purchaser Forbearances

B - 31
ARTICLE VI
ADDITIONAL AGREEMENTS

6.1

Regulatory Matters

B - 32

6.2

Access to Information

B - 33

6.3

Shareholder Approval

B - 33

6.4

Nasdaq Listing; Reservation of Purchaser Common Shares

B - 34

6.5

Employee Matters

B - 34

B - ii

Table of Contents

(Continued)

Page

6.6

Indemnification; Directors’ and Officers’ Insurance

B - 35

6.7

No Solicitation

B - 36

6.8

Takeover Laws

B - 39

6.9

Financial Statements and Other Current Information

B - 39

6.10

Notification of Certain Matters

B - 39

6.11

Shareholder Litigation

B - 39

6.12

Transition

B - 39

6.13

Tax Representation Letters

B - 40

6.14

Continuity of Interest

B - 40
ARTICLE VII
CONDITIONS PRECEDENT

7.1

Conditions to Each Party’s Obligation to Effect the Merger

B - 40

7.2

Conditions to Obligations of Purchaser and Merger Sub

B - 41

7.3

Conditions to Obligations of Company

B - 42
ARTICLE VIII
TERMINATION AND AMENDMENT

8.1

Termination

B - 42

8.2

Effect of Termination

B - 43

8.3

Fees and Expenses

B - 44

8.4

Amendment

B - 44

8.5

Extension; Waiver

B - 44
ARTICLE IX
GENERAL PROVISIONS

9.1

Closing

B - 45

9.2

Nonsurvival of Representations, Warranties and Agreements

B - 45

9.3

Notices

B - 45

9.4

Interpretation

B - 46

9.5

Counterparts

B - 46

9.6

Entire Agreement

B - 46

9.7

Governing Law; Jurisdiction

B - 46

9.8

Waiver of Jury Trial

B - 46

9.9

Publicity

B - 47

9.10

Assignment; Third-Party Beneficiaries

B - 47

9.11

Specific Performance

B - 47

9.12

Disclosure Schedule

B - 47

B - iii

INDEX OF DEFINED TERMS

 

   SectionPage 

Acquisition AgreementARTICLE I

THE MERGER

1.1    The Merger

   8.3(b)(i)A-1 

Acquisition Proposal1.2    Effective Time

   6.7(g)(ii)A-1 

Acquisition Transaction1.3    Effects of the Merger

   6.7(g)(iii)A-2 

Agreement1.4    Conversion of Shares

   PreambleA-2 

Bankruptcy1.5    Restricted Stock and Equity ExceptionStock Options

   3.3(a)A-4 

BHC Act1.6    Articles of Organization and Operating Agreement of the Surviving Company

   3.1(a)A-4 

Book-Entry Shares1.7    Managers and Officers

   1.4(c)A-4 

Capitalization Date Outstanding Share Count1.8    The Bank Merger

   3.2(a)A-4 

Cash Consideration1.9    Effect on Purchaser Common Shares

   1.4(b)(i)A-5 

Cash ElectionARTICLE II

DELIVERY OF MERGER CONSIDERATION

2.1    Exchange Agent

   1.4(b)(i)A-5 

Cash Election Shares2.2    Delivery of Merger Consideration

   1.4(b)(i)A-5 

Certificate2.3    Election and Exchange Procedures

   1.4(c)A-5 

Change in the2.4    Company RecommendationRestricted Share Election and Exchange Procedures

   6.3A-8 

ClosingARTICLE III

REPRESENTATIONS AND WARRANTIES OF COMPANY

3.1    Corporate Organization

   9.1A-8 

Closing Date3.2    Capitalization

   9.1A-9 

Code3.3    Authority; No Violation

   RecitalsA-10 

Collective Bargaining Agreement3.4    Consents and Approvals

   3.25A-11 

Company3.5    Reports

   PreambleA-11 

Company Benefit Plans3.6    Financial Statements

   3.11(a)A-12 

Company Bylaws3.7    Broker’s Fees

   3.1(b)A-12 

Company Capitalization Date3.8    Absence of Changes

   3.2(a)A-12 

Company Certificate3.9    Compliance with Applicable Law

   3.1(b)A-13 

Company Common Shares3.10   State Takeover Laws

   1.4(a)A-13 

3.11   Company Disclosure ScheduleBenefit Plans

   9.12A-14 

Company Recommendation3.12   Approvals

   6.3A-17 

Company Shareholder Approval3.13   Opinion

   6.3A-17 

Company Shares3.14   Loan Put-Backs

   1.4(c)A-17 

Confidentiality Agreement3.15   Legal Proceedings

   6.2(b)A-17 

Controlled Group Liability3.16   Material Contracts

   3.11(o)(i)A-18 

Dissenting Shareholder3.17   Environmental Matters

   2.3(p)A-19 

Dissenting Shares3.18   Taxes

   2.3(p)A-19 

DPC Shares3.19   Reorganization

   1.4(a)A-20 

Effective Time3.20   Intellectual Property

   1.2A-20 

Election3.21   Properties

   2.3(a)A-22 

Election Deadline3.22   Insurance

   2.3(d)A-22 

Employees3.23   Accounting and Internal Controls

   5.2(h)

Environmental Laws

3.17

Equity Rights

3.2(a)

ERISA

3.11(a)

ERISA Affiliate

3.11(o)(ii)

Exchange Agent

2.1

Exchange Agent Agreement

2.1

Exchange Fund

2.2

Exchange Ratio

1.4(b)(ii)

FDIC

3.1(c)

Federal Reserve

3.4

Form of Election

2.3(b)

Form S-4

3.4

Governmental Entity

3.4A-22 

 

B - ivA-i

IndexTable of Defined TermsContents

(Continued)

 

   SectionPage 

Holder3.24   Derivatives

   2.3A-23 

Indemnified Parties3.25   Labor

   6.6(a)A-23 

Intellectual Property3.26   Loans; Loan Matters

   3.20(e)(i)A-23 

IRSARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB

4.1    Corporate Organization

   3.11(b)A-24 

IT Assets4.2    Capitalization

   3.20(e)(ii)A-25 

Knowledge4.3    Authority; No Violation

   9.4A-25 

Law4.4    Consents and Approvals

   3.9(a)A-25 

Letter of Transmittal4.5    Reports

   2.3(h)A-26 

Licensed Intellectual Property4.6    Financial Statements

   3.20(e)(iii)A-26 

Liens4.7    Broker’s Fees

   3.2(d)A-27 

Loans4.8    Compliance with Applicable Law

   3.26(a)A-27 

Material Contract4.9    Legal Proceedings

   3.16(a)A-27 

Merger4.10   Absence of Changes

   RecitalsA-27 

Merger Consideration4.11   Taxes

   1.4(b)A-27 

Multiemployer Plan4.12   Approvals

   3.11(f)A-28 

Multiple Employer Plan4.13   Reorganization

   3.11(f)A-28 

MWG Disposition4.14   Intellectual Property

   1.4(c)A-28 

Nasdaq4.15   Properties

   2.3(m)A-29 

Non-Election Shares4.16   Insurance

   1.4(b)(iii)A-29 

Nonqualified Deferred Compensation Plan4.17   Accounting and Internal Controls

   3.11(d)A-30 

Notice Period4.18   Ownership of Company Common Shares

   6.7(d)(2)A-30 

OCC4.19   Available Funds

   3.4A-30 

Owned Intellectual PropertyARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1    Conduct of Businesses Prior to the Effective Time

   3.20(e)(iv)A-31 

Owned Properties5.2    Company Forbearances

   3.21, 3.21A-31 

Permitted Encumbrances5.3    Purchaser Forbearances

   3.21, 3.21A-33 

PersonARTICLE VI

ADDITIONAL AGREEMENTS

6.1    Regulatory Matters

   3.16(a)A-34 

Premium Cap6.2    Access to Information

   6.6(b)A-35 

Previously Disclosed6.3    Shareholder Approval

   9.12A-35 

Proxy Statement6.4    Nasdaq Listing; Reservation of Purchaser Common Shares

   3.4A-36 

Purchaser6.5    Employee Matters

   PreambleA-36 

Purchaser Bank6.6    Indemnification; Directors’ and Officers’ Insurance

   1.7A-39 

Purchaser Capitalization Date6.7    No Solicitation

   4.2A-39 

Purchaser Closing Price6.8    Takeover Laws

   2.3(m)A-42 

Purchaser Disclosure Schedule6.9    Financial Statements and Other Current Information

   9.12

Purchaser SEC Reports

4.5(b)

Purchaser Stock Plans

4.2

Qualified Plans

3.11(e)

Real Property

3.21, 3.21

Regulatory Agencies

0

Regulatory Agreement

3.15(b)

Regulatory Approvals

3.4

Representative

6.7(a)

Requisite Regulatory Approvals

7.1(f)

SEC

3.4

Securities Act

3.2(a)

Shareholders’ Meeting

6.3

Shortfall Number

1.4(g)(ii)(2)

SRO

3.4A-42 

 

B - vA-ii

IndexTable of Defined TermsContents

(Continued)

 

   SectionPage 

6.10   Notification of Certain Matters

A-42

6.11   Shareholder Litigation

A-43

6.12   Transition

A-43

6.13   Voting Agreements

A-43

6.14   Tax Representation Letters

A-43

6.15   Continuity of Interest

A-43

6.16   Additional Purchaser Director

A-43

6.17   Section 16 Matters

A-44

6.18   Redemption of Company Preferred Shares

A-44

ARTICLE VII

CONDITIONS PRECEDENT CONDITIONS PRECEDENT

7.1    Conditions to Each Party’s Obligation to Effect the Merger

A-44

7.2    Conditions to Obligations of Purchaser and Merger Sub

A-44

7.3    Conditions to Obligations of Company

A-45

ARTICLE VIII

TERMINATION AND AMENDMENT TERMINATION AND AMENDMENT

8.1    Termination

A-46

8.2    Effect of Termination

A-48

8.3    Fees and Expenses

A-49

8.4    Amendment

A-50

8.5    Extension; Waiver

A-50

ARTICLE IX

GENERAL PROVISIONS GENERAL PROVISIONS

9.1    Closing

A-50

9.2    Nonsurvival of Representations, Warranties and Agreements

A-50

9.3    Notices

A-50

9.4    Interpretation

A-51

9.5    Counterparts

A-51

9.6    Entire Agreement

A-51

9.7    Governing Law; Jurisdiction

A-51

9.8    Waiver of Jury Trial

A-52

9.9    Publicity

A-52

9.10   Assignment; Third-Party Beneficiaries

A-52

9.11   Specific Performance

A-52

9.12   Disclosure Schedule

A-52

9.13   Delivery by Electronic Transmission

A-53

A-iii

INDEX OF DEFINED TERMS

Section

Acquisition Agreement

8.3(b)(i), 8.3(b)(i)

Acquisition Proposal

6.7(g)(ii)

Acquisition Transaction

6.7(g)(iii)

Adjusted Purchaser Ratio

8.1(h)(ii)

Adjusted Stock Consideration

8.1(h)(ii)

Agreement

Preamble

Average Closing Price

8.1(h)(ii)

Bank Merger

1.8

Bank Merger Agreement

1.8

Banking Department

3.4

Bankruptcy and Equity Exception

3.3(a)

BHC Act

3.1(a)

Book-Entry Share

1.4(d)

Cash Consideration

1.4(c)(i)

Cash Election

1.4(c)(i)

Cash Election Shares

1.4(c)(i)

Certificate

1.4(d)

Certificate of Merger

1.2

Change in the Company Recommendation

6.3

Closing

9.1

Closing Date

9.1

Code

Recitals

Collective Bargaining Agreement

3.25

Company

Preamble

Company 401(k) Plan

6.5(e)

Company Articles

3.1(b)

Company Bank

1.8

Company Benefit Plans

3.11(a)

Company Bylaws

3.1(b)

Company Capitalization Date

3.2(a)

Company Common Shares

1.4(a)

Company Disclosure Schedule

9.12

Company Owned Properties

3.21

Company Permitted Encumbrances

3.21

Company Preferred Shares

1.4(b)1.4(a)

Company Real Property

3.21

Company Recommendation

6.3

Company Restricted Share

1.5(a)

Company Shareholder Approval

6.3

Company Shareholders’ Meeting

6.3

Company Stock Plan

1.5(a)

Confidentiality Agreement

6.2(b)

Controlled Group Liability

3.11(o)(i)

Covered Employee

6.5(h)

DPC Shares

1.4(a)

Effective Time

1.2

Election

2.3(a)

Election Deadline

2.3(d)

Employees

5.2(h)

A-iv

Index of Defined Terms

(Continued)

Section

Environmental Laws

3.17

Equity Rights

3.2(a)

ERISA

3.11(a)

ERISA Affiliate

3.11(o)(ii)

Exchange Act

1.4(a)

Exchange Agent

2.1

Exchange Agent Agreement

2.1

Exchange Fund

2.2

Exchange Ratio

1.4(c)(ii)

FDIC

3.1(c)

Federal Reserve

3.4

Financial Statements

3.6(a)

Form of Election

2.3(a)

Form S-4

3.4

Governmental Entity

3.4

Holder

2.3

Index Price

8.1(h)(ii)

Index Ratio

8.1(h)(ii)

Intellectual Property

3.20(e)(i)

IRS

3.11(b)

IT Assets

3.20(e)(ii)

Knowledge

9.4

Law

3.9(a)

Letter of Transmittal

2.3(b)

Licensed Intellectual Property

3.20(e)(iii)

Liens

3.2(d)

LLC Act

1.2

Loans

3.26(a)

Material Adverse Effect

3.8

Material Contract

3.16(a)

Merger

Recitals

Merger Consideration

1.4(c)

Merger Sub

Preamble

Multiemployer Plan

3.11(f)

Multiple Employer Plan

3.11(f)

Nasdaq

1.4(g)

Non-Election Shares

1.4(c)(iii)

Nonqualified Deferred Compensation Plan

3.11(d)

Notice Period

6.7(d)(ii)

OCC

3.4

Ohio Secretary of State

1.2

Owned Intellectual Property

3.20(e)(iv)

Owned Properties

4.15

PAETL

1.1(a)

Pennsylvania Department

1.2

Permitted Encumbrances

4.15

Person

3.16(a)

Plan Termination Date

6.5(e)

A-v

Index of Defined Terms

(Continued)

Section

Premium Cap

6.6(b)

Previously Disclosed

9.12

Proxy Statement

3.4

Purchaser

Preamble

Purchaser Bank

1.8

Purchaser Capitalization Date

4.2

Purchaser Common Shares

1.4(c)(ii)

Purchaser Disclosure Schedule

9.12

Purchaser Eligible Plans

6.5(a)

Purchaser Ratio

8.1(h)(ii)

Purchaser SEC Reports

4.5(b)

Purchaser Stock Plans

4.2

Qualified Plans

3.11(e)

Real Property

4.15

Regulatory Agencies

3.5

Regulatory Agreement

3.15(b)

Regulatory Approvals

3.4

Representative

6.7(a)

Requisite Regulatory Approvals

7.1(e)

SEC

3.4

Securities Act

3.2(b)

Shortfall Number

1.4(f)(ii)(2)

SRO

3.4

Starting Date

8.1(h)(ii)

Starting Price

8.1(h)(ii)

Statement of Merger

1.2

Stock Consideration

  1.4(b)1.4(c)(ii)

Stock Conversion Number

  1.4(g)1.4(f)(i)

Stock Election

  1.4(b)1.4(c)(ii)

Stock Election Number

  1.4(g)1.4(f)(ii)(1)

Stock Election Shares

  1.4(b)1.4(c)(ii)

Stock Proportion Number

1.4(g)(i)

Subsidiary

  3.1(c)

Superior Proposal

  6.7(g)(i)

Surviving Company

  Recitals

Takeover Laws

  3.103.9(a)

Tax

  3.18

Tax Return

  3.18

Termination Fee

  8.3(b)

Trade Secrets

  3.21(e)(ii)3.20(e)(i)

TrademarksTransmittal Deadline

  3.20(e)(i)2.3(h)

Trust Account Shares

  1.4(a)
1.4(a)

Voting Agreement

  6.13

Voting Debt

  3.2(a)
3.2(a)

Willful Breach

  8.2

 

B - viA-vi

THIS AGREEMENT AND PLAN OF MERGER, dated as of March 13, 201723, 2022 (this “Agreement”), is made by and among Monitor Bancorp, Inc.Emclaire Financial Corp., an Ohioa Pennsylvania corporation (“Company”), Farmers National Banc Corp., an Ohio corporation (“Purchaser”), and FMNB Merger Subsidiary II,V, LLC, an Ohio limited liability company and wholly-owned subsidiary of Purchaser (“Merger Sub”).

RECITALS

A.    The Boards of Directors of Company and Purchaser have determined that it is in the best interests of their respective companies and their shareholders to consummate the strategic business combination transaction provided for in this Agreement in which Company will, on the terms and subject to the conditions set forth in this Agreement, merge with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger (sometimes referred to herein in such capacity as the “Surviving Company”).

B.    The parties intend for the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and intend for this Agreement to constitute a “plan of reorganization” within the meaning of Treasury Regulations Section1.368-2(g) for purposes of Sections 354 and 361 of the Code.

C.    The parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, the parties agree as follows:

ARTICLE I

THE MERGER

1.1The Merger.

(a)    Subject to the terms and conditions of this Agreement, in accordance with the Ohio General Corporation LawRevised Limited Liability Company Act (the “OGCLLLC Act”) and the Pennsylvania Entity Transactions Law (“PAETL”), at the Effective Time, Company shall merge with and into Merger Sub. Merger Sub shall be the Surviving Company in the Merger and shall continue its existence under the laws of the State of Ohio. As of the Effective Time, the separate corporate existence of Company shall cease.

(b)    Purchaser may at any time prior to the Effective Time change the method of effecting the combination of Company and Purchaser, including by providing for the merger of Company with and into Purchaser;provided,however, that no such change shall (i) alter or change the amount or kind of the Merger Consideration provided for in this Agreement, (ii) adversely affect the tax consequences of the Merger to shareholders of Company or the tax treatment of either party pursuant to this Agreement, (iii) materially impede or delay the receipt of the Requisite Regulatory Approvals or other consents and approvals required for consummation of the Merger or otherwise materially delay or impede consummation of the transactions contemplated by this Agreement, (iv) require Company to mail a revised Proxy Statement if such change is made prior to obtaining the Company Shareholder Approval, or require further approval of Company’s shareholders if such change is made after obtaining the Company Shareholder Approval;Approval, or (v) cause any of Company’s representations and warranties contained in Article III to be deemed inaccurate or breached by reason of such change of method.

1.2Effective Time. Subject to the terms and conditions of this Agreement, on the Closing Date, Purchaser shall cause to be filed a statement of merger (the “Statement of Merger”), as provided under the PAETL with the Department of State of the Commonwealth of Pennsylvania (the “Pennsylvania Department”), and a certificate of

merger (the “Certificate of Merger”), as provided under the LLC Act, with the Ohio Secretary of State (the “Ohio Secretary of State”). The Merger shall become effective as of the date and time specified in the certificateStatement of merger (the “Merger and the Certificate of Merger”) filed with or at such other date and time as shall be provided by applicable law (such date and time, the Ohio Secretary of State. The term “Effective Time” shall be the date and time when the Merger becomes effective as set forth in the Certificate of Merger.).

1.3Effects of the Merger. At and after the Effective Time, the Merger shall have the effects set forth in Sections 1701.82 and 1705.39Section 1706.713 of the OGCL.

LLC Act and Section 336 of the PAETL.

B - 1

1.4Conversion ofShares. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, Merger Sub, Company or the holder of any of the following securities:

(a)    All common shares, without$1.25 par value, of Company (the “(“Company Common Shares”), issued and outstanding immediately prior to the Effective Time that are owned directly by (i) Company (other than (x) Company Common Shares held in trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity, that are beneficially owned (within the meaning of Rule13d-3 of the Securities Exchange Act)Act of 1934, as amended (the “Exchange Act”)) by third parties (any such shares, “Trust Account Shares”), and other than(y) Company Common Shares held, directly or indirectly, by Company in respect of a debt previously contracted (any such shares “DPC Shares”)), or (ii) Purchaser or any of its affiliates, shall be cancelled and shall cease to exist, and no Merger Consideration and/or cash in lieu of fractional shares shall be delivered in exchange therefor.

(b)    All shares of Series C, Non-Cumulative Preferred Stock and Series D Non-Cumulative Preferred Stock of Company (collectively, “Company Preferred Shares”) issued and outstanding immediately prior to the Effective Time shall be redeemed by Company and no Merger Consideration and/or cash in lieu of fractional shares shall be delivered in exchange therefor.

(c)    Subject to Sections 1.4(c)1.4(a), (d), (e), (f), and (f)(g), each Company Common Share, but excluding Company Common Shares owned directly by Company or Purchaser (other than Trust Account Shares orand DPC Shares) and Dissenting Shares,or Purchaser, shall be converted, in the case of the Company Common Shares, at the election of the holder thereof in accordance with the procedures set forth in Article II, into the right to receive the following, (thewithout interest (collectively, the “Merger Consideration”), without interest::

(i)    forFor each Company Common Share with respect to which an electionElection to receive cash has been effectively made and not revoked or lost pursuant to Section 2.3 or 2.4 (a “Cash Election”), cash$40.00 in an amount equal to the Cash Value per Company Share (as hereinafter defined)cash (the “Cash Consideration”) (such shares collectively, “Cash Election Shares”); or

(ii)    forFor each Company Common Share with respect to which an electionElection to receive stock has been effectively made and not revoked or lost pursuant to Section 2.3 (aor 2.4(a “Stock Election”), such number of2.15 (the “Exchange Ratio”) common shares, without par value, of Purchaser (the “Purchaser“Purchaser Common Shares”Shares”)determined by multiplying by the Final Exchange Ratio (as hereinafter defined) (the “Stock Consideration”) (such shares collectively, “Stock Election Shares”); or

(iii)    for each Company Common Share other than shares as to which a Cash Election or a Stock Election has been effectively made and not revoked or lost pursuant to Section 2.3 or 2.4 (collectively, the “Non-Election Shares”), the right to receive from Purchaser such Cash Consideration or Stock Consideration as is determined in accordance with Section 1.4(g)1.4(f).

(c) Not later than April 30, 2017, Company shall deliver to Purchaser a schedule setting forth Company’s Adjusted Shareholders’ Equity (as hereinafter defined) at March 31, 2017 (the “Initial Merger Consideration Schedule”). The Initial Merger Consideration Schedule will be certified by Company’s President, and the information contained therein will be consistent with the information provided by Company in any of its regulatory filings. The Initial Merger Consideration Schedule will be substantially in the form set forth in Exhibit “B” attached hereto, and will include (i) the “Maximum Value” (determined by multiplying the Adjusted Shareholders’ Equity by 1.25, (ii) the “Minimum Value” (determined by multiplying the Adjusted Shareholders’ Equity by 1.15, (iii) the “Cash Value per Company Share” (determined by dividing the Maximum Value by 10,000, rounded to four decimal places), and (iv) the “Initial Exchange Ratio” (determined by dividing the Cash Value per Company Share by $13.3055, the twenty (20) trading day volume weighted average closing price of a Purchaser Common Share ending on February 10, 2017 (“Initial VWAP”), rounded to four decimal places). For purposes of this Agreement: “Adjusted Shareholders’ Equity” means the Company’s consolidated shareholders’ equity prepared in accordance with GAAP (as hereinafter defined) as of March 31, 2017, plus the product of (x) the gross proceeds to be received by Company in connection with the MWG Disposition, and (y) a tax adjustment factor of 0.65; and the “MWG Disposition” means the sale by Company of the entirety of its ownership interests in Lifetime Financial Advisors LLC, d.b.a. Monitor Wealth Group pursuant to Section 7.2(e). For the sake of clarity, “Monitor Wealth Group” is the registered trade name of Lifetime Financial Advisors, LLC, and Lifetime Financial Advisors, LLC, and its assignees, shall not be permitted to continue in business under such name following the MWG Disposition.

B - 2

(d) On the day before the Closing Date, the parties will prepare an updated Merger Consideration Schedule substantially in the form set forth in Exhibit “C” attached hereto (the “Final Merger Consideration Schedule”) to ensure that the aggregate Merger Consideration does not exceed the Maximum Value and is not less than the Minimum Value based on the Final VWAP as determined by the following formula: (i) Initial Exchange Ratio x 8,500 x Final VWAP, plus (ii) Cash Value per Company Share x 1,500. If the aggregate Merger Consideration as so determined is either (i) not less than the Minimum Value, or (ii) not more than the Maximum Value, there will no adjustment to the Initial Exchange Ratio and the Initial Exchange Ratio will be considered the Final Exchange Ratio (as hereinafter defined). If the aggregate Merger Consideration is less than the Minimum Value, the Initial Exchange Ratio will be adjusted upward to the extent necessary for the aggregate Merger Consideration to equal the Minimum Value; if the aggregate Merger Consideration is greater than the Maximum Value, the Initial Exchange Ratio will be adjusted downward to the extent necessary for the Merger Consideration to equal the Maximum Value (in either event, the “Final Exchange Ratio”). For purposes of this Agreement, “Final VWAP” means the twenty (20) trading day volume weighted average closing price of a Purchaser Common Share ending on the penultimate trading day preceding the Closing Date, rounded to four decimal places.

(e)    All of the Company Common Shares converted into the right to receive the Merger Consideration pursuant to this Article I shall no longer be outstanding and shall automatically be cancelled and shall cease to exist as of the Effective Time, and each certificate previously representing any such Company Common Share (each, a “Certificate”) and eachnon-certificated Company Common Share represented by book-entry (“(a “Book-Entry SharesShare”) shall thereafter represent only the right to receive the Merger Consideration and/or cash in lieu of fractional shares into which the Company Common Shares represented by such Certificate have been converted pursuant to this Section 1.4 and Section 2.3(m)2.3(h), as well as any dividends to which holders of Company Common Shares become entitled in accordance with Section 2.3(j).

(f)

(e)    If, between the date of this Agreement and the Effective Time, the outstanding Purchaser Common Shares or Company Common Shares shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, an appropriate and proportionate adjustment shall be made to the Exchange Ratio and the Cash Consideration, as applicable.

(g)(f)    

(i)    Notwithstanding any other provision contained in this Agreement, the total number of Company Common Shares to be converted into Stock Consideration pursuant to Section 1.4(b)1.4(c) (the “Stock Conversion Number”) shall be equal to the product obtained by multiplying (x) the number of Company Common Shares outstanding immediately prior to the Effective Time by (y) 0.85 (the “Stock Proportion Number”). All of the other Company(including Common Shares (exceptreceived or to be received for vested, fully earned Company Restricted Shares and excluding Company Common Shares owned directly by Company or Purchaser (other than Trust Account Shares and DPC Shares) and Dissentingor Purchaser), by (y) .70. All of the other Company Common Shares (excluding Company Common Shares owned directly by Company (other than Trust Account Shares or DPC Shares) or Purchaser) shall be converted into Cash Consideration.

(ii)    Within five business days after the Closing Date, Purchaser shall cause the Exchange Agent to effect the allocation among holders of Company Common Shares of rights to receive the Cash Consideration and the Stock Consideration as follows:

(1)(1)    If the aggregate number of Company Common Shares with respect to which Stock Elections shall have been made (the “Stock Election Number”) exceeds the Stock Conversion Number, then all Cash Election Shares and allNon-Election Shares of each holder thereof shall be converted into the right to receive the Cash Consideration, and Stock Election Shares of each holder thereof will be converted into the right to receive the Stock Consideration in respect of that number of Stock Election Shares equal to the product obtained by multiplying (x) the number of Stock Election Shares held by such holder by (y) a fraction, the numerator of which is the Stock Conversion Number and the denominator of which is the Stock Election Number, with the remaining number of such holder’s Stock Election Shares being converted into the right to receive the Cash Consideration; and

(2)    If the Stock Election Number is less than the Stock Conversion Number (the amount by which the Stock Conversion Number exceeds the Stock Election Number being referred to herein as the “Shortfall Number”), then all Stock Election Shares shall be converted into the right to receive the Stock Consideration and the Non-Election Shares and Cash Election Shares shall be treated in the following manner:

B - 3

(2)If the Stock Election Number is less than the Stock Conversion Number (the amount by which the Stock Conversion Number exceeds the Stock Election Number being referred to herein as the “Shortfall Number”), then all Stock Election Shares shall be converted into the right to receive the Stock Consideration and theNon-Election Shares and Cash Election Shares shall be treated in the following manner:

(A)    If the Shortfall Number is less than or equal to the number ofNon-Election Shares, then all Cash Election Shares shall be converted into the right to receive the Cash Consideration and theNon-Election Shares of each holder thereof shall convert into the right to receive the Stock Consideration in respect of that number ofNon-Election Shares equal to the product obtained by multiplying (x) the number ofNon-Election Shares held by such holder by (y) a fraction, the numerator of which is the Shortfall Number and the denominator of which is the total number ofNon-Election Shares, with the remaining number of such holder’sNon-Election Shares being converted into the right to receive the Cash Consideration; or

(B)    If the Shortfall Number exceeds the number ofNon-Election Shares, then allNon-Election Shares shall be converted into the right to receive the Stock Consideration and

Cash Election Shares of each holder thereof shall convert into the right to receive the Stock Consideration in respect of that number of Cash Election Shares equal to the product obtained by multiplying (x) the number of Cash Election Shares held by such holder by (y) a fraction, the numerator of which is the amount by which (1) the Shortfall Number exceeds (2) the total number ofNon-Election Shares and the denominator of which is the total number of Cash Election Shares, with the remaining number of such holder’s Cash Election Shares being converted into the right to receive the Cash Consideration.

(g)    Notwithstanding anything to the contrary contained in this Agreement, no fractional Purchaser Common Shares shall be issued upon the surrender of Certificates for exchange, no dividend or distribution with respect to Purchaser Common Shares shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Purchaser. In lieu of the issuance of any such fractional share, Purchaser shall pay to each former shareholder of Company who otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average, rounded to the nearest one tenth of a cent, of the closing sale prices of Purchaser Common Shares on The NASDAQ Stock Market (the “Nasdaq”) (as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source reasonably selected by Purchaser) for the five consecutive full trading days ending on the day preceding the Closing Date by (ii) the fraction of a share (after taking into account all Company Common Shares held by such holder at the Effective Time and rounded to the nearest thousandth when expressed in decimal form) of Purchaser Common Shares to which such holder would otherwise be entitled to receive pursuant to Section 1.4.

1.5Restricted Stock and Stock Options.

(a)    Immediately preceding the Effective Time, all outstanding plan share awards pursuant to a plan share award agreement granted prior to the date hereof (each, a “Company Restricted Share”) in accordance with Company’s 2014 Stock Incentive Plan or Company’s 2021 Stock Incentive Plan (collectively, the “Company Stock Plans” and each, a “Company Stock Plan”) shall be fully earned and vested and the holder thereof shall be entitled to receive the Merger Consideration in accordance with Section 1.4(c) for each Company Common Share delivered with respect to such vested Company Restricted Share, net of any shares redeemed as payment for withholding taxes as permitted under Section 5.2(b). All such Company Restricted Shares which become fully earned immediately prior to the Effective Time in accordance with the terms hereof shall be issued as Book-Entry Shares, net of any shares withheld as permitted by Section 5.2(b), and each such share to be considered an issued and outstanding Company Common Share as of the Effective Time.

(b)    As of the date hereof there are no outstanding and unexercised employee or director options to purchase Company Common Shares.

1.6    Articles of Organization and Operating Agreement of the Surviving Company. The articles of organization and operating agreement of the Surviving Company shall be the articles of organization and operating agreement of Merger Sub as in effect immediately prior to the Effective Time, until duly amended in accordance with the terms thereof and applicable Law.

1.61.7    Managers and Officers. The managers of Merger Sub immediately prior to the Effective Time shall be the managers of the Surviving Company and shall hold office until their respective successors are duly appointed, or their earlier death, resignation or removal. The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Company and shall hold office until their respective successors are duly appointed and qualified, or their earlier death, resignation or removal.

1.71.8    The Bank Merger. As soon as practicable after the execution of this Agreement, Company and Purchaser shall cause The MonitorFarmers National Bank (the “of Emlenton (“Company Bank”) and The Farmers National Bank of Canfield (“Purchaser Bank”), respectively, to enter into a bank merger agreement, the form of which is

attached to this Agreement as Exhibit “A”A (the “Bank Merger Agreement”), and which provides for the merger of Company Bank with and into Purchaser Bank (the “Bank Merger”), in accordance with applicable Laws and the terms of the Bank Merger Agreement and as soon as practicable after consummation of the Merger. Purchaser Bank will be the surviving entity in the Bank Merger and, following the Bank Merger, the separate corporate existence of Company Bank will cease. Prior to the Effective Time, Company will cause Company Bank, and Purchaser will cause Purchaser Bank, to execute such certificates or articles of merger and such other documents and certificates as are necessary to effectuate the Bank Merger. The Bank Merger Agreement provides that the directors of Purchaser Bank (“Purchaser Bank Board”) immediately prior to the Bank Merger shall beremain the directors of Purchaser Bank upon consummation of the Bank Merger.

1.81.9    Effect on Purchaser Common Shares. Each Purchaser Common Share issued and outstanding immediately prior to the Effective Time will remain outstanding.issued and outstanding and shall be unchanged by the Merger.

B - 4

ARTICLE II

DELIVERY OF MERGER CONSIDERATION

2.1Exchange Agent. Prior to the Effective Time, Purchaser shall appoint Computershare Investor ServicesInc. and its wholly owned subsidiary Computershare Trust Company, N.A. pursuant to an agreement (the “Exchange Agent Agreement”) to act as exchange agent (the “Exchange Agent””) hereunder.

2.2Delivery of Merger Consideration. At or prior to the Effective Time, Purchaser and Merger Sub shall (a) authorize the Exchange Agent to deliver an aggregate number of Purchaser Common Shares equal to the aggregate MergerStock Consideration payable in Purchaser Common Shares to holders of Company Common Shares pursuant to Section 1.4(c)(ii), and (b) deposit, or cause to be deposited with, the Exchange Agent an amount in cash equal to (i) the aggregate Cash Consideration payable to holders of Company Common Shares pursuant to Section 1.4(c)(i) and (ii) to the extent then determinable, any cash payable to holders of Company Common Shares in lieu of fractional shares pursuant to Section 2.3(m)1.4(g) (the amounts described in this clause (b), collectively, the “Exchange Fund”). The Exchange Fund will be held in trust for the holders of Company Common Shares until distributed to such holders pursuant to this Agreement.

2.3Election and Exchange Procedures.

Each Subject to Section 2.4, each holder of record of Company Common Shares (other than Company Common Shares owned directly by Company or Purchaser (other than Trust Account Shares orand DPC Shares) and Dissenting Shares)or Purchaser), whose Company Common Shares were converted into the right to receive the Merger Consideration pursuant to Section 1.4 at the Effective Time and any cash in lieu of fractional Purchaser Common Shares (“(each, a “Holder”) shall have the right, subject to the limitations set forth in this Article II, to submit an electionexchange those Company Common Shares for Merger Consideration in accordance with the following procedures:

(a)    Each Holder may specify in a request made in accordance with the provisions of this Section 2.3 (an “Election”) (x)(i) the number of whole Company Common Shares owned by such Holder with respect to which such Holder desires to make a Stock Election, and (y)(ii) the number of whole Company Common Shares owned by such Holder with respect to which such Holder desires to make a Cash Election.

(b) Purchaser shall prepare a form reasonably acceptable to Company (the “Form of Election”) which shall be mailed to Company’s shareholders entitled to vote at the Company Shareholders’ Meeting so as to permit Company’s shareholders to exercise their right to make an Election prior to the Election Deadline.

(b)    Purchaser shall prepare a letter of transmittal in such form as is reasonably acceptable to Company and as shall be prescribed by the Exchange Agent Agreement (the “Letter of Transmittal”), which shall accompany the Form of Election and specify that delivery shall be effected, and risk of loss and title to Certificate(s) or evidence of Book-Entry Shares shall pass, only upon delivery of Certificate(s) or evidence of

Book-Entry Shares (or affidavits of loss in lieu of such Certificates) to the Exchange Agent, and which shall be mailed to Company’s shareholders entitled to vote at the Company Shareholders’ Meeting so as to permit Company’s shareholders to exchange their Company Common Shares for the Merger Consideration.

(c)    Purchaser shall make the Form of Election initiallyand Letter of Transmittal available to Company shareholders at the time that the Proxy Statement is made available to the shareholders of Company to such shareholders and shall use all reasonable efforts to make available as promptly as possible a Form of Election and Letter of Transmittal to any shareholder of Company who requests such Form of Election following the initial mailing of the Forms of Election and Letters of Transmittal and prior to the Election Deadline.Effective Time. In no event shall the FormForms of Election and Letters of Transmittal be made available less than twenty (20)20 days prior to the Election Deadline.Company Shareholders’ Meeting.

(d)    Any Election shall have been made properly only if the Exchange Agent shall have received, by 5:00 p.m. local time in the city in which the principal office of such Exchange Agent is located, on the date of the Election Deadline, a Form of Election and Letter of Transmittal properly completed and signed and accompanied by Certificates (or affidavits of loss in lieu of such Certificates) or evidence of Book-Entry Shares to which such Form of Election relates or by an appropriate customary guarantee of delivery of such Certificates or evidence of Book-Entry Shares, as set forth in such Form of Election and Letter of Transmittal, from a member of any registered national securities exchange or a commercial bank or trust company in the United States; provided, that such Certificates or evidence of Book-Entry Shares are in fact delivered to the Exchange Agent by the time required in such guarantee of delivery. Failure to deliver Company Common Shares covered by such a guarantee of delivery within the time set forth on such guarantee shall be deemed to invalidate any otherwise properly made Election, unless otherwise determined by Purchaser, in its sole discretion. As used herein, “Election Deadline” means the later of (i) 5:00 p.m. on the date that is the day prior to the date of Company Shareholders’ Meeting, and (ii) a date as may be extendedmutually agreed to by agreement of the Company and Purchaser.Purchaser occurring no later than five business days prior to the Closing Date. Company and Purchaser shall cooperate to issue a press release reasonably satisfactory to each of them announcing the date of the Election Deadline not more than fifteen (15)15 business days before and at least five (5) business days prior to the Election Deadline.

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(e)    Any Company shareholder may, at any time prior to the Election Deadline, change or revoke his or her Election by written notice received by the Exchange Agent prior to the Election Deadline, accompanied by a properly completed and signed, revised Form of Election. If Purchaser shall determine in its reasonable discretion that any Election is not properly made with respect to any Company Common Shares, such Election shall be deemed to be not in effect, and the Company Common Shares covered by such Election shall, for purposes hereof, be deemed to beNon-Election Shares, unless a proper Election is thereafter timely made.

(f)    Any Company shareholder may, at any time prior to the Election Deadline, revoke his or her Election by written notice received by the Exchange Agent prior to the Election Deadline, or by withdrawal prior to the Election Deadline of his or her Certificates or evidence of Book-Entry Shares, or of the guarantee of delivery of such Certificates, previously deposited with the Exchange Agent. All Elections shall be revoked automatically, and the Certificates returned to the applicable shareholders, if the Exchange Agent is notified in writing by Purchaser or Company that this Agreement has been terminated in accordance with Article VIII.

(g)    Purchaser, in the exercise of its reasonable discretion, shall have the right to make all determinations, not inconsistentconsistent with the terms of this Agreement, governing (i) the validity of the FormsLetters of ElectionTransmittal and compliance by any Holder with the Election procedures set forth therein and herein, (ii) the manner and extent to which Elections are to be taken into account in making the determinations prescribed by Section 2.3, (iii) the issuance and delivery of certificates representing Stock Consideration into whichfor Company Common Shares areconverted in the Merger, (iii) the method of payment of the Cash Consideration for Company Common Shares converted in the Merger, and (iv) the method of payment of cash for Company Common Shares converted into the right to receive the Cash Consideration and cash in lieu of fractional Purchaser Common Shares where the holderHolder of the applicable Certificate has no right to receive whole Purchaser Common Shares.

(h)    As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to eachA Holder who theretofore has not submitted such Holder’s Certificates or evidence of Book-Entry Shares (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificate(s) or evidence of Book-Entry Shares shall pass, only upon delivery of Certificate(s) or evidence of Book-Entry Shares (or affidavits of loss in lieu of such Certificates)returned to the Exchange Agent and shall be substantially in such form and have such other provisions as shall be prescribed by the Exchange Agent Agreement (the “Letter of Transmittal”)) and (ii) instructions for use in surrendering Certificate(s) or evidence of Book-Entry Shares in exchange for the Merger Consideration, any cash in lieu of fractional shares of Purchaser Common Shares to be issued or paid in consideration therefor and any dividends or distributions to which such holder is entitled pursuant to Section 2.3(j).

(i) Upon surrenderprior to the Exchange Agent of its Certificate(s) or Book-Entry Shares, accompanied byEffective Time a properly completed Letter of Transmittal, a holder of Company Commonaccompanied by the Holder’s Certificate(s) or Book-Entry Shares, will be entitled to receive, promptlyas soon as practicable after the Effective Time, the Merger Consideration, determined as

provided in Section 1.4. Until so surrendered, each such Certificate or Book-Entry Shares shall represent after the Effective Time, for all purposes, only the right to receive, without interest, the applicable Merger Consideration and any cash in lieu of fractional Purchaser Common Shares to be issued or paid in consideration therefor upon surrender of such Certificate or Book-Entry Shares in accordance with, and any dividends or distributions to which such holder is entitled pursuant to, this Article II.

(i)    Within five (5) business days after the Effective Time, the Exchange Agent shall mail to each Holder who theretofore has not submitted such Holder’s Certificates or evidence of Book-Entry Shares (i) a Letter of Transmittal, and (ii) instructions for use in surrendering Certificate(s) or evidence of Book-Entry Shares in exchange for the Merger Consideration, any cash in lieu of fractional shares of Purchaser Common Shares to be issued or paid in consideration therefor, and any dividends or distributions to which such Holder is entitled pursuant to Section 2.3(j). Holders who surrender to the Exchange Agent Certificate(s) or Book- Entry Shares, accompanied by properly completed Letters of Transmittal, after the Effective Time will receive the Merger Consideration, determined as provided in Section 1.4, as promptly as practicable after such receipt by the Exchange Agent.

(j)    No dividends or other distributions with respect to Purchaser Common Shares shall be paid to the holder of any unsurrendered Certificate or Book-Entry Shares with respect to the Purchaser Common Shares represented thereby, in each case unless and until the surrender of such Certificate or Book-Entry Shares occurs in accordance with this Article II. Subject to the effect of applicable abandoned property, escheat or similar Laws, following surrender of any such Certificate or Book-Entry Shares in accordance with this Article II, the record holder thereof shall be entitled to receive, without interest, (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore payable with respect to the whole number of Purchaser Common Shares represented by such Certificate or Book-Entry Shares and paid prior to such surrender date, and/or (ii) at the appropriate payment date, the amount of dividends or other distributions payable with respect to the whole

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number of Purchaser Common Shares represented by such Certificate or Book-Entry Shares with a record date after the Effective Time (but before such surrender date) and with a payment date subsequent to the issuance of the Purchaser Common Shares issuable with respect to such Certificate or Book-Entry Shares.

(k)    In the event of a transfer of ownership of a Certificate or Book-Entry Shares representing Company Common Shares that is not registered in the stock transfer records of Company, the Merger Consideration (including cash in lieu of fractional Purchaser Common Shares) shall be issued or paid in exchange therefor to a Person other than the Person in whose name the Certificate or Book-Entry Shares so surrendered is registered if the Certificate or Book-Entry Shares formerly representing such Company Common Shares shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such payment or issuance shall pay any transfer or other similar taxesTaxes required by reason of the payment or issuance to a Person other than the registered holder of the Certificate or Book-Entry Shares, or establish to the reasonable satisfaction of Purchaser that the taxTax has been paid or is not applicable. The Exchange Agent (or, subsequent to the earlier of (x) theone-year anniversary of the Effective Time and (y) the expiration or termination of the Exchange Agent Agreement, Purchaser) shall be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement to any holder of Company Common Shares such amounts as the Exchange Agent or Purchaser, as the case may be, is required to deduct and withhold under the Code, or any provision of state, local or foreign taxTax Law, with respect to the making of such payment. To the extent the amounts are so withheld by the Exchange Agent or Purchaser, as the case may be, and paid over to the appropriate Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Company Common Shares in respect of whom such deduction and withholding was made by the Exchange Agent or Purchaser, as the case may be.

(l)    After the Effective Time, there shall be no transfers on the share transfer books of Company of the Company Common Shares that were issued and outstanding immediately prior to the Effective Time other than to settle transfers of Company Common Shares that occurred prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares representing such sharesCompany Common Shares are presented for transfer

to the Exchange Agent, they shall be cancelled and exchanged for the applicable Merger Consideration and any cash in lieu of fractional Purchaser Common Shares to be issued or paid in consideration therefor in accordance with the procedures set forth in this Article II.

(m)    Notwithstanding anything to the contrary contained in this Agreement, no fractional Purchaser Common Shares shall be issued upon the surrender of Certificates for exchange, no dividend or distribution with respect to Purchaser Common Shares shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Purchaser. In lieu of the issuance of any such fractional share, Purchaser shall pay to each former shareholder of Company who otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the volume-weighted average, rounded to the nearest one tenth of a cent, of the closing sale prices of Purchaser Common Shares based on information reported by the Nasdaq (as reported byThe Wall Street Journal or, if not reported thereby, any other authoritative source reasonably selected by Purchaser) for the five (5) trading days ending on the penultimate trading day preceding the Effective Time (the “Purchaser Closing Price”)by (ii) the fraction of a share (after taking into account all Company Common Shares held by such holder at the Effective Time and rounded to the nearest thousandth when expressed in decimal form) of Purchaser Common Shares to which such holder would otherwise be entitled to receive pursuant to Section 1.4.

(n) Any portion of the Exchange Fund that remains unclaimed by the shareholders of CompanyHolders as of the one yearone-year anniversary of the Effective Time may be paid to Purchaser. In such event, any former shareholders of CompanyHolder who havehas not theretofore complied with this Article II shall thereafter look only to Purchaser with respect to the Merger Consideration, any cash in lieu of any fractional shares, and any unpaid dividends and distributions on the Purchaser Common Shares deliverable in respect of each Company Common Share held by such shareholder holdsHolder as determined pursuant to this Agreement, in each case, without any interest thereon.

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Notwithstanding the foregoing, none of Purchaser, the Surviving Company, the Exchange Agent or any other Person shall be liable to any former holder of Company Common Shares for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar Laws.

(o)(n)    In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and the posting by such Person of a bond in such amount as the Exchange Agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate (provided, that such bond requirement may be waived by Purchaser if substituted with an unqualified indemnity from any Company shareholder owning five or fewer Company Common Shares), the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the applicable Merger Consideration deliverable in respect thereof in accordance with the terms of this Agreement, andincluding requirements of this Article II.

(p) Anything contained in this Agreement or elsewhere to the contrary notwithstanding, if any holder of2.4    Company Restricted Share Election and Exchange Procedures. Holders who receive Company Common Shares dissents fromimmediately preceding the Merger pursuantEffective Time with respect to and properly follows such other procedures as may be required by,Company Restricted Shares in accordance with Section 1701.85 of the OGCL and is thereby entitled to appraisal rights thereunder (a “Dissenting Shareholder”), then any Company Common Shares held by such Dissenting Shareholder (“Dissenting Shares”)1.5 shall be extinguished but shall not be converted intohave the right to receive Merger Consideration. Instead, such Dissenting Shares shall be entitled onlyrequest a Stock Election or a Cash Election with respect to such rights (and shall have such obligations) as are provided in Section 1701.85 of the OGCL. Company shall give Purchaser prompt notice upon receipt by Company of any such demands for payment of the fair value of such Company Common Shares any withdrawals ofon such noticeterms as may be mutually agreed to by the Company, Purchaser and any other instruments providedthe Exchange Agent. Any such elections made pursuant hereto shall be submitted to applicable law. Notwithstanding the above, inExchange Agent prior to the Election Deadline. In the event that a Dissenting Shareholder subsequently withdraws a demand for payment, fails to comply fullyholder of Company Restricted Shares does not timely submit an election request in accordance with this Section 2.4, the requirements of the OGCL, or otherwise fails to establish the right of such shareholder to be paid the value of such holder’s shares under the OGCL, such Dissentingsubject Company Common Shares shall be deemed to be converted into the right to receive, with respect to Company Common Shares the Cash Consideration and/or the Stock Consideration, as determined by Purchaser in its sole discretion. Company shall not, except with the prior written consent of Purchaser, voluntarily make any payment with respect to, or settle or offer to settle, any such demand for payment, or waive any failure to timely deliver a written demand for appraisal or the taking of any other action by such Dissenting Shareholder as may be necessary to perfect appraisal rights under the OGCL. Company shall give Purchaser the opportunity to participate in and direct all negotiations and proceedings with respect to any such demands. Any payments made in respect of Dissenting Shares shall be made by the Surviving Company.Non-Election Shares.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF COMPANY

Except as Previously Disclosed, Company hereby represents and warrants to Purchaser as follows:

3.1Corporate Organization.

(a)    Company is a corporation duly incorporated, validly existing and in good standing under the laws of the StateCommonwealth of Ohio.Pennsylvania. Company has the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company. Company is duly registered as a bankfinancial holding company under the Bank Holding Company Act of 1956, as amended (“BHC Act”).

(b)    True, complete and correct copies of the Amended and Restated Articles of Incorporation of Company (the “Company Articles”) and the [CodeBylaws, as amended, of Regulations of Company as amended] (the “Company CodeBylaws”), as in effect as of the date of this Agreement, have been made available to Purchaser prior to the date hereof.

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(c)    Company has Previously DisclosedBank is a list of all its Subsidiaries. Eachwholly owned Subsidiary of the Company . Other than Company Bank, Company has no Subsidiaries. Company Bank is a national association and (i) is duly organized and validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the requisite corporate (or similar) power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and (iii) except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company, is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary. As used in this Agreement, the term “Subsidiary,” when used with respect to either party, shall mean a corporation, association or other business entity of which the entity in question either (i) owns or controls 50% or more of the outstanding equity securities either directly or through an unbroken chain of entities as to each of which 50% or more of the outstanding equity securities is owned directly or indirectly by its parent (provided, there shall not be included any such entity the equity securities of which are owned or controlled in a fiduciary capacity), (ii) in the case of partnerships, serves as a general partner, (iii) in the case of a limited liability company, serves as a managing member, or (iv) otherwise has the ability to elect a majority of the directors, trustees or managing members thereof. The deposit accounts of each of Company’s Subsidiaries that is an insured depository institutionCompany Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit Insurance Fund to the fullest extent permitted by Law, and all premiums and assessments required to be paid in connection therewith have been paid when due. The articles of incorporation, code of regulationsbylaws and similar governing documents of each Significant Subsidiary (as defined in Rule1-02 of RegulationS-X promulgated under the Exchange Act) of Company Bank, copies of which have been made available to Purchaser, are true, complete and correct copies of such documents as in full force and effect as of the date of this Agreement. Neither Company has also Previously Disclosed a list of all Persons with respect to whichnor Company or its Subsidiaries ownBank owns 5% or more of any class of capital stock or other equity interest in any Person other than equity interests held in a fiduciary capacity, which list shall set forth the amount and form of ownership of Company or its applicable Subsidiary in each such Affiliate.capacity.

3.2Capitalization.

(a)    The authorized capital stock of Company consists of 12,00012,000,000 Company Common Shares and 3,000,000 Company Preferred Shares, of which, as of even date herewith (the “Company Capitalization Date”), 10,000 shares(i) 2,735,212 Company Common Shares were issued and outstanding, (the “Capitalization Date Outstanding Share Count“).and (ii) 420,593 Company Preferred Shares were issued and outstanding. As of the Company Capitalization Date, no shares of Company Common Shares or Company Preferred Shares were reserved for issuance.issuance except for Company Common Shares reserved for issuance pursuant to the Company Stock Plans. As of the Company Capitalization Date, there were unvested plan share awards outstanding for 52,200 Company Restricted Shares, such awards having been previously granted under the Company Stock Plans. All of the issued and outstanding Company Common Shares and Company Preferred Shares have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. As of the date of this Agreement, no bonds, debentures, notes or other indebtedness having the right to vote on any matters on which shareholders of Company may vote (“Voting Debt”) are issued or outstanding. As of the date of this Agreement, other than outstanding plan share awards granted under the Company Stock Plans, Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, rights, commitments or agreements of any character calling for the purchase or issuance of, or the payment of, any amount based on, any Company Common Shares, Company Preferred Shares or Voting Debt or any other equity securities of Company or any securities representing the right to purchase or otherwise receive any Company Common Shares, Company Preferred Shares or Voting Debt or other equity securities of Company, other than the Company Restricted Shares (“Equity Rights”).

(b)    As of the Company Capitalization Date, there are no contractual obligations of Company or any of its SubsidiariesCompany Bank (i) to repurchase, redeem or otherwise acquire any shares of capital stock of Company or any equity security of Company or its SubsidiariesCompany Bank or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of Company or its SubsidiariesCompany Bank or (ii) to register Company Common Shares or other securities under the Securities Act of 1933, as amended (the “Securities Act”). AsSection 3.2(b) of the Company Disclosure Schedule sets forth a true and complete list of all unvested plan share awards awarded under the Company Stock Plans as of the Company Capitalization Date therespecifying, on a participant-by-participant basis, (i) the name of each participant, (ii) the number of Company Common Shares

subject to each plan share award awarded to each participant, (iii) the effective date of each plan share award, and (iv) the vesting schedule, if any, for each such plan share award. There are no Company stock options outstanding. Thereoutstanding as of the Company Capitalization Date. Other than the Voting Agreements, to the Company’s Knowledge, there are no voting trusts, shareholder agreements, proxies or other agreements in effect that are binding on Company or with respect to which Company has Knowledge with respect to the voting or transfer of any Company Common Shares, or Voting Debt,Company Preferred Shares, other equity securities of Company or Equity Rights.

(c)    There are no equity-basedOther than unvested plan share awards outstanding. Sinceawarded under the Company Stock Plans as of the Company Capitalization Date as set forth on Section 3.2(b) of the Company Disclosure Schedule, no other equity-based awards or instruments are outstanding. Since December 31, 2021 through the date hereof, Company has not (i) issued or repurchased any Company Common Shares or Voting Debt or other equity

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securities of Company or Equity Rights, or (ii) issued or awarded any options, stock appreciation rights, restricted shares, restricted stock units, deferred equity units, awards based on or related to the value of Company capital stock or any other equity-based awards. Since December 31, 2021 and through the date hereof, Company has not issued any Company Stock Optionsstock options under any Company Stock Plan or otherwise with an exercise price that is less than the “fair market value” of the underlying shares on the date of grant, as determined for financial accounting purposes under GAAP. With respect to each outstanding unvested plan share award under the Company Stock Plans, (i) the award was made in accordance with the applicable Company Stock Plan and all applicable Laws, and (ii) each such award of was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of Company. Since December 31, 2016,2021, except as specifically permitted or required by this Agreement or as Previously Disclosed, neither Company nor any of its SubsidiariesCompany Bank has (A) accelerated the vesting of or lapsing of restrictions with respect to any stock-based compensation awards or long-term incentive compensation awards, (B) with respect to executive officers of Company or its Subsidiaries,Company Bank, entered into or amended any employment, severance, change of control or similar agreement (including any agreement providing for the reimbursement of excise taxesTaxes under Section 4999 of the Code), or (C) adopted or amended any material Company Benefit Plan.

(d)    All of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of Company Bank are owned by Company, directly or indirectly, free and clear of any liens, pledges, charges, claims and security interests and similar encumbrances (“Liens”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Subsidiary of Company has orBank does not have and is not bound by, any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such SubsidiaryCompany Bank or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary.Company Bank.

3.3Authority; No Violation.

(a)    Company has full corporate power and authority to execute and deliver this Agreement and, subject to the receipt of the Regulatory Approvals and the Company Shareholder Approval, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly adopted and approved by the Board of Directors of Company by a vote of at least a majority of the members of the Board of Directors of Company by a unanimous vote of a quorum of members participating in such vote.office. The Board of Directors of Company has determined that the Merger, on the terms and conditions set forth in this Agreement, is in the best interests of Company and its shareholders and has directed that this Agreement and the transactions contemplated hereby be submitted to Company’s shareholders for approval at a duly held Company Shareholders’ Meeting and has adopted a resolution to the foregoing effect. Except for the approval of this Agreement and the transactions contemplated hereby by the affirmative vote of at least a majority of all the votes entitled to be cast by holders of Company Common Shares at the Company Shareholders’ Meeting, no other corporate proceedings on the part of Company are necessary to approve this Agreement, or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Company and (assuming due authorization, execution and delivery by Purchaser and Merger Sub) constitutes the

valid and binding obligations of Company, enforceable against Company in accordance with its terms (except as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar lawsLaws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity (the “Bankruptcy and Equity Exception”)).

(b)    Except as Previously Disclosed, neitherNeither the execution and delivery of this Agreement by Company, nor the consummation by Company of the transactions contemplated hereby, nor compliance by Company with any of the terms or provisions of this Agreement, will (i) violate any provision of the Company Articles or the Company CodeBylaws or (ii) assuming that the consents, approvals and filings referred to in Section 3.4 are duly obtained and/or made, (A) violate any Law, judgment, order, injunction or decree applicable to Company, any of its SubsidiariesCompany Bank or any of their respective properties or assets or (B) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Company or any of its SubsidiariesCompany Bank under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, franchise, permit, agreement,

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by-law or other instrument or obligation to which Company or any of its SubsidiariesCompany Bank is a party or by which any of them or any of their respective properties or assets is bound except, with respect to clause (ii), any such violation, conflict, breach, default, termination, cancellation, acceleration or creation as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company.

3.4Consents and Approvals. Except for (i)(a) filings of applications and notices with, and receipt of consents, authorizations, approvals, exemptions ornon-objections from, the Securities and Exchange Commission (the “SEC”), state securities authorities, applicable securities, commodities and futures exchanges, and other industry self-regulatory organizations (each, an “SRO“”), (ii)(b) the filing of any other required applications, filings or notices with the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the United States Office of the Comptroller of the Currency (the “OCC”), the FDIC, the Pennsylvania Department of Banking and Securities (the “Banking Department”) and any other foreign, federal or state banking agency, other regulatory, self-regulatory or enforcement authorities, or any courts, administrative agencies or commissions or other governmental authorities or instrumentalities (each of the bodies set forth in clauses (i)(a) and (ii)(b), a “Governmental Entity”) and approval of ornon-objection to such applications, filings and notices (taken together with the items listed in clause (i)(a), the “Regulatory Approvals”), (iii)(c) the filing with the SEC of a proxy statement in definitive form relating to the Company Shareholders’ Meetings (theMeeting (including any amendments or supplements thereto, the “Proxy Statement”) and of a registration statement onForm S-4 (or such other applicable form) (the “Form S-4”) in which the Proxy Statement will be included as a prospectus, and declaration of effectiveness of theForm S-4, (iv)(d) the filing of the Statement of Merger with the Pennsylvania Department and the Certificate of Merger with the Ohio Secretary of State, and (v)(e) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of the Purchaser Common Shares pursuant to this Agreement and approval of listing of such Purchaser Common Shares on the Nasdaq, no consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with the consummation by Company of the Merger or the Bank Merger and the other transactions contemplated by this Agreement. No consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with the execution and delivery by Company of this Agreement.

3.5Reports. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Company, Company and each of its Subsidiaries have timely filed all reports, proxy statements and other materials, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 20102017 with (i)(a) the Federal Reserve, (ii)(b) the OCC, (c) the FDIC, (iii)(d) the OCC, (iv)Banking Department, (e) any state banking or other state regulatory authority, (iv)(f) the SEC, (v)(g) any foreign regulatory authority, and (vi)(h) any applicable industry SRO (collectively, “Regulatory Agencies”) and with each other applicable Governmental Entity, and all other reports and statements required to be filed by them since

December 31, 2011,2017, including any report or statement required to be filed pursuant to any applicable Laws, and all such reports, registration statements, proxy statements, other materials and amendments have complied in all material respects with all legal requirements relating thereto, and Company and its SubsidiariesCompany Bank have paid all fees and assessments due and payable in connection therewith.

3.6Financial Statements.

(a)    Company has furnished to Purchaser the unauditedaudited consolidated financial statements of Company, consisting of consolidated balance sheets as of December 31, 2014, 20152020 and 2016,2021, and the related consolidated statements of operations,net income, comprehensive income, changes in shareholders’stockholders’ equity and cash flows for each of the threetwo years ended December 31, 2014, 20152020 and 2016 (collectively, all2021, including the related notes and reports thereon of Crowe LLP and BKD, LLP, such unauditedaudited consolidated financial statements are referred to as the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis (“GAAP”)GAAP during the periods involved (except as may be indicated in the notes thereto and for normalyear-end adjustments) and present fairly, in all material respects, the consolidated financial condition, earningsnet income and cash flows of Company and Company Bank for the periods then ended. As of the date hereof, the books and records of PurchaserCompany and its SubsidiariesCompany Bank have been maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions. As of the date hereof, BKD LLP has not resigned (or informed Company that it intends to resign) or been dismissed as independent public accountants of Company as a result of or in connection with any disagreements with Company on a matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

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(b)    Neither Company nor any of its SubsidiariesCompany Bank has incurred any liability or obligation of any nature whatsoever (whether absolute, accrued, contingent, determined, determinable or otherwise and whether due or to become due), except for (i) those liabilities that are reflected or reserved against on the Financial Statements or disclosed in a footnote thereto, (ii) liabilities incurred in the ordinary course of business consistent in nature and amount with past practice since December 31, 2016,2021, (iii) liabilities which are not material individually or in the aggregate, (iv) in connection with this Agreement and the transactions contemplated hereby, or (v) as Previously Disclosed.

3.7Broker’sBroker’s Fees. Neither Company, nor any of its SubsidiariesCompany Bank nor any of their respective officers, directors, employees or agents has utilized any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or any other transactions contemplated by this Agreement; provided, however, that Company has,Agreement, other than, as described further in Section 3.13, hereinbelow, engaged ProBank Austinto Raymond James & Associates, Inc. pursuant to a letter agreement dated as its financial advisor in connection with the Merger.of October 26, 2021, a true, complete and correct copy of which has been delivered previously to Purchaser.

3.8Absence of Changes. Except as Previously Disclosed, sinceSince December 31, 2016, (i)2021, (a) Company and its SubsidiariesCompany Bank have not undertaken any of the actions prohibited by Section 5.2 had such Section been in effect at all times since such date, (ii)(b) Company and its Subsidiaries have conducted their business only in the ordinary course of business consistent with past practice, and (iii)(c) no event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Company. As used in this Agreement, the term “Material Adverse Effect” means, with respect to any party, a material adverse effect on (i) the financial condition, results of operations or business of such party and its Subsidiaries taken as a whole (provided,however, that, with respect to this clause (i), a “Material Adverse Effect” shall not be deemed to include effects resulting from (A) changes after the date hereof in applicable GAAP or regulatory accounting requirement, or the enforcement, implementation or interpretation thereof, (B) changes after the date hereof in Laws of general applicability to companies in the industries in which such party and its Subsidiaries operate, (C) changes, events, or developments, after the date hereof, in global, national or regional political conditions (including the outbreak or escalation of war (declared or undeclared) or hostilities, any occurrence or threat of acts of terrorism or any armed hostilities associated therewith and any national or international calamity, disaster, or emergency or any escalation thereof) or in general economic or market conditions affecting the financial services industry generally and not specifically relating to such party or its Subsidiaries (including changes in

prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets) affectingor other changes, events or developments, after the date hereof, that affect banks or their holding companies in the industries in which such party and its Subsidiaries operate,generally, (D) failure, in and of itself, to meet earnings projections, but not including any underlying causes thereof, (E) the public disclosure of this Agreement and compliance with this Agreement, (F) any outbreaklegal action asserted or escalationother actions initiated by any holder of hostilities, declaredCompany Common Shares or undeclared actsCompany Preferred Shares or any holder of warPurchaser Common Shares arising out of or terrorism,related to this Agreement, (G) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees,Employees, customers, suppliers, distributors or other having relationships with Company or its SubsidiariesCompany Bank, or (G)(H) actions or omissions taken with the prior written consent of the other party to this Agreement except, with respect to clauses (A), (B), and (C) and (F), to the extent that the effects of such change are disproportionately adverse to the financial condition, results of operations or business of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate), or (ii) the ability of such party to timely consummate the transactions contemplated by this Agreement.

3.9Compliance with Applicable Law.

(a)    Company and each of its Subsidiaries hold, and since December 31, 20122017 have at all times held, all licenses, franchises, permits and authorizations which are necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to applicable Law (and have paid all fees and assessments due and payable in connection therewith), except where the failure to hold such license, franchise, permit or authorization or to pay such fees or assessments has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company, and, to the Company’s Knowledge, of Company, no suspension or cancellation of any such necessary license, franchise, permit or authorization is threatened in writing. Except as Previously Disclosed, Company and each of its Subsidiaries have complied in all material respects with, and are not in default or violation in any material respect of, (i) any applicable Law, including, without limitation, all Laws related to data protection or privacy, the USA PATRIOT Act, the Bank

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Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act and any other Law relating to discriminatory lending, financing or leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, and when and if applicable the Sarbanes Oxley Act, and all Laws relating to broker dealers, investment advisors and insurance brokers, and (ii) any posted or internal privacy policies relating to data protection or privacy, including the protection of personal information, and neither Company nor any of its Subsidiaries has received since December 31, 20122017 written notice of any, and to Company’s Knowledge there are no, material defaults or material violations of any applicable Law. For purposes of this Agreement, “Law” shall mean any federal, state or local law, statute, ordinance, rule, regulation, order, or undertaking to or agreement with any Governmental Entity.

(b)    Company and each of its Subsidiaries has properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable Law, except where the failure to so administer such accounts has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company. None of Company, any of its Subsidiaries, or any director, officer or employee of Company or of any of its Subsidiaries, has committed any breach of trust or fiduciary duty with respect to any such fiduciary account that has had and would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company, and the accountings for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account, except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company, the accountings for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.Company.

3.10State Takeover Laws. The Board of Directors of Company has approved this Agreement and the transactions contemplated hereby by a unanimous vote of a quorum of members of the Board of Directors participating in such vote and as required to render inapplicable to such agreementthis Agreement and such transactions any

applicable provisions of any takeover Laws under the OGCL,applicable Law, including any “moratorium,” “control share,” “takeover,” “affiliated transaction,” “interested stockholder” or similar provisions under the OGCLapplicable Law or the Company Articles (collectively, the “Takeover Laws”). No “fair price” Law is applicable to this Agreement and the transactions contemplated hereby.

3.11Company Benefit Plans.

(a)    Section 3.11(a) of the Company Disclosure Schedule lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), whether or not subject to ERISA, and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all retention, bonus, employment, termination, severance or other contracts or agreements to which Company or any SubsidiaryCompany Bank or any of their respective ERISA Affiliates (as hereinafter defined) is a party, currently maintains, contributes to or sponsors for the benefit of any current or former employee, officer, director or independent contractor of Company or any SubsidiaryCompany Bank or any of their respective ERISA Affiliates or for which Company or any SubsidiaryCompany Bank could otherwise have any current or future material liability or material obligations (all such plans, programs, arrangements, contracts or agreements, whether or not listed inon Section 3.11(a) of the Company Disclosure Schedule, collectively, the “Company Benefit Plans”).

(b)    Company has made available to Purchaser true, correct and complete copies of the following (as applicable): with respect to each Company Benefit Plan: (i) the written document evidencing eachsuch Company Benefit Plan or, with respect to anyif such plan thatCompany Benefit Plan is not in writing, a written description of the material terms thereof, and all amendments, modifications or material supplements to any Company Benefit Plan,thereto, (ii) the annual report (Form 5500), if any, filed with the U.S. Internal Revenue Service (“IRS”) for the last two plan years, (iii) the most recently received IRS determination letter, if any, relating to a Company Benefit Plan, (iv) the most recently prepared actuarial report or financial

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statement, if any, relating to a Company Benefit Plan, (v) the most recent summary plan description, if any for such Company Benefit Plan (or other descriptions of such Company Benefit Plan provided to employees)Employees) and all modifications thereto, (vi) all material correspondence with the Department of Labor or the IRS;IRS, (vii) the most recent nondiscrimination tests performed under ERISA and the Code, (viii) all contracts with third-party administrators, compensation consultants and other service providers that related to a Company Benefit Plan,thereto, and (ix) any related trust agreements, insurance contracts or documents of any other funding arrangements relating to a Company Benefit Plan.thereto. Except as specifically provided in the foregoing documents delivered or made available to Purchaser, there are no amendments to any Company Benefit Plans that have been adopted or approved nor has Company or any of its SubsidiariesCompany Bank undertaken to make any such amendments or to adopt or approve any new Company Benefit Plans. No Company Benefit Plan is maintained outside the jurisdiction of the United States, or covers any employee residing or working outside of the United States.

(c)    Except as Previously Disclosed,set forth on Section 3.11(c) of the Company Disclosure Schedule, (i) each Company Benefit Plan has been established, operated and administered in all material respects in accordance with its terms and the requirements of all applicable Laws, including ERISA and the Code. DuringCode, and (ii) the Company 401(k) Plan (as defined in Section 6.5(e)) complies with all applicable Laws. Except as set forth on Section 3.11(c) of the Company Disclosure Schedule, during the six years preceding the date of this Agreement, neither Company nor any of its Subsidiaries has taken any action to take corrective action or make a filing under any voluntary correction program of the IRS, Department of Labor or any other Governmental Entity with respect to any Company Benefit Plan, and, to Company’s Knowledge, no plan defect exists that would qualify for correction under any such program.

(d)    Except as has been Previously Disclosed,set forth on Section 3.11(d) of the Company Disclosure Schedule, each Company Benefit Plan that is a “nonqualified deferred compensation plan” as defined in and subject to Section 409A(d)(1)409A of the Code (a “Nonqualified Deferred Compensation Plan”) and any award thereunder, in each case that is subject to Section 409A of the Code, has (i) been maintained and operated in good faith compliance with Section 409A of the Code and IRS Notice2005-1, (ii)all applicable regulatory guidance thereunder (including, but not been “materially modified” (within the meaning of Notice2005-1), and (iii) been in documentary and operational compliance with a reasonable interpretation of Section 409A of the Code.limited to, Treasury Regulations). No assets set aside for the payment of benefits under any Nonqualified Deferred Compensation Plan are held outside of the United States, except to the extent that substantially all of the services to which such benefits are attributable have been performed in the jurisdiction in which such assets are held.

(e)    Section 3.11(e) of the Company Disclosure Schedule identifies each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code (the “Qualified Plans”). The IRS has issued a favorable determination letter with respect to each Qualified Plan and the related trust that has not been revoked (nor has revocation been threatened),or threatened to be revoked, and, to Company’s Knowledge, no circumstances or events have occurred that would reasonably be expected to adversely affect the qualified status of any Qualified Plan or the related trust or increase the costs relating thereto. No trust funding any Plan is intended to meet the requirements of Code Section 501(c)(9).

(f)    Except as set forth on Section 3.11(f) of the Company Disclosure Schedule, none of the Company and its Subsidiaries nor any of their respective ERISA Affiliates has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code (a “Title IV Plan”). Except as set forth on Section 3.11(f) of the Company Disclosure Schedule, with respect to each Title IV Plan, (i) no liability under Title IV or Section 302 of ERISA has been incurred by the Company or any of its Subsidiaries or any of their respective ERISA Affiliates that has not been satisfied in full prior to the date hereof, and no condition exists that presents a risk to the Company or Company Bank or any of their ERISA Affiliates of incurring or being subject to any liability or obligation thereunder, (ii) no reportable event (within the meaning of Section 4043 of ERISA), other than an event for which the reporting requirements have been waived by regulations, has occurred within the six years prior to the date hereof or is expected to occur as a result of the transactions contemplated by this Agreement, (iii) no failure to meet the minimum funding standard under Section 412 or 430 of the Code or Section 302 or 303 of ERISA has occurred, (iv) all contributions (including installments) required by Section 301 of ERISA and Sections 412 or 430 of the Code have been timely made, (v) no funding waiver has been applied for or been received or any amortization period extended within the meaning of Section 412 of the Code or Section 302 or 303 of ERISA, (vi) there are no funding-based limitations, within the meaning of Section 436 of the Code, currently in effect, (vii) none of the assets of Company or Company Bank are the subject of any lien arising under ERISA or Section 430(k) of the Code, and the Company has not been required to post any security under ERISA or Section 401(a)(29) of the Code, and no fact or event exists that would reasonably be expected to give rise to any such lien or requirement to post any such security, (viii) all premiums (and interest charges and penalties for late payment, if applicable) have been paid when due to the Pension Benefit Guaranty Corporation, (ix) there has been no event described in Section 4062(e) of ERISA, and the transactions contemplated by this Agreement will not result in any event described in Section 4062(e) of ERISA, and (x) no notice of intent to terminate any Title IV Plan has been filed and no amendment to treat a Title IV Plan as terminated has been adopted and no proceeding has been commenced by the PBGC to terminate any Title IV Plan. None of Company and its Subsidiaries nor any of their respective ERISA Affiliates has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA (a “Multiple Employer Plan”); and none of the Company andany of its Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan or Multiple Employer Plan as a result of a complete or partial withdrawal (as those terms are defined in Part I of Subtitle E of Title IV of ERISA) from such Multiemployer Plan or Multiple Employer Plan.

(g)    Except as Previously Disclosed,set forth on Section 3.11(g) of the Company Disclosure Schedule, neither Company nor any of its Subsidiaries sponsors, has sponsored or has any obligation with respect to any employee benefit plan that provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employeesEmployees or beneficiaries or dependents thereof, except as required by Section 4980B of the Code. Company and each of its SubsidiariesCompany Bank have

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reserved the right to amend, terminate or modify at any time all plans or arrangements providing for retiree health or medical or life insurance coverage, and no representations or commitments, whether or not written, have been made that would limit Company’s or such Subsidiary’sCompany Bank’s right to amend, terminate or modify any such benefits.

(h)    All contributions required to be made to any Company Benefit Plan by applicable Law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Company Benefit Plan, for any period through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of Company.

(i)    Except as Previously Disclosed,set forth on Section 3.11(i) of the Company Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause the vesting, exercisability or delivery of, or increase in the amount or value of, any payment, right or other benefit to any employee, officer, director or other service provider of Company or any of its Subsidiaries,Company Bank, or result in any limitation on the right of Company or any of its SubsidiariesCompany Bank to amend, merge, terminate or receive a reversion of assets from any Company Benefit Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) by Company or any of its SubsidiariesCompany Bank in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code. No Company Benefit Plan provides for thegross-up or reimbursement of Taxes under Section 4999 or 409A of the Code, or otherwise.

(j)    There does not now exist, nor do any circumstances exist that could result in, any Controlled Group Liability (as hereinafter defined) that would be a material liability of Company, its SubsidiariesCompany Bank or any of their ERISA Affiliates following the Closing. Without limiting the generality of the foregoing, neither Company nor any of its ERISA Affiliates has engaged in any transaction described in Section 4069 or Section 4204 or 4212 of ERISA.

(k)    None of Company and its Subsidiariesor Company Bank nor any of their respective ERISA Affiliates noror any Person now or previously employed by Company, including any fiduciary, has engaged in any “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA), which could subject any of the Company Benefit Plans or their related trusts, Company, any of its Subsidiaries,Company Bank, any of their respective ERISA Affiliates or any Person that Company or any of its SubsidiariesCompany Bank has an obligation to indemnify with respect to such prohibited transaction, to any material taxTax or penalty imposed under Section 4975 of the Code or Section 502 of ERISA.

(l)    There are no pending or, to Company’s Knowledge, threatened claims (other than claims for benefits in the ordinary course)course of business), lawsuits or arbitrations which have been asserted or instituted, and, to Company’s Knowledge, no set of circumstances exists which may reasonably give rise to a claim or lawsuit, against the Company Benefit Plans, any fiduciaries thereof with respect to their duties to the Company BenefitsBenefit Plans or the assets of any of the trusts under any of the Company Benefit Plans which could reasonably be expected to result in any material liability of Company or any of its SubsidiariesCompany Bank to the Pension Benefit Guaranty Corporation, the Department of Treasury, the Department of Labor, any Multiemployer Plan, a Multiple Employer Plan, any participant in a Company Benefit Plan, or any other party.

(m)    Each individual who renders services to Company or any of its SubsidiariesCompany Bank who is classified by Company or such Subsidiary,Company Bank, as applicable, as having the status of an independent contractor or othernon-employee status for any purpose (including for purposes of taxation and tax reporting and under Company Benefit Plans) is properly so characterized.

(n)    NoExcept as set forth on Section 3.11(n) of the Company Disclosure Schedule, no deduction of any amount payable pursuant to the terms of any Company Benefit Plan has been disallowed or is subject to disallowance under Section 162(m) of the Code.

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(o)Definitions.

(i)    “Controlled Group Liability” means any and all liabilitiesliability (i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412, 430 and 4971 of the Code, (iv) as a result of a failure

to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, andor (v) under corresponding or similar provisions of foreign Laws.

(ii)    “ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

3.12Approvals. As of the date of this Agreement, to Company’s Knowledge, there is no reason why all regulatory approvals from any Governmental Entity required for the consummation of the transactions contemplated by this Agreement should not be obtained on a timely basis.

3.13Opinion. The Board of Directors of Company has received the opinion of ProBank Austin,Raymond James & Associates, Inc. to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration is fair from a financial point of view to the holders of Company Common Shares.

3.14LoanPut-Backs. Company has Previously Disclosedpreviously provided to Purchaser all claims for repurchases by Company or any of its Subsidiaries of home mortgage loans that were sold to third parties by Company or its Subsidiaries during the past five years that are outstanding or currently threatened in writing, and Company has no reason to believe that it may be required to repurchase any material dollar volume of home mortgage loans sold to third parties by Company or its Subsidiaries. None of the agreements pursuant to which Company or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan.

3.15Legal Proceedings.

(a)    Except as Previously Disclosed, thereThere is no suit, action, investigation, claim, proceeding or review pending, or to Company’s Knowledge, threatened against or affecting itCompany or any of its SubsidiariesCompany Bank or any of the current or former directors or executive officers of itCompany or any of its SubsidiariesCompany Bank (and itCompany is not aware of any basis for any such suit, action, investigation, claim, proceeding or review) (i) that involves a Governmental Entity, or (ii) that, individually or in the aggregate, is (A) material to it and its Subsidiaries,Company Bank, taken as a whole, or is reasonably likely to result in a material restriction on its or any of its Subsidiaries’Company Bank’s businesses or, after the Effective Time, the business of Purchaser, Surviving Company or any of their affiliates, or (B) reasonably likely to materially prevent or delay it from performing its obligations under, or consummating the transactions contemplated by, this Agreement. There is no injunction, order, award, judgment, settlement, decree or regulatory restriction imposed upon or entered into by Company, any of its SubsidiariesCompany Bank or the assets of itCompany or any of its SubsidiariesCompany Bank (or that, upon consummation of the Merger, would apply to Purchaser or any of its affiliates) that is or could reasonably be expected to be material to Company or any of its Subsidiaries.Company Bank.

(b)    Since December 31, 2012,2017, (i) there have been no subpoenas, written demands, or document requests received by Company, any of its Subsidiaries or any affiliate of Company or any of its Subsidiaries from any Governmental Entity, except such as are received by Company or any of its Subsidiaries or any affiliate of Company or any of its Subsidiaries in the ordinary course of business consistent with past practice or as are not, individually or in the aggregate, material to Company and its Subsidiaries taken as a whole, and (ii) no Governmental Entity has requested that Company or any of its Subsidiaries enter into a settlement negotiation or tolling agreement with respect to any matter related to any such subpoena, written demand, or document request.

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Except as Previously Disclosed, neither Neither Company nor any of its Subsidiaries is subject to anycease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since December 31, 2012,2017, a

recipient of any supervisory letter from, or since December 31, 2012,2017, has adopted any policies, procedures or board resolutions at the request or suggestion of any Governmental Entity that currently (x) restricts the conduct of its business, or that(y) relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business, other than those of general application that apply to similarly situated bankfinancial holding companies or their Subsidiaries (each item in this sentence, whether or not set forth inon the Company Disclosure Schedule, a “Regulatory Agreement”), nor has Company or any of its Subsidiaries been advised in writing since December 31, 20122017 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Regulatory Agreement.

3.16Material Contracts.

(a)    Except as Previously Disclosed,set forth on Section 3.16 of the Company Disclosure Schedule, neither Company nor any of its SubsidiariesCompany Bank is a party to, bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether written or oral) (each, whether or not Previously Disclosed, a “Material Contract”): (i) that is a “material contract” within the meaning of Item 601(b)(10) of the SEC’s RegulationS-K; (ii) any employment, severance, termination, consulting, or retirement Contractcontract providing for aggregate payments to any Person in any calendar year in excess of $50,000, (iii) any Contractcontract relating to the borrowing of money by Company or any of its SubsidiariesCompany Bank or the guarantee by Company or any of its SubsidiariesCompany Bank of any such obligation (other than Contractscontracts evidencing deposit liabilities, purchases of federal funds and Federal Home Loan Bank advances of depository institution SubsidiariesCompany Bank and ordinary course trade payables not past due) in excess of $100,000, (iv) any Contractcontract that contains anynon-competition ornon-solicitation arrangements or other arrangements or obligations that purport to limit or restrict in any respect the ability of Company or its affiliatesCompany Bank (including, following consummation of the transactions contemplated hereby, Purchaser or any of its affiliates) to solicit customers or the manner in which, or the localities in which, all or any portion of the business of Company and its affiliatesCompany Bank (including, following consummation of the transactions contemplated hereby, Purchaser or any of its affiliates) is or could be conducted, (v) any Contractcontract not terminable by Company, without penalty or other incremental expense in excess of $25,000,$50,000, with less than 90 days’ notice relating to the purchase or sale of any goods or services by Company or any of its SubsidiariesCompany Bank (other than Contractscontracts entered into in the ordinary course of business consistent with past practice and involving payments under any individual Contractcontract not in excess of $25,000$50,000 or involving Loans, borrowings or guarantees originated or purchased by Company or any of its SubsidiariesCompany Bank in the ordinary course of business consistent with past practice), (vi) any Contractcontract not terminable by Company without penalty or other incremental expense in excess of $25,000,$50,000, with less than 90 days’ notice which obligates Company or any of its affiliatesCompany Bank (or, following the consummation of the Merger, Purchaser or any of its affiliates) to conduct business with any third party on an exclusive or preferential basis, (vii) any Contractcontract not terminable by Company without penalty or other incremental expense in excess of $25,000,$50,000, with less than 90 days’ notice which requires referrals of business or requires Company or any of its SubsidiariesCompany Bank to make available investment opportunities to any Person on a priority or exclusive basis, (viii) any Contractcontract not terminable by Company without penalty or other incremental expense in excess of $25,000,$50,000, with less than 90 days’ notice which grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of Company or any of its Subsidiaries,Company Bank, (ix) any Contractcontract which limits the payment of dividends by Company or any of its Subsidiaries,Company Bank, (x) any Contractcontract pursuant to which Company or any of its SubsidiariesCompany Bank has agreed with any third parties to become a member of, manage or control a joint venture, partnership, limited liability company or other similar entity, (xi) any Contractcontract pursuant to which Company or any of its SubsidiariesCompany Bank has agreed with any third party to a change of control transaction such as an acquisition, divestiture or merger and which contains representations, covenants, indemnities or other obligations (including indemnification,“earn-out” or other contingent obligations) that are still in effect, (xii) any Contractcontract which relates to any material Intellectual Property of or used by Company or any of its Subsidiaries,Company Bank, (xiii) any Contractcontract between Company or any of its Subsidiaries,Company Bank, on the one hand, and (a) any officer or director of Company or any of its Subsidiaries, orCompany Bank, (b) to the Company’s Knowledge, of

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Company, any affiliate or family member of any such officer or director or (c) any other affiliate of Company, on the other hand, except those of a type available to employeesEmployees of Company generally, or (xiv) any Contractcontract that provides for payments to be made by Company or any of its SubsidiariesCompany Bank upon a change in control thereof or a termination of such Contractcontract in excess of $50,000. For purposes of this

Agreement, “Person” shall mean any individual, bank, corporation, partnership, limited liability company, association, joint venture or other organization, whether an incorporated or unincorporated organization, or Governmental Entity.

(b)    Each Material Contract is a valid and legally binding agreement of Company or one of its Subsidiaries, as applicable, and, to Company’s Knowledge, the counterparty or counterparties thereto, is enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception) and is in full force and effect. Company and each of its SubsidiariesCompany Bank has duly performed all material obligations required to be performed by it prior to the date hereof under each Material Contract, neither Company nor any of its Subsidiaries,Company Bank, and, to Company’s Knowledge, any counterparty or counterparties, is in material breach or violation of any provision of any Material Contract, and no event or condition exists that constitutes, or after notice or lapse of time or both, will constitute, a breach, violation or default on the part of Company or any of its SubsidiariesCompany Bank under any such Material Contract or provide any party thereto with the right to terminate such Material Contract. Company has provided true and complete copies of each Material Contract to Purchaser prior to the date hereof.

3.17Environmental Matters. Except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company and its Subsidiaries,Company Bank, and to the Knowledge of Company, (i)Company’s Knowledge:

(a)    Company and its SubsidiariesCompany Bank have complied with all applicable Laws relating to: (a)(i) the protection or restoration of the environment, health, safety or natural resources; (b)(ii) the handling, use, presence, disposal, release or threatened release of, or exposure to, any hazardous substance; and (c)(iii) noise, odor, wetlands, indoor air, pollution, contamination or any injury or threat of injury to persons or property involving any hazardous substance (“Environmental Laws”); (ii)

(b)    there are no proceedings, claims, actions, or investigations of any kind, pending or threatened in writing, by any Person, court, agency, or other Governmental Entity or any arbitral body, against Company or its SubsidiariesCompany Bank relating to any Environmental Law and there is no reasonable basis for any such proceeding, claim, action or investigation; (iii)

(c)    there are no agreements, orders, judgments, indemnities or decrees by or with Company or its Subsidiaries,Company Bank, and any Person, court, regulatory agency or other Governmental Entity, that could impose any liabilities or obligations under or in respect of any Environmental Law; (iv)

(d)    there are, and have been, no hazardous substances or other environmental conditions at any property under circumstances which could reasonably be expected to result in liability to or claims against Company or its SubsidiariesCompany Bank relating to any Environmental Law; and (v)

(e)    there are no reasonably anticipated future events, conditions, circumstances, practices, plans, or legal requirements that could give rise to obligations or liabilities to Company and its SubsidiariesCompany Bank under any Environmental Law; and

(f)    there are no agreements, orders, judgments, indemnities or decrees by or with any borrower of Company Bank with respect to which Company Bank has a security interest in real property owned by such borrower, and any Person, court, regulatory agency or other Governmental Entity, that could impose any liabilities or obligations under or in respect of any Environmental Law.

3.18Taxes. Company and each of its Subsidiaries (i)(a) have prepared in good faith and duly and timely filed (taking into account any extension of time within which to file) all material Tax Returns (as defined below) required to be filed by them and all such filed Tax Returns are complete and accurate in all material respects; and (ii)(b) have timely paid all material Taxes (as defined below) that are required to have been paid or that Company or any of its Subsidiaries are obligated to have withheld from amounts owing to any employee, creditor or third party and to have paid, except with respect to matters contested in good faith and for which adequate reserves

have been established and reflected on the financial statements of Company or its Subsidiaries. NoneExcept as set forth on Section 3.18 of the Company Disclosure Schedule, none of the material Tax Returns pertaining to Company or any of its Subsidiaries are currently under any audit, suit, proceeding, examination or assessment by the IRS or the relevant state, local or foreign Tax authority and neither Company nor any of its Subsidiaries has received written notice from any Tax authority that an audit, suit, proceeding, examination or assessment in respect of such Tax Returns or matters pertaining to Taxes is pending or threatened. Company has not received written notice of any material deficiencies asserted or assessments made against Company or any of its Subsidiaries that have not been paid or resolved in full. Company has not received any written notice of any claim against Company or any of its Subsidiaries by any Tax authority in a jurisdiction where Company or such Subsidiary does not file Tax Returns that Company or such Subsidiary is or may be subject to taxation by that jurisdiction. No Liens for Taxes exist with respect to any of the assets of

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Company or any of its Subsidiaries, except for Liens for Taxes not yet due and payable. Neither Company nor any of its Subsidiaries has entered into, or obtained, as applicable, any material closing agreements, private letter rulings, technical advice memoranda or similar agreement or rulings with any Tax authority, nor have any been issued by any Tax authority, in each case that have any continuing effect. None of Company or any of its Subsidiaries have been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Each of Company and its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could reasonably be expected to give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. NeitherExcept as set forth on Section 3.18 of the Company Disclosure Schedule, neither Company nor any of its Subsidiaries (A)(i) has ever been a member of an affiliated, combined, consolidated or unitary Tax group for purposes of filing any Tax Return, other than a group of which Company was the common parent, (B)(ii) has any liability for a material amount of Taxes of any Person (other than Company or any of its Subsidiaries) under Treasury RegulationsSection 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise or (C)(iii) is a party to or bound by any Tax sharing or allocation agreement or has any other current contractual obligation to indemnify any other Person with respect to Taxes (other than such an agreement or arrangement exclusively between or among Company and its Subsidiaries). Neither Company nor any of its Subsidiaries has participated in any “listed transactions” within the meaning of Treasury Regulations Section1.6011-4(b)(2). Neither Company nor any of its Subsidiaries has been a “distributing corporation” or “controlled corporation” in any distribution occurring during the last 30 months that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law). Neither Company nor any of its Subsidiaries is the beneficiary of any extension of time within which to file any material Tax Return (other than extensions to file Tax Returns obtained in the ordinary course of business). As used in this Agreement, (i)(A) the term “Tax” (including, with correlative meaning, the term “Taxes”) includes all United States federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes,Taxes, duties or like assessments of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions, and (ii)(B) the term “Tax Return” includes all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) supplied or required to be supplied to a Tax authority relating to Taxes.

3.19Reorganization. Company has not taken or agreed to take any action, and is not aware of any fact or circumstance, that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

3.20Intellectual Property. Except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Company and its Subsidiaries, or as otherwise Previously Disclosed:Company Bank:

(a)    Each of Company and its Subsidiaries,Company Bank, to itsCompany’s Knowledge (A)(i) owns (beneficially and of record, where applicable), free and clear of all Liens, other thannon-exclusive licenses entered into in the ordinary course of business consistent with past practice, all right, title and interest in and to its respective Owned Intellectual Property, and (B)(ii) has valid and sufficient rights and licenses to all of the Licensed Intellectual Property. To the Company’s Knowledge, of Company, the Owned Intellectual Property is subsisting, valid and enforceable. To

the Company’s Knowledge, of Company, the Owned Intellectual Property and the Licensed Intellectual Property constitute all Intellectual Property used in or necessary for the operation of the respective businesses of Company and each of its SubsidiariesCompany Bank as presently conducted. To Company’s Knowledge, each of Company and its SubsidiariesCompany Bank has sufficient rights to use all Intellectual Property used in its respective business as presently conducted.

(b)    To Company’s Knowledge, the operation ofby Company and eachCompany Bank of its Subsidiaries’their respective businesses as presently conducted does not infringe, misappropriate or otherwise violate the Intellectual Property rights of any third Person, and since December 31, 2012,2017, no Person has asserted in writing that Company or any of its

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SubsidiariesCompany Bank has materially infringed, misappropriated or otherwise violated any third Person’s Intellectual Property rights. To Company’s Knowledge, no third Person has infringed, misappropriated or otherwise violated any of Company’s or any of its Subsidiary’sCompany Bank’s rights in the Owned Intellectual Property.

(c)    Each of Company and each of its SubsidiariesCompany Bank has taken reasonable measures to protect (A)(i) their rights in their respective Owned Intellectual Property and (B)(ii) the confidentiality of all Trade Secrets that are owned, used or held by Company or any of its Subsidiaries,Company Bank, and to Company’s Knowledge, such Trade Secrets have not been used, disclosed to or discovered by any Person except pursuant to appropriatenon-disclosure agreements which have not been breached. To Company’s Knowledge, no Person has gained unauthorized access to Company’s or its Subsidiaries’Company Bank’s IT Assets.

(d)    Each of Company’s and each of its Subsidiaries’Company Bank’s respective IT Assets operate and perform in all material respects as reasonably required by Company and each of its SubsidiariesCompany Bank in connection with their respective businesses and have not materially malfunctioned or failed within the past two years. To Company’s Knowledge, Company and each of its SubsidiariesCompany Bank has implemented reasonable backup, security and disaster recovery technology and procedures consistent with industry practices. To Company’s Knowledge, Company and each of its SubsidiariesCompany Bank is compliant with their own privacy policies and commitments to their respective customers, consumers and employees, concerning data protection and the privacy and security of personal data and the nonpublic personal information of their respective customers, consumers and employees.

(e)    For purposes of this Agreement,

(i)    “Intellectual Property” means any and all: (i)(A) trademarks, service marks, brand names, collective marks, Internet domain names, logos, symbols, trade dress, trade names, business names, corporate names, slogans, designs and other indicia of origin, together with all translations, adaptations, derivations and combinations thereof, all applications, registrations and renewals for the foregoing, and all goodwill associated therewith and symbolized thereby (“Trademarks”); (ii)thereby; (B) patents and patentable inventions (whether or not reduced to practice), all improvements thereto, and all invention disclosures and applications therefor, together with all divisions, continuations,continuations-in-part, revisions, renewals, extensions, reexaminations and reissues in connection therewith; (iii)(C) confidential proprietary business information, trade secrets andknow-how, including processes, schematics, business and other methods, technologies, techniques, protocols, formulae, drawings, prototypes, models, designs, unpatentable discoveries and inventions (“Trade Secrets”); (iv)(D) copyrights in published and unpublished works of authorship (including databases and other compilations of information), and all registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof; and (v)(E) other intellectual property rights.

(ii)    “IT Assets” means, with respect to any Person, the computers, computer software, firmware, middleware, servers, workstations, routers, hubs, switches, data, data communications lines, and all other information technology equipment, and all associated documentation owned by such Person or such Person’s Subsidiaries.

(iii)    “Licensed Intellectual Property” means the Intellectual Property owned by third Persons that is used in or necessary for the operation of the respective businesses of Company or Purchaser, as the case may be, and each of its respective Subsidiaries as presently conducted.

(iv)    “Owned Intellectual Property” means Intellectual Property owned or purported to be owned by Company or Purchaser, as the case may be, or any of its respective Subsidiaries.

3.21Properties. Company or one of its Subsidiaries, except as Previously Disclosed,Company Bank (a) has good and, as to real property, marketable title to all the material properties and assets reflected in either the latest unauditedaudited balance sheet or latest interim balance sheet included in the Financial Statements as being owned by Company or one of its SubsidiariesCompany Bank or acquired after the date thereof (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business consistent with past practice) (the “Company Owned Properties”“), free and

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clear of all Liens of any nature whatsoever, except (i) statutory Liens securing payments not yet due or which are contested in good faith and for which adequate reserves have been taken, (ii) Liens for real property Taxes not yet due and payable, (iii) easements, rights of way, and other similar encumbrances that do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties and (iv) such imperfections or irregularities of title or Liens as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (collectively, “Company Permitted Encumbrances”), and (b) is the lessee of all leasehold estates reflected in either the Financial Statements or acquired after the date thereof (except for leases that have expired by their terms since the date thereof) (collectively with the Company Owned Properties that constitute real property, the “Company Real Property”“), free and clear of all Liens of any nature whatsoever, except for Company Permitted Encumbrances, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to theCompany’s Knowledge, of Company, the lessor. There are no pending or, to theCompany’s Knowledge, of Company, threatened (in writing) condemnation proceedings against the Company Real Property.

3.22Insurance. Company and its SubsidiariesCompany Bank are insured with insurers believed by Company to be reputable insurers against such risks and in such amounts as the management of Company reasonably has determined to be prudent and consistent with industry practice. Company and its SubsidiariesCompany Bank are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof. Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employeesEmployees of Company and its Subsidiaries,Company Bank, Company or the relevant SubsidiaryCompany Bank thereof is the sole beneficiary of such policies, and all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.

3.23Accounting and Internal Controls.

(a)    The records, systems, controls, data and information of Company and its SubsidiariesCompany Bank are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of Company or its SubsidiariesCompany Bank or accountants (including all means of access thereto and therefrom), except for anynon-exclusive ownership andnon-direct control that would not reasonably be expected to have a material adverse effectMaterial Adverse Effect on the system of internal accounting controls described in the following sentence. Company and Company Bank have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Company has designed and implemented disclosure controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act) reasonably intended to ensure that material information relating to Company and Company Bank is made known to its management by others within those entities.

(b)    Company’s management completed an assessment of the effectiveness of its internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the years ended December 31, 2020 and 2021, and such assessments concluded that such controls were effective. Based on Company’s most recent evaluation prior to the date hereof, there were not: (A) any significant deficiencies and

material weaknesses in the design or operation of internal controls over financial reporting or (B) any fraud, whether or not material, that involves management or other Employees who have a significant role in its internal controls over financial reporting.

(c)    Since December 31, 20122017, (A) except as Previously Disclosed, neither Company nor any of its Subsidiaries nor, to Company’s Knowledge, any director, officer, auditor, accountant or representativeRepresentative of itCompany or any of its Subsidiaries has received or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or written claim regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals) of Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or written claim that Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (B) no attorney representing Company or any of its Subsidiaries, whether or not employed by it or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by it or any of its officers or directors to its Board of Directors or any committee thereof or to any of its directors or officers.

3.24Derivatives. All interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar derivative transactions and risk management arrangements, whether entered into for the account of Company or for the account of a customer of the Company Bank, were entered into in the ordinary course of business and in all material respects in accordance with applicable rules, regulations and policies of the applicable regulatory authority and with counterparties believed to be financially responsible at the time and are legal, valid and binding obligations of Company or Company Bank enforceable in accordance with their terms, subject to the Bankruptcy and Equity Exception, and are in full force and effect. Company and Company Bank have duly performed in all material respects all of their material obligations thereunder to the extent that such

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obligations to perform have accrued, and, to Company’s Knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereunder.

3.25Labor. (i)(a) Neither Company nor any of its Subsidiaries is or since December 31, 2012,2017, has been a party to any collective bargaining agreement, labor union contract, or trade union agreement (each a “Collective Bargaining Agreement”); (ii)(b) no employee is represented by a labor organization for purposes of collective bargaining with respect to Company or any of its Subsidiaries; (iii)(c) to the Company’s Knowledge, of Company, as of the date hereof, there are no activities or proceedings of any labor or trade union to organize any employees of Company or any of its Subsidiaries; (iv)(d) no Collective Bargaining Agreement is being negotiated by Company or any of its Subsidiaries; (v)(e) as of the date hereof, there is no strike, lockout, slowdown, or work stoppage against Company or any of its Subsidiaries pending or, to the Company’s Knowledge of Company,, threatened, that may interfere in any material respect with the respective business activities of Company or any of its Subsidiaries; (vi)(f) to the Company’s Knowledge, of Company, there is no pending charge or complaint against Company or any of its Subsidiaries by the National Labor Relations Board or any comparable Governmental EntityEntity; and (vii)(g) Company and its Subsidiaries have complied with all Laws regarding employment and employment practices, terms and conditions of employment and wages and hours and other Laws in respect of any reduction in force, including notice, information and consultation requirements.

3.26Loans; Loan Matters.

(a)    AsExcept as set forth on Section 3.26(a)(1) of the Company Disclosure Schedule, as of most recent calendar quarter end, neither Company nor any of its SubsidiariesCompany Bank is a party to any written or oral (i) loan agreement, note or borrowing arrangement (including leases, credit enhancements, commitments, guarantees and interest-bearing assets) (collectively, “Loans”), (x) the unpaid principal balance of which exceeds $50,000, and under the terms of which the obligor was 90 days or more delinquent in payment of principal or interest or (y) to the Company’s Knowledge, of Company, the unpaid principal balance of which exceeds $50,000 and which the obligor is in material default of any other provision under such Loan (for purposes of this clause (y), the failure of a borrower to deliver financial and other data on a timely basis to Company as required by the relevant loan agreement shall not be deemed a material default), or (ii) Loan with any director, executive officer or five percent5% or greater shareholder

of Company or any of its Subsidiaries,Company Bank, or to the Company’s Knowledge, of Company, any Person controlling, controlled by or under common control with any of the foregoing. Section 3.26(a)(2) of the Company Disclosure Schedule sets forth (i) all of the Loans in original principal amount in excess of $50,000 of Company or any of its SubsidiariesCompany Bank that, as of the most recent calendar quarter end, were classified (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import, together with the principal amount of and accrued and unpaid interest on each such Loan as of such date and the identity of the borrower thereunder, (ii) by category of Loan (i.e., commercial, consumer, etc.), all of the other Loans of Company and its SubsidiariesCompany Bank that as of most recent quarter end, were classified as such, together with the aggregate principal amount of and accrued and unpaid interest on such Loans by category, (iii) each Loan for which Company or Company Bank has afforded any payment accommodation, forbearance, or otherwise modified or amended in accordance with the Coronavirus Aid, Relief, and (iii)Economic Security Act or otherwise as a result of the effects of COVID-19, and (iv) each asset of Company that as of the most recent calendar quarter end, was classified as “Other Real Estate Owned” and the book value thereof as of such date.

(b)    Each Loan currently outstanding (i) is evidenced by notes, agreements or other evidences of indebtedness that are, in all material respects, true, genuine and what they purport to be, (ii) to the extent secured, has been secured by valid Liens which have been perfected and (iii) to Company’s Knowledge, is a legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception). The notes or other credit or security documents with respect to each such outstanding Loan were in compliance with all applicable Laws at the time of origination or purchase by Company or its SubsidiariesCompany Bank and are complete and correct in all material respects. Each outstanding Loan (including Loans held for resale to investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files are being maintained in all material respects in accordance with the relevant notes or other credit or security documents, Company’s written underwriting standards (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and with the requirements under all applicable Laws.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB

Except as Previously Disclosed, Purchaser and Merger Sub hereby jointly and severally represent and warrant to Company as follows:

4.1Corporate Organization.

(a)    Purchaser is a corporation duly formed, validly existing and in good standing under the laws of the State of Ohio. Merger Sub is a limited liability company duly organized and in full force and effectgood standing under the laws of the State of Ohio. Each of Purchaser and Merger Sub has the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is and will be duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary. Purchaser is duly registered as a bank holding company under the BHC Act.

(b)    Purchaser Bank, a national association, and Farmers Trust Company, a state trust company, are each a Subsidiary of Purchaser and each (i) is duly organized and validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the requisite corporate (or similar) power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and (iii) except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Purchaser, is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes

such licensing or qualification necessary. The deposit accounts of Purchaser Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by Law, and all premiums and assessments required to be paid in connection therewith have been paid when due.

4.2Capitalization. The authorized capital stock of Purchaser consists of 35,000,00050,000,000 Purchaser Common Shares of Purchaser Common Stock, of which, as of March 6, 20171, 2022 (the “Purchaser Capitalization Date”), 27,066,59334,004,914 were issued and outstanding. As of the Purchaser Capitalization Date, no Purchaser Common Shares were authorized for issuance upon exercise of options issued pursuant to employee and director stock plans of Purchaser or a Subsidiary of Purchaser in effect as of the date of this Agreement (the “Purchaser Stock Plans”). All of the issued and outstanding Purchaser Common Shares have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.rights. As of the date of this Agreement, no Voting Debt of Purchaser is issued or outstanding. As of the Purchaser Capitalization Date, except pursuant to this Agreement and the Purchaser Stock Plans, Purchaser does not have and is not bound by any outstanding subscriptions, options, warrants, calls, rights, commitments or agreements of any character calling for the purchase or issuance of any Purchaser Common Shares, Voting Debt of Purchaser or any other equity securities of Purchaser or any securities representing the right to purchase or otherwise receive any Purchaser Common Shares or Voting Debt of Purchaser or other equity securities of Purchaser. The Purchaser Common Shares to be issued pursuant to the Merger have been reserved for issuance, and when issued, will be duly authorized and validly issued and, at the Effective Time, all such shares will be fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.rights.

4.3Authority; No Violation.

(a)    Purchaser has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. Merger Sub has the full limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly, validly, and unanimously adopted and approved by the Board of Directors of Purchaser and the managers and members of Merger Sub to the extent required by applicable Law. No other corporate proceedings on the part of Purchaser or Merger Sub are necessary to approve this Agreement, or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Purchaser and Merger Sub and (assuming due authorization, execution and delivery by Company) constitutes the valid and binding obligation of Purchaser and Merger Sub, enforceable against Purchaser and Merger Sub in accordance with its terms (subject to the Bankruptcy and Equity Exception).

(b)    Neither the execution and delivery of this Agreement by Purchaser or Merger Sub, nor the consummation by Purchaser or Merger Sub of the transactions contemplated hereby, nor compliance by Purchaser or Merger Sub with any of the terms or provisions of this Agreement, will (i) violate any provision of the articles of incorporation or code of regulations of Purchaser or the articles of organization or operating agreement of Merger Sub, or (ii) assuming that the consents, approvals and filings referred to in Section 4.4 are duly obtained and/or made, (A) violate any other Law, judgment, order, injunction or decree applicable to Purchaser, any of its Subsidiaries or any of their respective properties or assets or (B) violate, conflict with, result

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in a breach of any provision of or the loss of any benefit under, constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Purchaser or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Purchaser or any of its Subsidiaries is a party or by which any of them or any of their respective properties or assets is bound except, with respect to clause (ii), any such violation, conflict, breach, default, termination, cancellation, acceleration or creation as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Purchaser.

4.4Consents and Approvals. Except for (i)(a) the Regulatory Approvals, (ii)(b) the filing with the SEC of the Proxy Statement and the filing and declaration of effectiveness of the FormS-4, (iii)(c) the filing of the Statement of

Merger with the Department of State of the Commonwealth of Pennsylvania and the Certificate of Merger with the Ohio Secretary of State, and (iv)(d) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of the Purchaser Common Shares pursuant to this Agreement and approval of listing of such Purchaser Common Shares on the Nasdaq, no consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with the execution and delivery by Purchaser of this Agreement or with the consummation by Purchaser of the Merger or by Purchaser Bank of the Bank Merger and the other transactions contemplated by this Agreement. No consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with the execution and delivery by Purchaser of this Agreement.

4.5Reports.

(a) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Purchaser, Purchaser and each of its Subsidiaries have timely filed all reports, registration statements, proxy statements and other materials, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 20112017 with theany Regulatory Agencies and each other applicable Governmental Entity, and all other reports and statements required to be filed by them since December 31, 2011,2017, including any report or statement required to be filed pursuant to any applicable Laws, and all such reports, registration statements, proxy statements, other materials and amendments have complied in all material respects with all legal requirements relating thereto, and have paid all fees and assessments due and payable in connection therewith.

(b)    An accurate and complete copy of each final registration statement, prospectus, report, schedule and definitive proxy statement filed with or furnished to the SEC by Purchaser pursuant to the Securities Act or the Exchange Act (the “Purchaser SEC Reports”) since December 31, 20112017 is publicly available. All Purchaser SEC Reports, at the time of filing, complied, and all Purchaser SEC Reports required to be filed prior to the Effective Time will comply, in all material respects with applicable Law and included and will include all exhibits required to be filed under applicable Law. None of such documents, when filed or as amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. None of Purchaser’s Subsidiaries is required to file periodic reports with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

4.6Financial Statements.

(a)    The financial statements of Purchaser and its Subsidiaries included (or incorporated by reference) in Purchaser’sthe Purchaser SEC Reports (including the related notes, where applicable) have been prepared in accordance with GAAP during the periods involved (except as may be indicated in the notes thereto and for normalyear-end adjustments) and present fairly, in all material respects, the consolidated financial condition, earnings and cash flows of Purchaser and its consolidated Subsidiaries for the periods then ended. As of the date hereof, the books and records of Purchaser and its Subsidiaries have been maintained in all material respects in accordance with GAAP and any other applicable

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legal and accounting requirements and reflect only actual transactions. As of the date hereof, Crowe HorwathCliftonLarsonAllen LLP has not resigned (or informed Purchaser that indicated it intends to resign) or been dismissed as independent public accountants of Purchaser as a result of or in connection with any disagreements with Purchaser on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

(b)    Neither Purchaser nor any of its Subsidiaries has incurred any material liability or obligation of any nature whatsoever (whether absolute, accrued, contingent, determined, determinable or otherwise and whether due or to become due), except for (i) those liabilities that are reflected or reserved against on the consolidated balance sheet of Purchaser included in its Quarterly Report on Form10-Q for the fiscal quarter ended most recent fiscal

quarter end (including any notes thereto), (ii) liabilities incurred in the ordinary course of business consistent in nature and amount with past practice since the most recent fiscal quarter end or (iii) in connection with this Agreement and the transactions contemplated hereby.

4.7Broker’s Fees. Neither Purchaser nor any of its Subsidiaries nor any of their respective officers or directors have employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement, other than to Boenning & Scattergood, Inc.Janney Montgomery Scott LLC.

4.8Compliance with Applicable Law. Purchaser and each of its Subsidiaries hold, and have at all times since December 31, 20112017 held, all licenses, franchises, permits and authorizations which are necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to applicable Law (and have paid all fees and assessments due and payable in connection therewith), except where the failure to hold such license, franchise, permit or authorization or to pay such fees or assessments has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Purchaser and, to Purchaser’s Knowledge, no suspension or cancellation of any such necessary license, franchise, permit or authorization has, prior to the date hereof, been threatened in writing. Purchaser and each of its Subsidiaries have complied in all material respects with, and are not in default or violation in any material respect of, any applicable Law relating to Purchaser or any of its Subsidiaries.

4.9Legal Proceedings.

(a)    Except for litigation in the ordinary course of business, and as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Purchaser, none of Purchaser or any of its Subsidiaries is a party to any, and there are no pending or, to Purchaser’s Knowledge, threatened, material legal, administrative, arbitral or other material suits, actions, investigations, claims, proceedings or reviews of any nature against Purchaser or any of its Subsidiaries.Subsidiaries, and Purchaser is not aware of any basis for any such suits, actions, investigations, claims, proceeding or reviews.

(b)    There is no injunction, order, award, judgment, settlement, decree, Regulatory Agreement or other regulatory restriction (other than those of general application that apply to similarly situated banks or their Subsidiaries) imposed upon Purchaser or any of its Subsidiaries that is or could reasonably be expected to be material to Purchaser or any of its Subsidiaries.

(c)    There is no suit, action, investigation, claim, proceeding or review pending, or to Purchaser’s Knowledge, threatened against or affecting it or any of its Subsidiaries (and it is not aware of any basis for any such suit, action, investigation, claim, proceeding or review) that, individually or in the aggregate, is reasonably likely to materially prevent or delay it from performing its obligations under, or consummating the transactions contemplated by, this Agreement.

4.10Absence of Changes. Since December 31, 2016,2021, no event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Purchaser.

4.11Taxes. Purchaser and each of its Subsidiaries (i)(a) have prepared in good faith and duly and timely filed (taking into account any extension of time within which to file) all material Tax Returns (as defined

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below) in Section 3.18) required to be filed by them and all such filed Tax Returns are complete and accurate in all material respects; and (ii)(b) have timely paid all material Taxes (as defined below)in Section 3.18) that are required to have been paid or that Purchaser or any of its Subsidiaries are obligated to have withheld from amounts owningowing to any employee, creditor or third party and to have paid, except with respect to matters consentedcontested in good faith and for which adequate reserves have been established and reflected on the financial statements of Purchaser or its Subsidiaries. None of the material Tax Returns pertaining to Purchaser or any of its Subsidiaries are currently under any audit, suit, proceeding, examination or assessment by the IRS or the relevant state, local or foreign Tax

authority and neither Purchaser or any of its Subsidiaries has received written notice from any Tax authority that an audit, suit, proceeding, examination or assessment in respect of such Tax Returns or matters pertaining to Taxes is pending or threatened. No material assessment in respect of such Tax Returns or matters pertaining to Tax Returns or matters pertaining to Taxes is pending or threatened. NoPurchaser has not received written notice of any material deficiencies have been asserted or assessments made against Purchaser or any of its Subsidiaries that have not been paid in full. Purchaser has not received written notice of any claim against Purchaser or any of its Subsidiaries by any Tax authority in a jurisdiction where Purchaser or such Subsidiary does not file Tax Returns that Purchaser or such Subsidiary is or may be subject to taxation by that jurisdiction. No liensLiens for Taxes exist with respect to any of the assets of Purchaser or any of its Subsidiaries, except for liensLiens for Taxes not yet due and payable. Neither Purchaser nor any of its Subsidiaries has entered into, or obtained, as applicable, any material closing agreement, private letter ruling, technical advice memoranda or similar agreement or rulings with any Tax authority, nor have any been issued by any Tax authority, in each case that have any continuing effect. Each of Purchaser and its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could reasonably be expected to give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. Neither Purchaser nor any of its Subsidiaries (A) has ever been a member of an affiliated, combined, consolidated or unitary Tax group for purposes of filing any Tax Return, other than a group of which Purchaser was the common parent, (B) has any liability for a material amount of Taxes of any Person (other than Purchaser or any of its Subsidiaries) under Treasury RegulationsSection 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise or (C) is a party to or bound by any Tax sharing or allocation agreement or has any other current contractual obligation to indemnify any other Person with respect to Taxes (other than such agreement or arrangement exclusively between or among Purchaser and its Subsidiaries). Neither Purchaser nor any of its Subsidiaries has participated in any “listed transactions” within the meaning of Treasury Regulations Section1.6011-4(b)(2). Neither Purchaser nor any of its Subsidiaries has been a “distributing corporation” or “controlled corporation” in any distribution occurring during the last 30 months that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law). Neither Purchaser nor any of its Subsidiaries is the beneficiary of any extension of time within which or file any material Tax Return (other than extensions to file Tax Returns obtained in the ordinary course of business).

4.12Approvals. As of the date of this Agreement, Purchaser knows of no reason why all regulatory approvals from any Governmental Entity required for the consummation of the transactions contemplated by this Agreement should not be obtained on a reasonably timely basis.

4.13Reorganization.

(a)    Purchaser has not taken or agreed to take any action, and is not aware of any fact or circumstance, that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

(b)    Merger Sub is an entity that is disregarded as an entity separate from Purchaser for federal Tax purposes and, as such, is a “disregarded entity” as defined in Treasury Regulations1.368-2(b)(1)(i)(A).

4.14Intellectual Property. Except as has not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on Purchaser and its Subsidiaries:

(a)    Each of Purchaser and its Subsidiaries, to Purchaser’s Knowledge (A)(i) owns (beneficially, and of record where applicable), free and clear of all Liens, other thannon-exclusive licenses entered into in the ordinary course of business consistent with past practice, all right, title and interest in and to its respective Owned

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Intellectual Property, and (B)(ii) has valid and sufficient rights and licenses to all of the Licensed Intellectual Property. To Purchaser’s Knowledge, the Owned Intellectual Property is subsisting, valid and enforceable. To Purchaser’s Knowledge, the Owned Intellectual Property and the Licensed Intellectual Property constitute all Intellectual Property used in or necessary for the operation of the respective businesses of Purchaser and each of

its Subsidiaries as presently conducted. To Purchaser’s Knowledge, each of Purchaser and its Subsidiaries has sufficient rights to use all Intellectual Property used in its respective business as presently conducted.

(b)    To Purchaser’s Knowledge, the operation of Purchaser and each of its Subsidiaries’ respective businesses as presently conducted does not infringe, misappropriate or otherwise violate the Intellectual Property rights of any third Person, and since December 31, 2011,2017, no Person has asserted in writing that Purchaser or any of its Subsidiaries has materially infringed, misappropriated or otherwise violated any third Person’s Intellectual Property rights. To Purchaser’s Knowledge, no third Person has infringed, misappropriated or otherwise violated any of Purchaser’s or any of its Subsidiary’s rights in the Owned Intellectual Property.

(c)    Purchaser and each of its Subsidiaries has taken reasonable measures to protect (A)(i) their rights in their respective Owned Intellectual Property and (B)(ii) the confidentiality of all Trade Secrets that are owned, used or held by Purchaser or any of its Subsidiaries, and to Purchaser’s Knowledge, such Trade Secrets have not been used, disclosed to or discovered by any Person except pursuant to appropriatenon-disclosure agreements which have not been breached. To Purchaser’s Knowledge, no Person has gained unauthorized access to Purchaser’s or its Subsidiaries’ IT Assets.

(d)    Purchaser’s and each of its Subsidiaries’ respective IT Assets operate and perform in all material respects as reasonably required by Purchaser and each of its Subsidiaries in connection with their respective businesses and have not materially malfunctioned or failed within the past two years. To Purchaser’s Knowledge, Purchaser and each of its Subsidiaries has implemented reasonable backup, security and disaster recovery technology and procedures consistent with industry practices. To Purchaser’s Knowledge, Purchaser and each of its Subsidiaries is compliant with their own privacy policies and commitments to their respective customers, consumers and employees, concerning data protection and the privacy and security of personal data and the nonpublic personal information of their respective customers, consumers and employees.

4.15Properties. Either Purchaser or one of its Subsidiaries (a) has good and, as to real property, marketable title to all the material properties and assets reflected in either the latest audited balance sheet or latest interim balance sheet included in the Financial Statements as being owned by either Purchaser or one of its Subsidiaries or acquired after the date thereof (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business consistent with past practice) (the “Owned Properties”), free and clear of all Liens of any nature whatsoever, except (i) statutory Liens securing payments not yet due or which are being contested in good faith for which adequate reserves have been taken, (ii) Liens for real property Taxes not yet due and payable, (iii) easements, rights of way, and other similar encumbrances that do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties and (iv) such imperfections or irregularities of title or Liens as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (collectively, “Permitted Encumbrances”), and (b) is the lessee of all leasehold estates reflected in either the Financial Statements or acquired after the date thereof (except for leases that have expired by their terms since the date thereof) (collectively with the Owned Properties that constitute real property, the “Real Property”), free and clear of all Liens of any nature whatsoever, except for Permitted Encumbrances, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to Purchaser’s Knowledge, the lessor. There are no pending or, to Purchaser’s Knowledge, threatened (in writing) condemnation proceedings against the Real Property.

4.16Insurance. Purchaser and its Subsidiaries are insured with insurers believed by Purchaser to be reputable insurers against such risks and in such amounts as the management of Purchaser reasonably has determined to be prudent and consistent with industry practice. Purchaser and its Subsidiaries are in compliance in all material respects with their insurance

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policies and are not in default under any of the terms thereof. Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employees of Purchaser and its Subsidiaries, Purchaser or the relevant Subsidiary thereof is the sole beneficiary of such policies, and all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.

4.17Accounting and Internal Controls.

(a)    The records, systems, controls, data and information of Purchaser and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of Purchaser or its Subsidiaries or accountants (including all means of access thereto and therefrom), except for anynon-exclusive ownership andnon-direct control that would not reasonably be expected to have a material adverse effectMaterial Adverse Effect on the system of internal accounting controls described in the following sentence. Purchaser and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Purchaser has designed and implemented disclosure controls and procedures (within the meaning of Rules13a-15(e) and15d-15(e) of the Exchange Act) to ensure that material information relating to Purchaser and its Subsidiaries is made known to its management by others within those entities as appropriate to allow timely decisions regarding required disclosure and to allow it to make certifications that would be required by the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act, if applicable.

(b)    Purchaser’s management completed an assessment of the effectiveness of its internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the years ended December 31, 20142020 and 2015,2021, and such assessments concluded that such controls were effective. Purchaser has previously disclosed, based on its most recent evaluation prior to the date hereof, to its auditors and the audit committee of its Board of Directors, and has described in Section 4.17(b) of the Purchaser Disclosure Schedule: (A)(i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting and (B)(ii) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls over financial reporting.

(c)    Since December 31, 2011 (A) neither2017, (i) none of Purchaser noror any of its Subsidiaries nor,or, to Purchaser’s Knowledge, any director, officer, auditor, accountant or representative of itPurchaser or any of its Subsidiaries has received or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or written claim regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals) of Purchaser or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or written claim that Purchaser or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (B)(ii) no attorney representing Purchaser or any of its Subsidiaries, whether or not employed by it or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by it or any of its officers or directors to its Board of Directors or any committee thereof or to any of its directors or officers.

4.18Ownership of Company Common Shares. As of the date hereof, neither Purchaser nor any of its affiliates (i) beneficially owns, directly or indirectly, any Company Common Shares, (ii)(a) is a party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, any Company Common Shares, (iii)(b) is not now, noror at any time within the last three years has been, an “interested shareholder”, as such term is defined in Section 1704.01 of the OGCL,Ohio General Corporation Law, or (iv)(c) is a “Related“Controlling Person”, as such term is defined in Article SEVENTHTENTH of the Company Articles.

4.19Opinion. The Board of Directors of Purchaser has received the opinion of Boenning & Scattergood, Inc., to the effect that, as of the date of such opinion, based upon and subject to the factors and assumptions set forth therein, the Merger Consideration is fair from a financial point of view to Purchaser.

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4.20Available Funds. Purchaser has cashand Purchaser Bank have and, immediately prior to the Effective Time, Merger Sub will have, cash sufficient to pay or cause to be deposited into the Exchange Fund the aggregate amount of cash as required pursuant to Section 2.2.

ARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1Conduct of Businesses Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time, (a) each of Company and Purchaser shall, and shall cause each of its respective Subsidiaries to, (i) conduct its business in the ordinary course consistent with past practice in all material respects and (ii) use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships, and (b) each of Company and Purchaser shall, and shall cause each of its respective Subsidiaries to, take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Company or Purchaser to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby.

5.2Company Forbearances. Except as otherwise specifically permitted or required by this Agreement, during the period from the date of this Agreement to the Effective Time or termination of this Agreement in accordance with the terms hereof, Company shall not, and shall not permit any of its SubsidiariesCompany Bank to, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed):

(a)    (i)    Issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional common shares or other equity interest, Voting Debt or Equity Rights, or (ii) grant, award or issue any Company stock options, restricted units, stock appreciation rights, restricted stock, awards based on the value of Company’s capital stock, or other equity-based award with respect to shares of the Company Common Shares under any of the Company Benefit Plans or otherwise.the Company Stock Plans, or otherwise, except in the case of clause (i) hereof only, for issuances of Company Common Shares with respect to the regular vesting of plan share awards under the Company Stock Plans which are outstanding as of the Company Capitalization Date;

(b)    (i)    Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock (other than regular semi-annualquarterly dividends not exceeding $1.00$0.31 per Company Common Share, regular semi-annual dividends on the Company Preferred Shares and dividends from its wholly-owned SubsidiariesCompany Bank to it,Company), or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock.capital stock, except that Company may redeem, purchase, withhold or otherwise acquire Company Common Shares as payment for withholding taxes in connection with the vesting of Company Restricted Shares;

(c)    Amend the terms of, waive any rights under, terminate, knowingly violate the terms of, or enter into, (i) any contract or other binding obligation other than in the ordinary course of business consistent with past practice, (ii) any contract or (ii)other binding obligation that cannot be canceled without penalty, or (iii) any contract or other binding obligation of the sort specified in Section 3.16(a)(iv), (vi), (vii), (viii), (ix), (x), (xiii) or (xiv).;

(d)    Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for the MWG Disposition and any sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments, or other dispositions or discontinuances in the ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, is not material to it and its Subsidiaries,Company Bank, taken as a whole.whole;

(e)    Acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business consistent with past practice) all or any portion of the assets, business, deposits or properties of any other entity.entity;

(f)    Amend the Company Articles or the Company Regulations,Bylaws, or similar governing documents of any of its Significant Subsidiaries.Company Bank;

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(g)    Implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements or any Regulatory Agency responsible for regulating Company.Company;

(h)    Except as required under applicable Law or the terms of any Company Benefit Plan existing as of the date hereof, (i) increase in any manner the compensation, severance or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Company or its SubsidiariesCompany Bank (collectively, “Employees”), other than increases in base salary to Employees in the ordinary course consistent with past practice, which shall not exceed 1.5%3.0% in the aggregate or 3%5.0% for any individual to Employees (in each case, on an annualized basis), (ii) except as set forth on Section 5.2(h) of the Company Disclosure Schedule, other than the payment of incentive compensation to Employees in the ordinary course consistent with past practice, Company’s annual incentive plan, and financial statement accruals,, pay or award, or commit to pay or award, any bonuses or incentive compensation, (iii) become a party to, establish, amend, alter prior interpretations of, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Employee (or newly hired Employee), (iv) accelerate the vesting or lapsing of restrictions with respect to any stock-based incentive compensation, other than as expressly contemplated by the provisions of Section 1.5(a) and subsections (a) and (c) of Section 6.5, (v) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (v)(vi) change any actuarial assumptions used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to such plansCompany Benefit Plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Law, or (vi)(vii) hire or terminate without cause the employment of any Employee who has (in the case of Employees to be terminated) or would have (in the case of Employees to be hired) target total compensation (base salary, target cash incentive and target equity) of $75,000$100,000 or more.more;

(i)    (i)    Take, or omit to take, any action that would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code, or (ii) except as may be required by applicable Law imposed by any Governmental Entity, (i)(A) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii)(B) take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.satisfied;

(j)    Incur or guarantee any indebtedness for borrowed money other than in the ordinary course of business consistent with past practice.practice;

(k)    Enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by Law or requested by a Regulatory Agency.Agency;

(l)    Other than in consultation with Purchaser, make any material change to (i) its investment securities portfolio, derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or (ii) the manner in which the portfolio is classified or reported, except as required by Law or requested by a Regulatory Agency.Agency;

(m)    Settle any action, suit, claim or proceeding against it, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $25,000$50,000 individually (oror $100,000 in the aggregate for all such actions, suits, claims)claims, and that would not (i) impose any restriction on the business of it or its Subsidiaries or (ii) create precedent for claims that is reasonably likely to be material to it or its Subsidiaries.Subsidiaries;

(n)    Make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility.facility;

(o)    Make or incur any capital expenditure in excess of $25,000 individually or $100,000 in the aggregate, except for Previously Disclosed binding commitments existing on the date hereof.hereof previously provided to Purchaser;

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(p)    Issue any written communication of a general nature to its employeesEmployees or customers without the prior approval of Purchaser (which will not be unreasonably delayed or withheld), except for communications in the ordinary course of business that do not relate to the Merger or other transactions contemplated hereby.hereby;

(q)    Make or change any material Tax elections, change or consent to any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax Law), enter into any structured transaction outside of its regular course of business, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.Return;

(r)    Except (i) for Loans or legally binding commitments for Loans that have previously been approved by Company prior to the date of this Agreement, make or acquire any Loan or issue a commitment (or renew or extend an existing commitment) for any Loan, or amend or modify in any material respect any existing Loan, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $200,000,$1,500,000, (ii) with respect to amendments or modifications that have previously been approved by Company prior to the date of this Agreement, amend or modify in any material respect any existing Loan rated “special mention” or below by Company with total credit exposure in excess of $200,000$1,500,000, or (iii) with respect to any such actions that have previously been approved by Company prior to the date of this Agreement, modify or amend any Loan in a manner that would result in any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral i.e., at a value below the fair market value thereof as determined by Company, in each case in excess of $300,000.$1,000,000; or

(s)    Agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section  5.2.

5.3Purchaser Forbearances. Except as expressly permitted by this Agreement or with the prior written consent of Company (which shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement to the Effective Time or the termination of this Agreement in accordance with the terms hereof, Purchaser shall not, and shall not permit any of its Subsidiaries to:

(a)    Take, or omit to take, any action that would, or could reasonably be expected to, prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code, or, except as may be required by applicable Law imposed by any Governmental Entity, (i) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Agreement, or (ii) take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied.satisfied;

(b)     Agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.3.5.3; or

(c)    Make or change any material Tax elections, change or consent to any change in it or its Subsidiaries’ method of accounting for Tax purposes (except as required by applicable Tax Law), enter into any structured transaction outside of its regular course of business, settle or compromise any material Tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of Taxes, surrender any right to claim a refund for a material amount of Taxes, or file any material amended Tax Return.

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ARTICLE VI

ADDITIONAL AGREEMENTS

6.1Regulatory Matters.

(a)    Purchaser shall promptly prepare and file with the SEC, and Company shall use its commercially reasonable efforts to cooperate in the preparation of, the FormS-4, in which the Proxy Statement will be included as a prospectus. Purchaser shall use its commercially reasonable efforts to file the Form S-4 within 60 days of the date herewith and have the FormS-4 declared effective under the Securities Act as promptly as practicable after such filing, and Company shall thereafter mail or deliver the Proxy Statement to Company shareholders. Purchaser shall also use its commercially reasonable efforts to obtain all necessary state securities Law or “Blue Sky” permits and approvals required to carry out the transactions contemplated by this Agreement, and Company shall furnish all information concerning Company and the holders of Company Common Shares as may be reasonably requested in connection with any such action.

(b)    The parties shall cooperate with each other and use their respective commercially reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and Governmental Entities that are necessary or advisable to consummate the transactions contemplated by this Agreement (including the Merger and the Bank Merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such third parties or Governmental Entities. Purchaser Bank will prepare and, within 60 days of the date herewith, use commercially reasonable efforts to file an Interagency Bank Merger Act Application with the OCC. Each of Company and Purchaser shall have the right to review in advance, and, to the extent practicable, each will consult the other on, in each case subject to applicable Laws, all of the information relating to Company or Purchaser, as the case may be, and any of theirits respective Subsidiaries, that appear in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement.Agreement, and each of Company and Purchaser shall, to the extent practicable consult with each other on all the information relating to it or its respective Subsidiaries that appear in any such filing or written materials. In exercising the foregoing, right, each of the parties shall act reasonably and as promptly as practicable. The parties shall consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated by this Agreement. Each party shall consult with the other in advance of any meeting or conference with any Governmental Entity and to the extent permitted by such Governmental Entity, give the other party and/or its counsel the opportunity to attend and participate in such meetings and conferences. Notwithstanding anything contained herein to the contrary, in no event shall the foregoing or any other provision of this Agreement require Purchaser or Company to take or commit to take any actions in connection with obtaining such consents, approvals and authorizations, or agree to or suffer any condition or restriction on Purchaser, Company or the Surviving Corporation in connection therewith, that would or could reasonably be expected to have a material adverse effectMaterial Adverse Effect (measured on a scale relative to Company) on Purchaser or Company.

(c)    Each of Purchaser and Company shall, upon request, furnish to the other all information concerning itself, its Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with the Proxy Statement, the FormS-4 or any other statement, filing, notice or application made by or on behalf of Purchaser, Company or any of their respective Subsidiaries to any Governmental Entity in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement. Each of Purchaser and Company agrees, as to itself and its Subsidiaries, that none of the information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the FormS-4 will, at the time the FormS-4 and each amendment or supplement thereto, if any, becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be

stated therein or necessary to make the statements therein not misleading and (ii) the Proxy Statement and any amendment or supplement thereto will, at the date of mailing to shareholders and at the time of the Company Shareholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) the Proxy Statement and any

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amendment or supplement thereto will, at the date of mailing to shareholders and at the time of the Company Shareholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which such statement was made, not misleading. Each of Purchaser and Company further agrees that if it becomes aware that any information furnished by it would cause any of the statements in the FormS-4 or the Proxy Statement to be false or misleading with respect to any material fact, or to omit to state any material fact required to be stated therein or necessary to make the statements therein not false or misleading, to promptly inform the other party thereof and to take appropriate steps to correct the FormS-4 or the Proxy Statement.

(d)    Each of Purchaser and Company shall promptly advise the other upon receiving any communication from any Governmental Entity the consent or approval of which is required for consummation of the transactions contemplated by this Agreement that causes such party to believe that there is a reasonable likelihood that any Requisite Regulatory Approval will not be obtained or that the receipt of any such approval may be materially delayed.

6.2Access to Information.

(a)    Upon reasonable notice and subject to applicable Laws, Company shall, and shall cause each of its SubsidiariesCompany Bank to, afford to the officers, employees, accountants, counsel, advisors, agents and other representatives of Purchaser, reasonable access, during normal business hours during the period prior to the Effective Time, to all its properties, books, contracts, commitments and records, and, during such period, Company shall, and shall cause its SubsidiariesCompany Bank to, make available to Purchaser (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities Laws or federal or state banking or insurance Laws (other than reports or documents that Company is not permitted to disclose under applicable Law); and (ii) all other information concerning its business, properties and personnel as Purchaser may reasonably request, including periodic updates of the information provided in Section 3.26. Purchaser shall use commercially reasonable efforts to minimize any interference with Company Bank’s regular business operations during any such access to the properties, books, contracts, commitments and records of Company and Company Bank. Upon the reasonable request of Company, Purchaser shall furnish such reasonable information about it and its business as is relevant to Company and its shareholders in connection with the transactions contemplated by this Agreement. Neither Company nor Purchaser, nor any of their Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would jeopardize the attorney-client privilege of such party or its Subsidiaries or contravene any Law, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties shall make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply.

(b)    All nonpublic information and materials provided pursuant to this Agreement shall be subject to the provisions of the confidentiality obligations reflected by the letter of intent entered into between Purchaser and Company dated as of February 13, 2017 (theDecember 21, 2021, and the confidentiality agreement entered into between Purchaser and Company dated November 12, 2021 (collectively, the “Confidentiality Agreement”).

(c)    No investigation by a party hereto or its representatives shall affect or be deemed to modify or waive any representations, warranties or covenants of the other party set forth in this Agreement.

6.3Shareholder Approval. The Board of Directors of Company has resolved to recommend to Company’s shareholders that they approve this Agreement and will submit to its shareholders this Agreement and any other matters required to be approved by its shareholders in order to carry out the intentions of this Agreement. In furtherance of that obligation, Company will take, in accordance with applicable Law and the Company Articles and the Company Code,Bylaws, all action necessary to convene a meeting of its shareholders (“Company Shareholders’Shareholders’ Meeting”), to be held as promptly as practicable after Purchaser has obtained the SEC’s

declaration of effectiveness of the FormS-4, to consider and vote upon approval of this Agreement. Company agrees that its obligations pursuant to this Section 6.3 shall not be affected by the commencement, public proposal, public disclosure or communication to Company of any Acquisition Proposal or Change in the Company Recommendation. Subject to the provisions of Section 6.7, Company shall, through its Board of Directors, recommend to its shareholders the approval and adoption of this Agreement (the “CompanyRecommendation”), and shall use its best efforts to obtain from its shareholders the

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requisite affirmative vote of (i) the holders of not less than a majority of the issued and outstanding Company Common Shares and (ii) the holders of not less than a majority of the issued and outstanding Company Common Shares who are not officers, directors or affiliates of the Company (collectively, theto approve this Agreement (the “Company Shareholder Approval”)., including, if necessary, adjourning the Company Shareholders’ Meeting if there are insufficient votes to approve this Agreement to allow additional time to attain the Company Shareholder Approval. Notwithstanding any Change in the Company Recommendation, this Agreement shall be submitted to the shareholders of Company at the Company Shareholders’ Meeting for the purpose of obtaining the Company Shareholder Approval and nothing contained herein shall be deemed to relieve Company of such obligation so long as Purchaser has obtained the SEC’s declaration of effectiveness of the FormS-4;provided,however, that if the Board of Directors of Company shall have effected a Change in the Company Recommendation permitted hereunder, then the Board of Directors of Company shall submit this Agreement to Company’s shareholders without the recommendation of thethis Agreement (although the resolutions adopting this Agreement as of the date hereof may not be rescinded or amended), in which event the Board of Directors of Company may communicate the basis for its lack of a recommendation to Company’s shareholders in the Proxy Statement or an appropriate amendment or supplement thereto to the extent required by applicable Law;provided that, for the avoidance of doubt, Company may not take any action under this sentence unless it has complied with the provisions of Section 6.7. In addition to the foregoing, except as provided in Section 6.7, neither Company nor its Board of Directors of Company shall recommend to its shareholders or submit to the vote of its shareholders any Acquisition Proposal other than the Merger. Except as set forth in Section 6.7, neither the Board of Directors of Company nor any committee thereof shall withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Purchaser, the Company Recommendation or take any action, or make any public statement, filing or release inconsistent with the Company Recommendation (any of the foregoing being a “Change in the Company Recommendation”).

6.4Nasdaq Listing; Reservation of Purchaser Common Shares.

(a)    Purchaser shall cause the Purchaser Common Shares to be issued in the Merger to have been authorized for listing on the Nasdaq, subject to official notice of issuance prior to the Effective Time.

(b)    Purchaser agrees at all times from the date of this Agreement to reserve a sufficient number of Purchaser Common Shares to fulfill its obligations under this Agreement, including payment of the Merger Consideration.

6.5Employee Matters; Advisory Board.

(a)    As soon as administratively practicable afterAt or prior to the Effective Time, Purchaser shall take all reasonable action so that employeesEmployees of Company and its Subsidiaries shall be entitled to participate in each benefit plan of Purchaser Benefit Planor its Subsidiaries of general applicability with the exception of any plan frozen to new participants (collectively, the “Purchaser Eligible Plans”) to the same extent as similarly-situated employees of Purchaser and its Subsidiaries, it being understood that inclusion of the employeesEmployees of Company and its Subsidiaries in the Purchaser Eligible Plans may occur at different times with respect to different plans, plans; provided that coverage shall be continued under corresponding Company Benefit Plans until such employeesEmployees are permitted to participate in the Purchaser Eligible Plans and Plans; provided further however,, that nothing contained in this Agreement shall require Purchaser or any of its Subsidiaries to make any grants to any former employee of Company or any of its Subsidiaries under any discretionary equity compensation plan of Purchaser or to provide the same level of (or any) employer contributions or other benefit subsidies as Company or its Subsidiaries. Purchaser shall cause each Purchaser Eligible Plan in which employeesEmployees of Company and its Subsidiaries are eligible to participate, to recognize, for purposes of determining eligibility to participate in, and vesting of, benefits under the Purchaser Eligible Plans,

the service of such employeesEmployees with Company and its Subsidiaries to the same extent as such service was credited for such purpose by Company or its Subsidiaries, and, solely for purposes of Purchaser’s vacation, paid time off and severance programs, for purposes of determining the benefit amount, amount; provided, however, that such service shall not be recognized to the extent that such recognition would result in a duplication of benefits. Except for the commitment to continue those Company Benefit Plans that correspond to Purchaser Eligible Plans until employeesEmployees of Company and its Subsidiaries are included in such Purchaser Eligible Plans, and subject to subsections (c) and (h) of this Section 6.5, nothing in this Agreement shall limit the ability of Purchaser to amend or terminate any of the Company Benefit Plans in accordance with and to the extent permitted by their terms at any time permitted by such terms.

(b)    The Company shall pay on the last business day preceding the Closing Date all change in control payments provided under each of the employment and change in control agreements listed in Section 3.11(a) of the Company Disclosure Schedule as if the employment of each of the officers covered by such agreements had terminated as of the Effective Time, unless such agreement is superseded by a subsequent agreement between Company and such officer in which case any payments to such officers will be made in accordance with such superseding agreement. Each such payment shall be conditioned on the recipient providing the Company with a complete release to the Company’s and Purchaser’s reasonable satisfaction in exchange for receiving the change in control payment. Section 6.5(b) to the Company Disclosure Schedule sets forth the payments to be made under the employment or change in control agreements, or SERPs.

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(b)(c)    At and following the Effective Time, and except as otherwise provided in Section 6.5(e), Purchaser shall honor, and the Surviving Company shall continue to be obligated to perform, in accordance with their terms, all benefit obligations to, and contractual rights of, current and former employees of CompanyEmployees and its Subsidiaries and current and former directors of Company and its SubsidiariesCompany Bank existing as of the Effective Date under any Company Benefit Plan including anyother than the written employment and change in control and severance agreements listed onin Section 3.11(a) of the Company Disclosure Schedule to the extent each such agreement is not superseded by a subsequent agreement between Purchaser and such employee. Any years of service recognized for purposes of this Section 6.5 will be taken into account under the terms of any generally applicable severance policy of Purchaser or its Subsidiaries.Schedules.

(c)(d)    At such time as employeesEmployees of Company and its Subsidiaries become eligible to participate in a medical, dental or health plan of Purchaser or its Subsidiaries, Purchaser shall, to the extent reasonably practicable and available from its insurers, cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health or dental plans of Purchaser, and (ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to such employee or dependent on or after the Effective Time to the extent such employee or dependent had satisfied any similar limitation or requirement under an analogous Company Benefit Plan prior to the Effective Time.Time, and (iii) provide each such employee or dependent with credit for any co-payments or co-insurance and deductibles paid during the same plan year under an analogous Company Benefit Plan (to the same extent that such credit was given under the analogous Company Benefit Plan during the applicable plan year).

(d)(e)    Company or Company Bank, as the case may be, shall adopt such resolutions of its Board of Directors and take such other action as Purchaser may reasonably request to cause the Farmers National Bank of Emlenton 401(k) Plan (the “Company 401(k) Plan”) to be (i) amended immediately prior to the Effective Time, if and to the extent necessary, to update the Company 401(k) Plan to comply with all changes in the Law and any plan qualification requirements applicable to the Company 401(k) Plan at such time, and (ii) terminated immediately prior to the Effective Time (the “Plan Termination Date”) and the accounts of all participants and beneficiaries in the Company 401(k) Plan as of the Plan Termination Date to become fully vested as of the Plan Termination Date. As soon as practicable after the Effective Time, but in no event later than one year after the Plan Termination Date, the account balances in the Company 401(k) Plan shall be distributed to participants and beneficiaries or transferred to an eligible tax-qualified retirement plan or individual retirement account as a participant or beneficiary may direct. After the Effective Time, the Surviving Company shall take all other actions necessary to complete the termination of the Company 401(k) Plan, including filing a final Form 5500. Purchaser agrees, to the extent permitted by applicable Law, to permit Company 401(k) Plan participants who

become employees of Purchaser and its Subsidiaries to roll over their account balances in the Company 401(k) Plan and loans from the Company 401(k) Plan to Purchaser’s 401(k) Plan. Notwithstanding anything in Section 6.5(c) to the contrary, Employees of Company or its Subsidiaries who continue in employment with the Surviving Company following the Effective Time shall be eligible as of the Effective Time to participate in the Purchaser’s 401(k) Plan.

(f)    Immediately prior to the Effective Time, Company shall, at the written request of Purchaser, freeze or terminate each Company Benefit Plan as is requested by Purchaser. Prior to the Effective Time, Company shall take appropriate corrective action, acceptable to Purchaser, with regard to any plan deficitdefect described inon Section 3.11(c) of the Company Disclosure Schedule.

(e)(g)    Without limiting the generality of Section 9.10, the provisions of this Section 6.5 are solely for the benefit of the parties to this Agreement, and no current or former Employee or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement.Agreement, except for certain Company employees under Section 6.5(h). In no event shall the terms of this Agreement be deemed to (i) establish, amend, or modify any Company Benefit Plan or any “employee benefit plan” as defined in Section 3(3) of ERISA, or any other benefit plan, program, agreement or arrangement maintained or sponsored by Purchaser, Company or any of their respective affiliates; (ii) alter or limit the ability of Purchaser or any of its Subsidiaries (including, after the Closing Date, Company and its Subsidiaries) to amend, modify or terminate any Company Benefit Plan, employment agreement or any other benefit or employment plan, program, agreement or arrangement after the Closing Date;Date, subject to subsections (c) and (h) of this Section 6.5; or (iii) to confer upon any current or former Employee, any right to employment or continued employment or continued service with Purchaser or any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries), or constitute or create an employment or other agreement with any Employee.

(f)(h)    Any employee of Company or its Subsidiaries who is not subject to a written employment, separation, or separationchange in control agreement and whose employment is terminated at or within six months following the Effective Time, whether because such employee’s position is eliminated or such employee is not offered or retained in comparable employment (a “Covered Employee”), will be entitled to receive a severance payment in an amount equal to two (2) weeks of such employee’s current base pay for each full year of such employee’s service with Company, withsubject to a minimum benefit of four (4) weeks’ pay and a maximum benefit oftwenty-six (26) 26 weeks’ pay. Comparable employment shall include (i) job duties substantially comparable to the Covered Employee’s current duties with the Company and its Subsidiaries, (ii) compensation at a salary or base compensation rate at least equal to the Covered Employee’s current salary or base compensation rate from the Company and its Subsidiaries, and (iii) a primary job location that does not require the Covered Employee to commute after the Effective Time more than 30 miles greater than the Covered Employee’s present commute. With respect to Covered Employees who are part-time employees, “base pay” means such Covered Employee’s routinely scheduled number of hours per week at the time of the execution of the Agreement multiplied by such Covered Employee’s hourly rate of pay. This severance payment, if applicable, will be paid by Purchaser in lieu of participation by a Covered Employee in Purchaser’s severance plan as in effect from time to time after the Effective Time. For the avoidance of doubt, for the purposes of determining the level of severance benefits hereunder, each Covered Employee shall be credited for service with Company only as provided in this Section 6.5.6.5(h).

(i)    Purchaser shall offer employment, effective immediately after the Effective Time, to William C. Marsh as Senior Vice President of Purchaser and Market President, Pennsylvania, of Purchaser Bank generally in accordance with the terms and conditions set forth in Purchaser Disclosure Schedule Section 6.5(i).

(j)    Promptly following the Effective Time, Purchaser will establish the Farmers-Emlenton Advisory Board and offer membership thereon to all non-employee directors serving on the Board of Directors of Company immediately prior to the Effective Time other than the director appointed to Purchaser’s Board of Directors in accordance with Section 6.16 hereof. Members of the Farmers-Emlenton Advisory Board shall serve for an initial term of one year from the Effective Time of the Merger, will meet no less frequently than three times annually, and will be paid compensation of $1,500 for each meeting attended.

6.6Indemnification; Directors’ and Officers’ Insurance.

(a)    From and after the Effective Time, the Surviving Company and Purchaser shall indemnify and hold harmless, to the full extent provided under the Company Articles, and the Company RegulationsBylaws, and any indemnification agreement between Company and any officer or director existing on March 21, 2022 (including advancement of expenses as incurred) to the extent permitted under applicable Law, including specifically 12 C.F.R. Part 359, each present and former director and officer (determinedof Company and Company Bank as of the Effective Time) of Company and its

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SubsidiariesTime (in each case, when acting in such capacity) (collectively, the(each, an “Indemnified PartiesParty”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted before or after the Effective Time, including the transactions contemplated by this Agreement;provided that the Indemnified Party to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Indemnified Party is not entitled to indemnification.

(b)    Subject to the following sentence, for a period of six years following the Effective Time, Purchaser will use its commercially reasonable efforts to provide director’sdirectors’ and officer’sofficers’ liability insurance that serves to reimburse the present and former officers and directors of Company or any of its Subsidiaries (determined as of the Effective Time)Time with respect to claims against such directors and officers arising from facts or events occurring at or before the Effective Time (including the transactions contemplated by this Agreement), which insurance will contain at least the same coverage and amounts, and contain terms and conditions no less advantageous to the Indemnified Party as that coverage currently provided by Company;provided that in no event shall Purchaser be required to expend, on an annual basis, an amount in excess of 150%175% of the annual premiums paid as of the date hereof by Company for any such insurance (the “Premium Cap”);provided, further, that if any such annual expense at any time would exceed the Premium Cap, then Purchaser will cause to be maintained policies of insurance which provide the maximum coverage available at an annual premium equal to the Premium Cap. At the option of Purchaser, in consultation with Company, prior to the Effective Time and in lieu of the foregoing, Purchaser or Company may purchase a tail policy for directors’ and officers’ liability insurance on the terms described in the prior sentence (including subject to the Premium Cap) and fully pay for such policy prior to the Effective Time.

(c)    Any Indemnified Party wishing to claim indemnification under Section 6.6(a), upon learning of any claim, action, suit, proceeding or investigation described above,thereunder, will promptly notify Purchaser;provided that failure to so notify will not affect the obligations of Purchaser under Section 6.6(a) unless and to the extent that Purchaser is actually prejudiced as a consequence.

(d)    The provisions of this Section 6.6 shall survive the Effective Time and are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her heirs and representatives. If Purchaser or any of its successors or assigns shall consolidate with or merge into any other entity and shall not be the continuing or surviving entity of such consolidation or merger or shall transfer all or substantially all of its assets to any other entity, then and in each case, proper provision shall be made so that the successors and assigns of Purchaser shall assume the obligations set forth in this Section 6.6.

6.7No Solicitation.

(a)    Except as set forth in Section 6.7(b), none of Company nor any of its Subsidiaries shall, and each of them shall cause its respective officers, directors, employees, agents, investment bankers, financial advisors, attorneys, accountants and other retained representatives (each a “Representative”) not to, directly or indirectly (i) solicit, initiate, encourage, knowingly facilitate (including by way of providing information) or induce any inquiry, proposal or offer with respect to, or the making or completion of, any Acquisition Proposal, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal, (ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person or “group” (as such

term is defined in Section 13(d) under the Exchange Act) any confidential or nonpublic information with respect to or in connection with, an Acquisition Proposal, (iii) take any other action to knowingly facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to an Acquisition Proposal, (iv) approve, endorse or recommend, or propose to approve, endorse or recommend any Acquisition Proposal or any agreement related thereto, (v) enter into any agreement contemplating or otherwise relating to any Acquisition Transaction or Acquisition Proposal (other than any confidentiality agreement required by Section 6.7(b)), (vi) enter into any agreement or agreement in principle requiring, directly or indirectly, Company to

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abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder, or (vii) propose or agree to do any of the foregoing.

(b)    Notwithstanding anything to the contrary in Section 6.7(a), if Company or any of its Representatives receives an unsolicited bona fide written Acquisition Proposal by any Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) that did not result from or arise in connection with a breach of this Section 6.7 at any time prior to the Company Shareholders’ Meeting that the Board of Directors of Company has determined, in its good faith judgment (after consultation with Company’s financial advisors and outside legal counsel) to constitute or to be reasonably likely to result in a Superior Proposal, Company and its Representatives may take any action described in Section 6.7(a)(ii) above to the extent that the Board of Directors of Company has determined, in its good faith judgment (after consultation with Company’s outside legal counsel), that the failure to take such action would cause itbe reasonably likely to violate its fiduciary duties under applicable Law;provided, that, prior to taking any such action, Company has obtained from such Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) an executed confidentiality agreement containing terms substantially similar to, and no less favorable to Company than, the terms of the Confidentiality Agreement.

(c)    As promptly as practicable (but in no event more than 2448 hours) following receipt of any Acquisition Proposal or any request for nonpublic information or inquiry that would reasonably be expected to lead to any Acquisition Proposal, Company shall advise Purchaser in writing of the receipt of any Acquisition Proposal, request or inquiry and the terms and conditions of such Acquisition Proposal, request or inquiry, shall promptly provide to Purchaser a copy of the Acquisition Proposal, request or inquiry (including the identity of the Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) making the Acquisition Proposal) and shall keep Purchaser promptly apprised of any related developments, discussions and negotiations (including providing Purchaser with a copy of all material documentation and correspondence relating thereto) on a current basis. Company agrees that it shall immediatelyconcurrently provide to Purchaser any information concerning Company that may be provided (pursuant to Section 6.7(b)) to any other Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) in connection with any Acquisition Proposal which has not previously been provided to Purchaser.

(d)    Notwithstanding anything herein to the contrary, at any time prior to the Company Shareholders’ Meeting, the Board of Directors of Company may withdraw its recommendation of the Merger Agreement, thereby resulting in a Change in the Company Recommendation, if and only if (x) from and after the date hereof, Company has complied with Sections 6.3 and 6.7, and (y) the Board of Directors of Company has determined in good faith, after consultation with Company’s outside legal counsel, that the taking of such action is reasonably necessary in order for the Board of Directors of Company to comply with its fiduciary duties under applicable Law;provided, that the Board of Directors of Company may not effect a Change in the Company Recommendation unless:

(1)(i)    Company shall have received an unsolicited bona fide written Acquisition Proposal and the Board of Directors of Company shall have concluded in good faith (after consultation with Company’s financial advisors and outside legal counsel) that such Acquisition Proposal is a Superior Proposal, after taking into account any amendment or modification to this Agreement agreed to or proposed by Purchaser;

(2)

(ii)    Company shall have provided prior written notice to Purchaser at least five (5) Business Daysthree business days in advance (the “Notice Period”) of taking such action, which notice shall advise Purchaser that the Board of Directors of Company has received a Superior Proposal, specify the material terms and conditions of such Superior Proposal (including the identity of the Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) making the Superior Proposal);

(3)(iii)    during the Notice Period, Company shall, and shall cause its financial advisors and outside counsel to, negotiate with Purchaser in good faith (to the extent Purchaser desires to so negotiate) to make such adjustments in the terms and conditions of this Agreement so that such Superior Proposal ceases to constitute a Superior Proposal; and

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(4)(iv)    the Board of Directors of Company shall have concluded in good faith (after consultation with Company’s financial advisors and outside legal counsel) that, after considering the results of such negotiations and giving effect to any proposals, amendments or modifications offered or agreed to by Purchaser, if any, that such Acquisition Proposal continues to constitute a Superior Proposal.

If during the Notice Period any revisions are made to the Superior Proposal and such revisions are material, Company shall deliver a new written notice to Purchaser and shall again comply with the requirements of this Section 6.7(d) with respect to such new written notice, except that the new Notice Period shall be two (2) Business Days.business days. In the event the Board of Directors of Company does not make the determination referred to in clause (4)(iv) of this paragraph and thereafter seeks to effect a Change in the Company Recommendation, the procedures referred to above shall apply anew and shall also apply to any subsequent Change in the Company Recommendation.

(e)    Company and its Subsidiaries shall, and shall cause their respective Representatives to, (i) immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any Persons conducted heretofore with respect to any Acquisition Proposal; (ii) request the prompt return or destruction of all confidential information previously furnished in connection therewith; and (iii) not terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement relating to any Acquisition Proposal to which it or Company or any of its Subsidiaries or RepresentativeRepresentatives is a party, and enforce the provisions of any such agreement.

(f)    Nothing contained in this Agreement shall prevent Company or its Board of Directors from making any disclosure to Company shareholders if Company’sthe Board of Directors of Company (after consultation with Company’s outside legal counsel) concludes that its failure to do so would cause it to violate its fiduciary duties under applicable Law;provided, that this Section 6.7(f) will in no way eliminate or modify the effect that any action taken pursuant hereto would otherwise have under this Agreement.

(g)    As used in this Agreement:

(i)    “Superior Proposal”means any bona fide written Acquisition Proposal with respect to which the Board of Directors of Company determines in its good faith judgment to be more favorable to Company than the Merger, and to be reasonably capable of being consummated on the terms proposed, after (i)(A) receiving the advice of Company’s outside legal counsel and ProBank Austinfinancial advisor, and (ii)(B) taking into account all material relevant factors (including the likelihood of consummation of such transaction on the terms set forth therein;therein, any proposed changes to this Agreement that may be proposed by Purchaser in response to such Acquisition Proposal (whether or not during the Notice Period);, and all material legal (with the advice of Company’s outside legal counsel), financial (including the financing terms of any such proposal), regulatory and other aspects of such proposal (including any expense reimbursement provisions and conditions to closing));provided, that for purposes of the definition of “Superior Proposal,” the references to “15%“25%” and “85%“75%” in the definitions of Acquisition Proposal and Acquisition Transaction shall be deemed to be references to “50%”; and

(ii)    “Acquisition Proposal” means any proposal, offer, inquiry, or indication of interest (whether binding ornon-binding, and whether communicated to Company or publicly announced to Company’s shareholders) by any Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) (in each case other than Purchaser or any of its affiliates) relating to an Acquisition Transaction (as defined in Section 6.7(g)(iii)) involving Company or any of its present or future consolidated Subsidiaries, or any combination of such Subsidiaries; and

(iii)    “Acquisition Transaction” means any transaction or series of related transactions (other than the transactions contemplated by this Agreement) involving: (i)(A) any acquisition (whether direct or indirect, including by way of merger, share exchange, consolidation, business combination or other similar transaction) or purchase from Company by any Person or “group” (as such term is defined in Section 13(d) under the Exchange Act), other than Purchaser or any of its affiliates, of 15%25% or more in interest of the total outstanding voting securities of Company or any of its Subsidiaries (measured by voting power), or any

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tender offer or exchange offer that if consummated would result in any Person or “group” (as such term is defined in Section 13(d) under the Exchange Act), other than Purchaser or any of its affiliates, beneficially owning 15%25% or more in interest of the total outstanding voting securities of Company or any of its Subsidiaries (measured by voting power), or any merger, consolidation, share exchange, business combination or similar transaction involving Company pursuant to which the shareholders of Company immediately preceding such transaction would hold less than 85%75% of the equity interests in the surviving or resulting entity of such transaction (or, if applicable, the ultimate parent thereof) (measured by voting power); (ii)(B) any sale or lease or exchange, transfer, license, acquisition or disposition of a business, deposits or assets that constitute 15%25% or more of the consolidated assets, business, revenues, net income, assets or deposits of Company; or (iii)(C) any liquidation or dissolution of Company or any of its Subsidiaries.

(h)    Nothing contained in Section 6.7 shall prohibit Company or the Board of Directors of Company from complying with Company’s obligations under Rules 14d-9 and 14e-2 promulgated under the Exchange Act; provided, however, that any such disclosure relating to an Acquisition Proposal shall be deemed a Change in the Company Recommendation unless the Board of Directors of Company reaffirms the Company Recommendation in such disclosure.

6.8Takeover Laws. No party will take any action that would cause the transactions contemplated by this Agreement to be subject to requirements imposed by any Takeover LawLaws, and each of themparty to this Agreement will take all necessary steps within its control to exempt (or ensure the continued exemption of) those transactions from, or if necessary challenge the validity or applicability of, any applicable Takeover Law,Laws, as now or hereafter in effect.

6.9Financial Statements and Other Current Information. As soon as reasonably practicable after they become available, but in no event more than 15 days after the end of each calendar month ending after the date hereof, Company will furnish to Purchaser (a) consolidated financial statements (including balance sheets, statements of operations and stockholders’ equity) of Company or any of its Subsidiaries (to the extent available) as of and for such month then ended, (b) internal management reports showing actual financial performance against plan and previous period, and (c) to the extent permitted by applicable Law, any reports provided to Company’sthe Board of Directors of Company or any committee thereof relating to the financial performance and risk management of Company or any of its Subsidiaries.

6.10Notification of Certain Matters. Company and Purchaser will give prompt notice to the other of any fact, event or circumstance known to it that (a) individually or taken together with all other facts, events and circumstances known to it, has had or is reasonably likely to result in any Material Adverse Effect with respect to it or (b) would cause or constitute a material breach of any of its representations, warranties, covenants or agreements contained herein that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article VII.

6.11Shareholder Litigation. Company shall give Purchaser prompt notice of any shareholder litigation against Company and/or its directors or affiliates relating to the transactions contemplated by this Agreement and shall give Purchaser the opportunity to participate at its own expense in the defense and/or settlement of any such litigation. In addition, no settlement of any such settlementshareholder litigation shall be agreed to without Purchaser’s prior written consent (such consent not to be unreasonably withheld or delayed).

6.12Transition. Commencing following the date hereof, and in all cases subject to applicable Law, Company shall, and shall cause its SubsidiariesCompany Bank to, cooperate with Purchaser and its Subsidiaries to facilitate the integration of the parties and their respective businesses effective as of the Closing Date or such later date as may be determined by Purchaser. Without limiting the generality of the foregoing, from the date hereof through the Closing Date and consistent with the performance of theirday-to-day operations and the continuous operation of Company and its SubsidiariesCompany Bank in the ordinary course of business, Company shall cause the employees,Employees, officers and representativesRepresentatives of Company and its SubsidiariesCompany Bank to use their commercially reasonable efforts to provide support, including support from its outside contractors and vendors, as well as data and records access, take actions and assist Purchaser in performing all tasks, including conversion planning, assisting in any required divestiture, equipment installation and training, the provision of customer communications and notices (including joint communications and notices relating to anticipated account changes, branch closures, divestiture and/or systems conversion, it being agreed that any notices of branch closures need not be provided more than 90 days in advance of the anticipated Closing Date)conversion), and other matters reasonably required to result in a successful transition and integration at the Closing or such later date as may be determined by Purchaser.

Notwithstanding anything to the contrary herein, neither Company nor Company Bank shall be required to (i) terminate any third-party service provider arrangements prior to the Closing or (ii) take any action that may unreasonably and materially interfere with the business of Company or Company Bank or impede or delay the consummation of the Closing; and provided further, that in the event that Company or Company Bank takes, at the request of Purchaser, any action relative to third parties to facilitate the data processing conversion that results in the imposition of any fees or charges, Purchaser shall indemnify Company for any such fees and charges, and the costs of reversing the conversion process in the event of a termination of this Agreement by Company under Section 8.1(d) or 8.1(f). In addition, notwithstanding any other provisions of this Agreement, neither Purchaser nor Merger Sub shall be permitted under any circumstances be permitted to exercise control over Company or Company Bank prior to the Effective Time.

6.13    Voting Agreements. Company shall deliver on the date of this Agreement an executed Voting Agreement, in the form attached to this Agreement as Exhibit B, (the “Voting Agreement”), from all members of Company’s Board of Directors and its named executive officers (as such term is defined in 17 CFR § 229.402).

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6.136.14    Tax Representation Letters.Letters. Officers of Purchaser and Company shall execute and deliver to Vorys, Sater, Seymour and Pease LLP, tax counsel to Purchaser, and Critchfield, CritchfieldSilver, Freedman, Taff  & Johnston, Ltd.,Tiernan LLP, tax counsel to Company, “Tax Representation Letters” substantially in the form agreed to by the parties and such law firms at such time or times as may be reasonably requested by such law firms, including at the time the Proxy Statement and FormS-4 have been filed with the SEC and at the Effective Time, in connection with such tax counsel’scounsels’ delivery of opinions pursuant to Section 7.2(c)7.2(d) and Section  7.3(c) of this Agreement..

6.146.15    Continuity of Interest.Interest. Notwithstanding anything in this Agreement to the contrary, if either of the tax opinions referred to in Section 7.2(c) or 7.3(c) cannot be rendered (as reasonably determined by Vorys, Sater, Seymour and Pease LLP or Critchfield, CritchfieldSilver, Freedman, Taff  & Johnston, Ltd.,Tiernan LLP, respectively) as a result of the Merger potentially failing to satisfy the “continuity of interest” requirements under applicable federal income tax principles relating to reorganizations under Section 368(a) of the Code, then Purchaser shall increase the Stock Consideration (applying the closing price of shares of the Purchaser Common Shares on the last trading day prior to the Closing Date), and decreasingdecrease the Cash Consideration, to the minimum extent necessary to enable the relevant tax opinion to be rendered.

6.16    Additional Purchaser Director. Purchaser shall take such action necessary to, effective immediately following the Effective Time, (a) increase by one the number of directors on the Board of Directors of Purchaser, and (b) appoint one person who serves as a non-employee director of Company immediately prior to the Effective Time as a Class II director of Purchaser with a term expiring at Purchaser’s 2024 annual meeting of shareholders.

6.17    Section 16 Matters. Prior to the Effective Time, each of Purchaser and Company, shall take all commercially reasonable steps as may be required (to the extent permitted by applicable Law) to cause any dispositions of Company Common Shares (including derivative securities with respect to Company Common Shares) or acquisitions of Purchaser Common Shares (including derivative securities with respect to Purchaser Common Shares) directly resulting from the Merger by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company immediately prior to the Effective Time or shall become subject to such reporting requirements related to Purchaser following the Effective Time, to be exempt under Rule 16b-3  under the Exchange Act, to the extent permitted by applicable Law.

6.18     Redemption of Company Preferred Shares. Company shall take all necessary and appropriate steps to redeem the Company Preferred Shares immediately prior to the Effective Time, including but not limited to, engaging American Stock Transfer & Trust Company LLC (“AST”) or such other party as may be mutually agreed upon by Company and Purchaser, to act as the agent for the redemption of the Company Preferred Shares. At least 30 days and no more than 60 days prior to the Effective Time, Company or AST shall provide notice of redemption of the Company Preferred Shares, effective immediately prior to the Effective Time, and Company shall have provided AST with the funds for the redemption of the Company Preferred Shares prior to the redemption date.

ARTICLE VII

CONDITIONS PRECEDENT

7.1Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of the parties to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

(a)Shareholder Approval. This Agreement, on substantially the terms and conditions set forth in this Agreement, shall have received the Company Shareholder Approval.

(b)Amendment of Company Articles. The Company Articles shall have been amended to eliminate the right of first refusal provisions set forth in ARTICLE FOURTH of the Company Articles in accordance with the applicable provisions of the OGCL and the Company Articles.

(c)Stock Exchange Listing. The shares of Purchaser Common StockShares to be issued to the holders of Company Common Shares upon consummation of the Merger shall have been authorized for listing on the Nasdaq, subject to official notice of issuance.

(d)(c)    FormS-4. The FormS-4 shall have become effective under the Securities Act and no stop order suspending the effectiveness of the FormS-4 shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC.

(e)(d)    No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or agency of competent jurisdiction or other Law preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by this Agreement shall be in effect.

(f)(e)    Regulatory Approvals. (i) All regulatory approvals from the Federal Reserve, the OCC and, if applicable, the FDIC and the Banking Department and (ii) any other regulatory approvals required to consummate the transactions contemplated by this Agreement, including the Merger and (unless otherwise determined by Purchaser) the Bank Merger, shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired (all such approvals and the expiration of all such waiting periods referred to in clauses (i) or (ii), the “Requisite Regulatory Approvals”).

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7.2Conditions to Obligations of Purchaser and Merger Sub. The obligation of Purchaser and Merger Sub to effect the Merger is also subject to the satisfaction, or waiver by Purchaser, at or prior to the Effective Time, of the following conditions:

(a)Representations and Warranties. The representations and warranties of Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Time as though made

on and as of the Effective Time (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date);provided, however, that no representation or warranty of Company (other than the representations and warranties set forth in (i) SectionsSection 3.2(a), 3.3(b), which shall be true and correct except to ade minimisextent, (relativerelative to Section 3.2(a) taken as a whole, or Section 3.2(b) take as a whole), (ii) Sections 3.2(c), 3.3(a), 3.3(b)(i) and 3.7, which shall be true and correct in all material respects, and (iii) Sections 3.8(iii)3.8(c) and Section 3.10, which shall be true and correct in all respects) shall be deemed untrue or incorrect for purposes hereunder or under Section 8.1 as a consequence of the existence of any fact, event or circumstance inconsistent with such representation or warranty, unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty of Company, has had or would reasonably be expected to result in a Material Adverse Effect on Company;provided,further, that for purposes of determining whether a representation or warranty is true and correct for purposes of this Section 7.2(a) or Section 8.1 (other than in the immediately preceding parenthetical), any qualification or exception for, or reference to, materiality (including the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases) in any such representation or warranty shall be disregarded;disregarded, and Purchaser shall have received a certificate signed on behalf of Company by its PresidentChief Executive Officer or Chief Financial Officer to the foregoing effect.

(b)Performance of Obligations of Company. Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time; and Purchaser shall have received a certificate signed on behalf of Company by its PresidentChief Executive Officer or Chief Financial Officer to such effect.

(c)Tax Opinion. Purchaser shall have received an opinion of Vorys, Sater, Seymour and Pease LLP, dated the Closing Date, to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Vorys, Sater, Seymour and Pease LLP will be entitled to receive and rely upon the Tax Representation Letters.

(d)Executive Officer Retention. William C. Marsh shall have agreed to serve as Senior Vice President of Purchaser and Market President, Pennsylvania, of Purchaser Bank immediately following the Effective Time.

(e)    Regulatory Conditions. There shall not be any action taken or determination made, or any Law enacted, entered, enforced or deemed applicable to the transactions contemplated by this Agreement, including the Merger and the Bank Merger, by any Governmental Entity, in connection with the grant of a Requisite Regulatory Approval or otherwise, which imposes any restriction, requirement or condition that, individually or in the aggregate, would, after the Effective Time, restrict or burden Purchaser or the Surviving Company or any of their respective affiliates in connection with the transactions contemplated by this Agreement or with respect to the business or operations of Purchaser or the Surviving Company that would have a material adverse effectMaterial Adverse Effect on Purchaser, the Surviving Company or any of their respective affiliates, in each case measured on a scale relative to Company.

(e)MWG Disposition. Company shall have entered into a definitive agreement for the MWG Disposition not later than March 31, 2017, setting a fixed price for such disposition effective as of such date to be used in the calculation of the Company’s Adjusted Shareholders’ Equity. The MWG Disposition shall have occurred prior to the Closing Date.

(f)Retention of Certain Officers. Purchaser and Joseph Wachtel and Diane Shriver, respectively, shall have mutually agreed upon the terms and conditions under which Mr. Wachtel and Ms. Shriver will continue employment with Purchaser or Purchaser Bank, as the case may be, for a period of six months following the Closing Date (as described in Section 9.1 hereinbelow) with compensation and benefits generally consistent with their respective current compensation and benefits.

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(g)FIRPTA Affidavit. Company shall have delivered to Purchaser an affidavit, under penalties of perjury, stating that Company is not and has not been a United States real property holding corporation, dated as of the Closing Date and in form and substance required under Treasury Regulations Section1.897-2(h).

7.3Conditions to Obligations of Company. The obligation of Company to effect the Merger is also subject to the satisfaction or waiver by Company at or prior to the Effective Time of the following conditions:

(a)Representations and Warranties. The representations and warranties of Purchaser and Merger Sub set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Time as though made on and as of the Effective Time (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date);

provided, however, that no representation or warranty of Purchaser (other than the representations and warranties set forth in (i) Section 4.3(a) and 4.3(b)(i), which shall be true and correct in all material respects, and (ii) Section 4.10 and 4.18, which shall be true and correct in all respects) shall be deemed untrue or incorrect for purposes hereunder or under Section 8.1 as a consequence of the existence of any fact, event or circumstance inconsistent with such representation or warranty, unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty of Purchaser, has had or would reasonably be expected to result in a Material Adverse Effect on Purchaser;provided,further, that for purposes of determining whether a representation or warranty is true and correct for purposes of this Section 7.3(a) or Section 8.1 (other than in the immediately preceding parenthetical), any qualification or exception for, or reference to, materiality (including the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases) in any such representation or warranty shall be disregarded; and Company shall have received a certificate signed on behalf of Purchaser by the Chief Executive Officer or Chief Financial Officer of Purchaser to the foregoing effect.

(b)Performance of Obligations of Purchaser and Merger Sub. Purchaser and Merger Sub, as the case may be, shall have performed in all material respects all obligations required to be performed by either of them under this Agreement at or prior to the Effective Time, and Company shall have received a certificate signed on behalf of Purchaser and Merger Sub by the Chief Executive Officer or the Chief Financial Officer of Purchaser to such effect.

(c)Tax Opinion. Company shall have received an opinion of Critchfield, CritchfieldSilver, Freedman, Taff  & Johnston, Ltd.,Tiernan LLP, dated the Closing Date, to the effect that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, Critchfield, CritchfieldSilver, Freedman, Taff & Johnston, Ltd.Tiernan LLP will be entitled to receive and rely upon the Tax Representation Letters.

(d)Payment of Merger Consideration. Purchaser shall have caused Merger Sub to deliver the Exchange Fund to the Exchange Agent on or before the Closing Date and the Exchange Agent shall provide Company with a certificate evidencing such delivery.

ARTICLE VIII

TERMINATION AND AMENDMENT

8.1Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after the Company Shareholder Approval:

(a)    by mutual consent of Company and Purchaser in a written instrument authorized by the Boards of Directors of Company and Purchaser;

(b)    by either Company or Purchaser, if any Governmental Entity that must grant a Requisite Regulatory Approval has denied approval of the Merger and such denial has become final and nonappealable or any

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Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated by this Agreement;

(c)    by either Company or Purchaser, if the Merger shall not have been consummated on or before the first anniversary of the date of this AgreementJanuary 31, 2023, unless the failure of the ClosingMerger to occur by such date shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth in this Agreement;

(d)    by either Company or Purchaser (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein), if there shall have been a

breach of any of the representations or warranties, or any failure to perform in all material respects any of the covenants or agreements, set forth in this Agreement on the part of Company, in the case of a termination by Purchaser, or on the part of Purchaser, in the case of a termination by Company, which breach, either individually or in the aggregate with other breaches by such party, would result in, if occurring or continuing on the Closing Date, the failure of the conditions set forth in Section 7.2(a)-(c)(d) or 7.3(a)-(c), as the case may be, and which is not cured within 30 days following written notice to the party committing such breach or by its nature or timing cannot be cured within such time period;

(e)    by Purchaser, if (i) at any time prior to the Effective Time, the Board of Directors of Company has (A) failed to recommend to the shareholders of Company that they give the Company Shareholder Approval; (B) effected a Change in the Company Recommendation, including by publicly approving, endorsing or recommending, or publicly proposing to approve, endorse or recommend, any Acquisition Proposal (other than this Agreement), whether or not permitted by the terms hereof, or resolved to do the same, or (C) materially breachedfailed to substantially comply with its obligations under Section 6.3 or 6.7 hereof; or (ii) a tender offer or exchange offer for 15% or more of the outstanding shares of Company Common Shares is commenced (other than by Purchaser or a Subsidiary thereof), and the Board of Directors of Company recommends that the shareholders of Company tender their shares in such tender or exchange offer or otherwise fails to recommend that such shareholders reject such tender offer or exchange offer within the ten (10) business day period specified in Rule14e-2(a) under the Exchange Act; or

(f)    by Company, if at any time prior to the Effective Time, the Purchaser has materially breached its obligations under Section 6.1 or 6.4 hereof.hereof;

(g)    by Purchaser or Company, if the approval of Company’s shareholdersthe Company Shareholder Approval, as required by Section 7.1(a), shall not have been obtained at a duly held Company Shareholders’ Meeting (including any adjournment or postponement thereof.thereof); or

(h)    by Company at any time during the three-day period following the Determination Date (as defined below), if both of the following conditions (i) and (ii) exist:

(i)    the Average Closing Price (as defined below) shall be less than the product of .8 and the Starting Price; and

(ii)    (x) the number obtained by dividing the Average Closing Price by the Starting Price (such number being referred to herein as the “Purchaser Ratio”) shall be less than (y) the number obtained by dividing the Index Price on the Determination Date by the Index Price on the Starting Date (as defined below) and subtracting 0.2 from such quotient (such number being referred to herein as the “Index Ratio”); subject to the following: if Company elects to exercise its termination right pursuant to Section 8.1(h), it shall give prompt written notice to Purchaser; provided that such notice of election to terminate may be withdrawn at any time within the aforementioned three-day period. For a period of five business days after receipt of such notice, Purchaser shall have the option of increasing the Exchange Ratio in a manner such, and to the extent required, so that the condition set forth in either clause (i) or (ii) above shall be deemed not to exist.

For purposes hereof, the condition set forth in clause (i) above shall be deemed not to exist if the Exchange Ratio is increased so that the Adjusted Stock Consideration (calculated by using the Average Closing Price, as provided in the definition of “Adjusted Stock Consideration”) after such increase is not less than 80% of the Adjusted Stock Consideration calculated by using the Starting Price in lieu of the Average Closing Price.

For purposes hereof, the condition set forth in clause (ii) above shall be deemed not to exist if the Exchange Ratio is increased so that the Adjusted Purchaser Ratio is not less than the Index Ratio.

If Purchaser makes this election, within such period, it shall give prompt written notice to Company of such election and the revised Exchange Ratio, whereupon no termination shall have occurred pursuant to this Section 8.1(h) and this Agreement shall remain in effect in accordance with its terms (except as the Exchange Ratio, and derivatively the Stock Consideration, shall have been so modified), and any references in this Agreement to “Exchange Ratio” and “Stock Consideration” shall thereafter be deemed to refer to the Exchange Ratio and Stock Consideration after giving effect to any adjustment made pursuant to this Section 8.1(h).

For purposes of this Section 8.1(h), the following terms shall have the meanings indicated:

“Adjusted Purchaser Ratio” means the number obtained by dividing (x) the sum of  (i) the Average Closing Price plus (ii) the quotient obtained by dividing the aggregate increase in transaction value resulting from an increase in the Exchange Ratio by the total number of shares of Purchaser Common Shares outstanding multiplied by the initial Exchange Ratio, on the Determination Date, by (y) the Starting Price. For purposes of calculating the increase in transaction value, the price per share of Purchaser Common Shares shall be deemed to be the Average Closing Price.

“Adjusted Stock Consideration” means the product of the Stock Consideration times the Average Closing Price.

“Average Closing Price” means the average of the last reported closing prices per share of Purchaser Common Shares as reported on the Nasdaq (as reported by The Wall Street Journal or, if not reported thereby, any other mutually agreed upon authoritative source) for the twenty consecutive trading days immediately preceding the Determination Date.

“Determination Date” shall mean the tenth calendar day immediately prior to the Effective Time, or if such calendar day is not a trading day on the Nasdaq, the trading day immediately preceding such calendar day.

“Index Price” on a given date means the closing price of the Nasdaq Bank Index.

“Starting Date” means the trading day on the Nasdaq immediately preceding the day on which the parties publicly announce the signing of this Agreement.

“Starting Price” means $17.02.

If the Purchaser declares or effects a stock dividend, reclassification, recapitalization, split-up, combination, exchange of shares or similar transaction between the Starting Date and the Determination Date, the prices for the common stock of the Purchaser shall be appropriately adjusted for the purposes of applying this Section 8.1(h).

The party desiring to terminate this Agreement pursuant to clause (b), (c), (d), (e), (f) or (g) of this Section 8.1 shall give written notice of such termination to the other party in accordance with Section 9.3, specifying the provision or provisions hereof pursuant to which such termination is effected.

8.2Effect of Termination. In the event of termination of this Agreement by either Company or Purchaser as provided in Section 8.1, this Agreement shall forthwith become void and have no effect, and none of Company, Purchaser, any of their respective affiliates or any of the officers or directors of any of them shall have any liability of any nature whatsoever under this Agreement, or in connection with the transactions contemplated by this Agreement, except that (i) Sections 6.2(b), 6.12 (the penultimate sentence only), 8.2, 8.3, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10 and 9.11 shall survive any termination of this Agreement, and (ii) neither Company

nor Purchaser shall be relieved or released from any liabilities or damages arising out of its Willful Breach of any provision of this Agreement. For purposes of this Agreement, “Willful Breach” means a material breach that is a consequence of an act undertaken by the breaching party with the actual knowledge that the taking of the act would, or would reasonably be expected to, cause a breach of this Agreement.

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8.3Fees and Expenses.

(a)    All fees and expenses incurred in connection with the Merger, this Agreement, and the transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses, whether or not the Merger is consummated.

(b)    Notwithstanding the foregoing, if:

(i)    (A) Either Company or Purchaser terminates this Agreement pursuant to 8.1(c) (without the Company Shareholder Approval having been obtained), Purchaser terminates pursuant to Section 8.1(d) (as a result of a Willful Breach by Company), or either Company or Purchaser terminates this Agreement pursuant to Section 8.1(f), and (B) prior to termination, there has been publicly announced an Acquisition Proposal or any Person or “group” (as such term is defined in Section 13(d) under the Exchange Act) shall have communicated to Company or its shareholders an Acquisition Proposal (whether or not conditional), or an intention (whether or not conditional) to make an Acquisition Proposal, and (C) within twelve months of such termination Company shall either (1) consummate an Acquisition Transaction or (2) enter into any definitive agreement relating to any Acquisition Transaction (but not including any confidentiality agreement required by Section 6.7(b) (an “Acquisition Agreement”)) with respect to an Acquisition Transaction or Acquisition Proposal, whether or not such Acquisition Transaction or Acquisition Proposal is subsequently consummated (but changing, in the case of (1) and (2), the references to the 15%“25%” and 85%“75%” amounts in the definition of Acquisition Transaction and Acquisition Proposal to 50%“50%”); or

(ii)    (A) Either Company or Purchaser terminates this Agreement pursuant to Section 8.1(g) and (B) within six months of such termination Company shall either (1) consummate an Acquisition Transaction or (2) enter into any Acquisition Agreement with respect to an Acquisition Transaction or Acquisition Proposal, whether or not such Acquisition Transaction or Acquisition Proposal is subsequently consummated (but changing, in the case of (1) and (2), the references to the “25%” and “75%” amounts in the definition of Acquisition Transaction and Acquisition Proposal to “50%”)

(iii)    Purchaser terminates this Agreement pursuant to Section 8.1(e); then Company shall pay to Purchaser an amount equal to $300,000.00; provided, however, that if Company terminates this Agreement pursuant to Section 8.1(f) then Purchaser shall pay to Company an amount equal to $100,000.00 (in either case, theThree Million, Seven Hundred and Fifty Thousand and 00/100 Dollars ($3,750,000.00) (the “Termination Fee”). If the Termination Fee shall be payable pursuant to subsection (b)(i) of this Section 8.3, the Termination Fee shall be paid insame-day funds at or prior to the earlier of the date of consummation of such Acquisition Transaction or the date of execution of an Acquisition Agreement with respect to such Acquisition Transaction or Acquisition Proposal. If the Termination Fee shall be payable pursuant to subsection (b)(ii) of this Section 8.3, the Termination Fee shall be paid insame-day funds immediately upon delivery of the written notice of termination required by Section 8.1.

(c)    The Partiesparties acknowledge that the agreements contained in paragraph (b) of this Section 8.3 are an integral part of the transactions contemplated by this Agreement, and that without these agreements, they would not enter into this Agreement; accordingly, if any partyCompany fails to pay promptly any fee payable by it pursuant to this Section 8.3, then such partyCompany shall pay to thenon-breaching party, thenon-breaching party’sPurchaser, Purchaser’s costs and expenses (including attorneys’ fees, costs and expenses) in connection with collecting such fee, together with interest on the amount of the fee at the prime rate of Citibank, N.A. from the date such payment was due under this Agreement until the date of payment.

8.4Amendment. This Agreement may be amended by the parties, by action taken or authorized by their respective Boards of Directors, at any time before or after the Company Shareholder Approval;provided,however, that after the approval of Company shareholders,Shareholder Approval, there may not be, without further approval of suchthe Company shareholders who have already provided their approval, any amendment of this Agreement that requires further approval under applicable Law. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

8.5Extension; Waiver. At any time prior to the Effective Time, the parties, by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to

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insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

ARTICLE IX

GENERAL PROVISIONS

9.1Closing. On the terms and subject to conditions set forth in this Agreement, the closing of the Merger (the “Closing”) shall take place at 10:00 a.m., local prevailing time, atremotely via the Akron officeselectronic exchange of Vorys, Sater, Seymour and Pease LLP, counsel to Purchaser,closing deliveries on a date to be specified by the parties (the “Closing Date”).

9.2Nonsurvival of Representations, Warranties and Agreements. None of the representations, warranties, covenants and agreements set forth in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time, except for Section 6.6 and for those other covenants and agreements contained in this Agreement that by their terms apply or are to be performed in whole or in part after the Effective Time.

9.3Notices. All notices, consents, waivers and other communications in connection withunder this Agreement shall be in writing (which shall include electronic mail) and shall be deemed to have been duly given if delivered personally, sent via facsimile (with confirmation)by hand or by nationally recognized overnight delivery service (receipt requested), mailed by registered or certified U.S. mail (return receipt requested) postage prepaid or delivered by an express courier (with confirmation)electronic mail (upon confirmation of receipt) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

 (a)    IfIf

to Company, to:

Monitor Bancorp, Inc.Emclaire Financial Corp

13210 State Route 226612 Main Street

Big Prairie, OH 44611Emlenton, Pennsylvania 16373

Attention: Joseph M. WachtelWilliam C. Marsh, Chairman, President and Chief Executive Officer

Facsimile: (330)496-3701Email: wmarsh@farmersnb.com

with a copy (which shall not constitute notice) to:

Critchfield, CritchfieldSilver, Freedman, Taff  & Johnston, Ltd.Tiernan LLP

225 North Market3299 K Street, NW, Suite 100

Wooster, OH 44691Washington, DC 20007

Attention: Christopher J. PycraftKenneth B. Tabach

Facsimile: (330)263-9278Email: ktabach@sfttlaw.com

 (b)    ifif

to Purchaser, to:

Farmers National Banc Corp.

20 S. Broad St.

Canfield, OH 44406

Attention: Kevin J. Helmick, President and Chief Executive Officer

Facsimile: (330)533-0451Email: KHelmick@Farmersbankgroup.com

with a copy (which shall not constitute notice) to:

Vorys, Sater, Seymour and Pease LLP

10650 South Main Street, Suite 11001200

Akron, Ohio 44308

Attention: J. Bret Treier

Facsimile: (330)208-1066

Email: jbtreier@vorys.com

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9.4Interpretation. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference shall be to an Article or Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “Knowledge” with respect to Company means the actual knowledge after reasonable inquiry of any of Company’s officers listed on Section 9.4 of the Company Disclosure Schedule and with respect to Purchaser, means the actual knowledge after reasonable inquiry of any of Purchaser’s officers listed on Section 9.4 of the Purchaser Disclosure Schedule. When a reference is made in this Agreement to an affiliate of a Person, the term “affiliate” means those other Persons that, directly or indirectly, control, are controlled by, or are under common control with, such Person. All schedules and exhibits hereto shall be deemed part of this Agreement and included in any reference to this Agreement. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

9.5Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or other electronic means), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart.

9.6Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the Confidentiality Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement, other than the Confidentiality Agreement.

9.7Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio applicable to contracts made and performed entirely within such state, without giving effect to its principles of conflicts of laws. The parties hereto agree that any suit, action or proceeding brought by either party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in any federal or state court

located in Mahoning County, Ohio (which the parties expressly agree shall exclusively be the federal court for the Northern District of Ohio, or in the event (but only in the event) that such court does not have jurisdiction over such dispute, any court sitting in Mahoning County, Ohio). Each of the parties hereto submits to the exclusive jurisdiction of such court in any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile or otherwise in such suit, action or proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

9.8Waiver of Jury Trial. Each party hereto acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation, directly or indirectly, arising out of, or relating to, this Agreement, or the transactions contemplated by this Agreement. Each party certifies and acknowledges that (a) no representative, agent or attorney of any other

B - 46

party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) each party understands and has considered the implications of this waiver, (c) each party makes this waiver voluntarily, and (d) each party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 9.8.

9.9Publicity. Neither Company nor Purchaser shall, and neither Company nor Purchaser shall permit any of its Subsidiaries to, issue or cause the publication of any press release or other public announcement with respect to, or otherwise make any public statement, or, except as otherwise specifically provided in this Agreement, any disclosure of nonpublic information to a third party, concerning, the transactions contemplated by this Agreement without the prior consent (which shall not be unreasonably withheld or delayed) of Purchaser, in the case of a proposed announcement, statement or disclosure by Company, or Company, in the case of a proposed announcement, statement or disclosure by Purchaser;provided,however, that either party may, without the prior consent of the other party (but after prior consultation with the other party to the extent practicable under the circumstances) issue or cause the publication of any press release or other public announcement to the extent required by Law.Law or rules established by Nasdaq.

9.10Assignment; Third-Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned by either of the parties (whether by operation of law or otherwise) without the prior written consent of the other party (which shall not be unreasonably withheld or delayed). Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by each of the parties and their respective successors and assigns. Except for the provisions of Section 6.6, which is intended to benefit each Indemnified Party and his or her heirs and representatives, or for those certain Company employees under Section 6.5(h), this Agreement (including the documents and instruments referred to in this Agreement) is not intended to and does not confer upon any Person other than the parties hereto any rights or remedies under this Agreement.

9.11Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

9.12Disclosure Schedule. Before entry into this Agreement, Company delivered to Purchaser a schedule (a “Company Disclosure Schedule”) and Purchaser has delivered to Company a schedule (a “Purchaser Disclosure Schedule”) that sets forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an

exception to one or more representations or warranties contained in Article III or Article IV, as the case may be, or to one or more covenants contained herein;provided,however, that notwithstanding anything in this Agreement to the contrary, (i)(a) no such item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect and (ii)(b) the mere inclusion of an item as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would be reasonably likely to have a Material Adverse Effect. For purposes of this Agreement, “Previously Disclosed” means information set forth by Company or Purchaser, as the case may be, in the applicable paragraph of its Company Disclosure Schedule or Purchaser Disclosure Schedule, respectively, or any other paragraph of its Company Disclosure Schedule or Purchaser Disclosure Schedule (so long as it is reasonably clear on the face of such disclosure that the disclosure in such other paragraph of its Company Disclosure Schedule or Purchaser Disclosure Schedule is also applicable to the section of this Agreement in question).

9.13    Delivery by Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by e-mail delivery of a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANKRemainder of page intentionally left blank. Signature pages follow.]

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IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of Merger to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

FARMERS NATIONAL BANC CORP.

By:

 

/s/ Kevin J. Helmick

 

Name:

 

Kevin J. Helmick

 

Title:

 

President and Chief Executive Officer

FMNB MERGER SUBSIDIARY II,V, LLC

By:

 

/s/ Kevin J. Helmick

 

Name:

Kevin J. Helmick

Title:

President

MONITOR BANCORP, INC.
By:

/s/ Joseph M. Wachtel

Name: Joseph M. WachtelKevin J. Helmick
 Title: President
EMCLAIRE FINANCIAL CORP.

By:

/s/ William C. Marsh

Name:William C. Marsh
Title:Chairman, President and Chief Executive Officer

B - 48

EXHIBIT A

AGREEMENT OF MERGER

This agreement of merger (this “Bank“Bank Merger Agreement”Agreement”), dated as of [            [●], 2017,2022, is by and between The MonitorFarmers National Bank of Emlenton (“Monitor Bank”Emlenton Bank”) and The Farmers National Bank of Canfield (“Farmers Bank”Bank”). All capitalized terms used herein but not defined herein shall have the respective meanings assigned to them in the Agreement and Plan of Merger, (the “Prior Merger Agreement”) dated as of [            , 2017]March 23, 2022 (the “Parent Merger Agreement”), between Farmers National Banc Corp. (“FMNB”FMNB”), FMNB Merger Subsidiary II,V, LLC (“Merger Sub”) and Monitor Bancorp, Inc.Emclaire Financial Corp. (“Monitor”Emclaire”).

WlTNESSETH:WITNESSETH:

WHEREAS, MonitorEmlenton Bank is an Ohioa national banking association and a wholly owned subsidiary of Monitor,Emclaire, with, as of [            ], 2017,[●], 2022, a capital of $[        ],●], divided into [                    [●]shares of common stock, each of $10.00 par$[●] stated value, surplus of $[        ],●], and undivided profits, including capital reserves, of $[        ];●]; and

WHEREAS, Farmers Bank is a national banking association and a wholly owned subsidiary of FMNB, with, as of [            [●], 2017,2022, a capital of $[        ],●], divided into 542,339[●] shares of common stock, each of $5.00 par value, surplus of $[        ],●], and undivided profits, including capital reserves, of $[        ];●]; and

WHEREAS, FMNB, Merger Sub and MonitorEmclaire have entered into the PriorParent Merger Agreement, pursuant to which MonitorEmclaire will merge with and into Merger Sub (the “Prior Merger”“Parent Merger”); and

WHEREAS, MonitorEmlenton Bank and Farmers Bank desire to merge on the terms and conditions herein provided immediately following the effective time of the PriorParent Merger.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

1.The Bank Merger. Subject to the terms and conditions of the PriorParent Merger Agreement and this Bank Merger Agreement, at the Effective Time (as defined in Section 2), MonitorEmlenton Bank shall merge with and into Farmers Bank (the “Bank Merger”“Bank Merger”) under the laws of the United States, Commonwealth of Pennsylvania and the State of Ohio. Farmers Bank shall be the surviving bank of the Bank Merger (the “Surviving Bank”“Surviving Bank”).

2.Effective Time. The Bank Merger shall become effective at [●] on [●], subject to (a) the date,satisfaction or, to the extent permitted by applicable law, the waiver of the closing conditions set forth in Article VII of the Parent Merger Agreement, and at the time (the “Effective Time”), specified in the Bank Merger approval to be issued by(b) receipt of all necessary approvals or non-objections from the Office of the Comptroller of the Currency (“OCC”) and all other necessary approvals from any applicable bank regulatory agency (the “OCC”“Effective Time”).

3.Charter; Bylaws. The CharterArticles of Association (the “Charter”) and Bylaws of Farmers Bank in effect immediately prior to the Effective Time shall be the Charter and Bylaws of the Surviving Bank, until altered, amended or repealed in accordance with their terms and applicable law.

4.Name; Offices. The name of the Surviving Bank shall be “The Farmers National Bank of Canfield.” The main office of the Surviving Bank shall be the main office of Farmers Bank immediately prior to the Effective Time.

5.Directors and Executive Officers. Upon consummation of the Bank Merger, (i) the directors of Farmers Bank immediately prior to the Effective Time shall continue as directors of the Surviving Bank and (ii) the executive officers of Farmers Bank immediately prior to the Effective Time shall continue as the executive

officers of the Surviving Bank. Each of the directors and officers of the Surviving Bank immediately after the Effective Time shall hold office until his or her successor is elected and qualified in accordance with the charterCharter and bylaws of the Surviving Bank or until his or her earlier death, resignation or removal.

EXA - 1

6.Effects of the Merger. Upon consummation of the Bank Merger, and in additionsubject to the effects set forth at 12 U.S.C. § 215c, the applicable provisions of the regulations of the OCC and other applicable law, (i) all assets of Farmers Bank and MonitorEmlenton Bank as they exist at the Effective Time, shall pass to and vest in the Surviving Bank without any conveyance or other transfer; (ii) the Surviving Bank shall be considered the same business and corporate entity as each constituent bank with all the rights, powers and duties of each constituent bank and (iii) the Surviving Bank shall be responsible for all the liabilities of every kind and description, of each of Farmers Bank and MonitorEmlenton Bank existing as of the Effective Time, all in accordance with the provisions of The National Bank Act.

7.Effect on Shares of Stock.

(a)    Each share of Farmers Bank common stock issued and outstanding immediately prior to the Effective Time shall be unchanged and shall remain issued and outstanding and shall consist of $[        ],●] in capital, divided into 542,339[●] shares of common stock, each of $5.00, and at the Effective Time Farmers Bank shall have a surplus of $[        ],●] and undivided profits, including capital reserves, of $[●], which when combined with the capital and surplus will be equal to the combined capital structures of FarmerFarmers Bank and MonitorEmlenton Bank as stated in the recitals of this Agreement, adjusted however, for normal earning and expense (and if applicable purchase accounting adjustments) from [            ], 2017[●], 2022 until the Effective Time.

(b)    At the Effective Time, each share of MonitorEmlenton Bank capital stock issued and outstanding prior to the Bank Merger shall, by virtue of the Bank Merger and without any action on the part of the holder thereof, be canceled. Any shares of MonitorEmlenton Bank capital stock held in the treasury of MonitorEmlenton Bank immediately prior to the Effective Time shall be retired and canceled.

8.Procurement of Approvals. This Bank Merger Agreement shall be subject to the approval of FMNB, as the sole shareholder of Farmers Bank, and Monitor,Emclaire, as the sole shareholder of MonitorEmlenton Bank at meetings to be called and held or by consent in lieu thereof in accordance with the applicable provisions of law and their respective organizational documents. Farmers Bank and MonitorEmlenton Bank shall proceed expeditiously and cooperate fully in the procurement of any other consents and approvals and in the taking of any other action,actions, and the satisfaction of all other requirements prescribed by law or otherwise necessary for consummation of the Bank Merger on the terms provided herein, including without limitation the preparation and submission of such applications or other filings for the Bank Merger with the OCC and the Ohio Department of Financial Institutions as may be required by applicable laws and regulations.

9.Conditions Precedent. The obligations of the parties under this Bank Merger Agreement shall be subject to: (i) the approval of this Bank Merger Agreement by FMNB, as the sole shareholder of Farmers Bank, and Monitor,Emclaire as the sole shareholder of MonitorEmlenton Bank, at meetings of shareholders duly called and held or by consent or consents in lieu thereof, in each case without any exercise of such dissenters’ rights as may be applicable;thereof; (ii) receipt of approval of the Bank Merger from all governmental and banking authorities whose approval is required; (iii) receipt of any necessary regulatory approval to operate the main office and the branch offices of MonitorEmlenton Bank as offices of the Surviving BankBank; and (iv) the consummation of the PriorParent Merger pursuant to the PriorParent Merger Agreement at or before the Effective Time.

10.Additional Actions. If, at any time after the Effective Time, the Surviving Bank shall determine that any further assignments or assurances in law or any other acts are necessary or desirable to (a) vest, perfect or confirm, of record or otherwise, in the Surviving Bank its rights, title or interest in, to or under any of the rights, properties or assets of MonitorEmlenton Bank acquired or to be acquired by the Surviving Bank as a result of, or in connection with, the Bank Merger, or (b) otherwise carry out the purposes of this Bank Merger Agreement, MonitorEmlenton Bank and its proper officers and directors shall be deemed to have granted to the Surviving Bank an

irrevocable power of attorney to (i) execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Bank and (ii) otherwise to carry out the purposes of this Bank Merger Agreement. The

EXA - 2

proper officers and directors of the Surviving Bank are fully authorized in the name of MonitorEmlenton Bank or otherwise to take any and all such action.

11.Amendment. Subject to applicable law, this Bank Merger Agreement may be amended, modified or supplemented only by written agreement of Farmers Bank and MonitorEmlenton Bank at any time prior to the Effective Time.

12.Waiver. Any of the terms or conditions of this Bank Merger Agreement may be waived at any time by whichever of the parties hereto is, or the shareholder of which is, entitled to the benefit thereof by action taken by the Board of Directors of such waiving party.

13.Assignment. This Bank Merger Agreement may not be assigned by either Farmers Bank or MonitorEmlenton Bank without the prior written consent of the other.

14.Termination. This Bank Merger Agreement shall terminate upon the termination of the PriorParent Merger Agreement in accordance with its terms.

15.Governing Law. Except to the extent governed by federal law, this Bank Merger Agreement shall be governed in all respects, including, but not limited to, validity, interpretation, effect and performance, by the laws of the State of Ohio without regard to the conflicts of law provisions thereof.

16.Counterparts. This Bank Merger Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one agreement.

[Remainder of page intentionally left blank. Signature Page Follows.pages follow.]

EXA - 3

IN WITNESS WHEREOF, each of Farmers Bank and 1st National CommunityEmlenton Bank has caused this Bank Merger Agreement to be executed on its behalf by its duly authorized officers.

 

THE FARMERS NATIONAL BANK OF
CANFIELD
By: 

/s/ Kevin J. Helmick

 Name:  Kevin J. Helmick
 Title:     President
THE MONITORFARMERS NATIONAL BANK OF EMLENTON
By: 

/s/ Joseph M. Wachtel

 Name:  Joseph M. WachtelWilliam C. Marsh
 Title:     Chairman, President and Chief
              Executive Officer

Signature Page to Bank Merger Agreement

EXA - 4

EXHIBIT B

INITIAL MERGER CONSIDERATION SCHEDULE1Form of Voting Agreement

Company Shareholders’ Equity at March 31, 2017

    $6,065,782 

MWG Disposition Gross Proceeds

  $256,000   

MWG Disposition Gross Proceeds Adjustment

   x.65   $166,400 
    

 

 

 

Adjusted Shareholders’ Equity

    $6,232,182 

Maximum Value

  $6,232,182 x 1.25   $7,790,228 

Minimum Value

  $6,232,182 x 1.15   $7,167,009 

Cash Value Per Company Share

  $7,790,228/10,000   $779.0228 

Initial Exchange Ratio

  $779.0228/$13.3055    58.5489 

1For illustration purposes for this form of Initial Merger Consideration Schedule, (i) Company’s Shareholders’ Equity at March 31, 2017 is assumed to be $6,065,782, and (ii) the gross proceeds to be received by Company in connection with the MWG Disposition is assumed to be $256,000.
VOTING AGREEMENT

March 23, 2022

EXB - 1Farmers National Banc Corp.

EXHIBIT C20 S. Broad St.

FINAL MERGER CONSIDERATION SCHEDULE2Canfield, OH 44406

Maximum Value

    $6,232,182 x 1.25    $7,790,228 

Minimum Value

    $6,232,182 x 1.15    $7,167,009 

Calculation of Total Merger Consideration

   

Initial Exchange Ratio

   58.5489  

Final VWAP

  x$13.50  

Company Common Shares for Stock Election

  x8,500  

Aggregate Stock Consideration

    $6,718,486    $6,718,486 

Plus: Aggregate Cash Consideration

    $779.0228x1,500  +$1,168,504 
   

 

 

 

Total Merger Consideration

     $7,886,590 

Maximum Value

     $(7,790,228) 
   

 

 

 

Excess, requiring reduction in Exchange Ratio

     $96,762 

Final Exchange Ratio (as adjusted):

   

Maximum Value

    $7,790,228  

Less: Aggregate Cash Consideration

    $(1,168,504)  
  

 

 

  

Maximum Aggregate Stock Consideration

    $6,621,724  

Application of Final VWAP

    $6,621,724/8,500/$13.50   57.7057 

Maximum Value

    $6,232,182 x 1.25    $7,790,228 

Minimum Value

    $6,232,182 x 1.15    $7,167,009 

Calculation of Total Merger Consideration

   

Initial Exchange Ratio

   58.5489  

Final VWAP

  x$12.00  

Company Common Shares for Stock Election

  x8,500  

Aggregate Stock Consideration

    $5,971,988    $5,971,988 

Plus: Aggregate Cash Consideration

    $779.0228x1,500  +$1,168,504 
   

 

 

 

Total Merger Consideration

     $7,140,492 

Minimum Value

     $(7,167,009) 
   

 

 

 

Shortfall, requiring increase in Exchange Ratio

     $(26,517) 

Final Exchange Ratio (as adjusted):

   

Minimum Value

    $7,167,009  

Less: Aggregate Cash Consideration

    $(1,168,504)  
  

 

 

  

Minimum Aggregate Stock Consideration

    $5,998,505  

Application of Final VWAP

    $5,998,505/8,500/$12.00   58.8089 

2For illustration purposes for this form of Final Merger Consideration Schedule, (i) Company’s Shareholders’ Equity at March 31, 2017 is assumed to be $6,065,782, (ii) the gross proceeds to be received by Company in connection with the MWG Disposition is assumed to be $256,000, and (iii) the Final VWAP is assumed to be $13.50 and $12.00, respectively.
Ladies and Gentlemen:

EXC - 1

Annex C

SharesConcurrently with the execution of this Corporation mayletter agreement (“Voting Agreement”), Farmers National Banc Corp., an Ohio corporation (“Farmers”), FMNB Merger Subsidiary V, LLC, an Ohio limited liability company and a wholly owned subsidiary of Farmers (“Merger Sub”), and Emclaire Financial Corp., a Pennsylvania corporation (“Emclaire”), are entering into an Agreement and Plan of Merger, of even date herewith (the “Merger Agreement”), whereby Emclaire will merge with and into Merger Sub (the “Merger”) and the shareholders of Emclaire will receive the Merger Consideration as set forth in the Merger Agreement, subject to the closing of the Merger. All defined terms used but not defined herein shall have the meanings ascribed thereto in the Merger Agreement.

A condition to Farmers’ obligations under the Merger Agreement is that I execute and cannot,deliver this Voting Agreement to Farmers. Intending to be sold norlegally bound hereby, I irrevocably agree and represent as follows:

(a)    As of the date of this Voting Agreement, and at all times during the term of this Voting Agreement (i) I will have beneficial ownership, thereofas defined in any manner transferred, either in whole or in part byRule 13d-3 under the registered holder, beneficial owner, his or their creditors or personal representatives or any person whomsoever, unlessExchange Act (“Beneficial Ownership”), of, and until they shall have been offered for sale at the seller’s lowest price firstgood and valid title to, the number of common shares, $1.25 par value, of Emclaire (the “Emclaire Common Shares”), that is set forth on Appendix A hereto, (ii) I hold restricted stock awards with respect to the number of Emclaire Common Shares set forth on Appendix A hereto, and (iii) I will have Beneficial Ownership of, and good and valid title to, the number of preferred shares, $1.00 par value, of Emclaire (the “Emclaire Preferred Shares”), that is set forth on Appendix A hereto. All of the securities listed on Appendix A are either (x) owned free and clear of any proxy or voting restriction, claims, liens, encumbrances and security interests and any other ownerslimitation or restriction whatsoever (including any restriction on the right to dispose of such securities), or (y) with respect to the Emclaire Common Shares subject to restricted stock awards, are subject to the terms and conditions of the applicable restricted stock award agreement. None of the securities listed on Appendix A are subject to any voting trust or other agreement or arrangement with respect to the voting rights of such securities.

(b)    As of the date of this corporation’sVoting Agreement, except for the securities set forth on Appendix A, I do not beneficially own any (i) shares of capital stock who shallor voting securities of Emclaire, (ii) securities of Emclaire convertible into or exchangeable for shares of capital stock or voting securities of Emclaire, or (iii) options or other rights to acquire from Emclaire any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Emclaire. The Emclaire Common Shares listed on Appendix A, together with all Emclaire Common Shares that I subsequently acquire during the term of this Voting Agreement, including through the exercise of any stock options, warrants or similar instruments, are referred to herein as the “Shares”.

(c)    At the Company Shareholders’ Meeting (as defined in the Merger Agreement) and at any other meeting of Emclaire shareholders, however called, I will be present (in person or by proxy) so that all of the Shares over which I have fifteen days within which to exercise their option to purchase such shares whichsole voting power shall be apportioned among those desiringcounted for the purpose of determining the presence of a quorum and vote or cause to purchase them according to the amountbe voted (including on any action or approval by written consent of such stock already held by them.

The seller shall notify the Secretary in writingshareholders of his offer to sell a specified number of shares, which offer shallEmclaire) not be revocable. It shall be the duty of the Secretary to give notice of such intended sale immediately to all registered holders of such stock, noting the time within which the option must be exercised. Those stockholders desiring to purchase such shares, or any part thereof, shall so notify the Secretary in writing within fifteen days after the receipt by the Secretary of the seller’s offer. Within three days after the termination of such fifteen days the Secretary shall inform the seller whether or not the option has been exercised. If it is exercised, the sale shall be completed as soon as practicable thereafter. If it is not exercised, such seller shall be free to sell his stock to any other person, at no less price than that at which it was offered to the other stockholders, within three months from the date his offer was received by the Secretary. After such time, however, opportunity must be given again to the other stockholders to exercise their option before another sale is made.

Provided, however, that the seller shall not be obligated to sell to such other stockholders less than all of such Shares. In addition, I will use my best efforts to cause any Shares over which I

share voting power, to be voted in favor of (i) approval and adoption of the shares he offersMerger Agreement and the transactions contemplated thereby, and (ii) any proposal to adjourn or postpone such meeting to a later date if there are not sufficient votes to approve the Merger Agreement. Determinations as to “sole” or “shared” voting power shall be made in accordance with Rule 13d-3 of the Exchange Act.

(d)    During the term of this Voting Agreement, I will not, directly or indirectly, offer, sell, transfer, pledge, encumber or otherwise dispose of (collectively, “Transfer”) any Shares over which I have sole dispositive power (or any interest therein), and I will use my best efforts to not permit the Transfer of any Shares over which I have shared dispositive power (or any interest therein), except to the extent permitted by paragraph (g) hereof.

(e)    I agree that Emclaire shall not be bound by any attempted sale of any Emclaire Common Shares over which I have sole voting and dispositive power, and Emclaire’s transfer agent shall be given appropriate stop transfer orders and shall not be required to register any such attempted sale, unless the sale has been effected in compliance with the terms of this Voting Agreement.

(f)    I represent that I have the legal capacity to enter into this Voting Agreement, that I have duly and validly executed and delivered this Voting Agreement and that this Voting Agreement is a valid and binding obligation enforceable against me in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting creditors’ rights and general equitable principles; and further, that no consent of my spouse is necessary under any “community property” or other laws in order for sale;me to enter into and ifperform my obligations under this Voting Agreement.

(g)    Notwithstanding anything herein to the other stockholders do not elect to takecontrary, I may Transfer any or all of the shares offered,Shares over which I have beneficial ownership to myself, my spouse, ancestors or descendants; provided, however, that in any such case, prior to and as a condition to the sellereffectiveness of such Transfer, each person to which any of such Shares or any interest in any of such Shares is or may be Transferred (other than myself) shall have executed and delivered to Farmers an agreement to be bound by the terms of this Voting Agreement.

I am signing this Voting Agreement solely in my capacity as a shareholder of Emclaire, if I am such, and not in any other capacity, such as a director or officer of Emclaire or as a fiduciary of any trusts in which I am not a beneficiary. Notwithstanding anything herein to the contrary: (a) I make no agreement or understanding herein in any capacity other than in my capacity as a beneficial owner of the Shares and (b) nothing herein shall be freeconstrued to make other salelimit or affect any action or inaction by me or any of my representatives, as applicable, in serving on Emclaire’s Board of Directors or as an officer of Emclaire, in acting in my capacity as a director, officer or fiduciary of Emclaire, or as a fiduciary of any trust for which I serve as trustee.

This Voting Agreement shall terminate and be of no further force and effect concurrently with, and automatically upon, the earlier to occur of (a) the favorable vote of the stock offered as hereinbefore provided.

No personEmclaire shareholders with respect to the approval of the Merger Agreement, (b) the Effective Time, (c) Farmers and I enter into a written agreement to terminate this Voting Agreement, or (d) any termination of the Merger Agreement in accordance with its terms, except that any such termination shall be entitledwithout prejudice to Farmers’ rights if termination should arise out of my willful breach of any covenant or representation contained herein.

All notices and other communications in connection with this Voting Agreement shall be in writing (which shall include electronic mail) and shall be deemed to have been duly given if delivered by hand or by nationally recognized overnight delivery service (receipt requested), mailed by registered or certified U.S. mail (return receipt requested) postage prepaid or electronic mail (upon confirmation of receipt) to the parties at the addresses set forth on the signature pages hereto (or at such other address for a transferparty as shall be specified by like notice).

This Voting Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. This Voting Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Voting Agreement.

I agree and acknowledge that Farmers may be irreparably harmed by, and that there may be no adequate remedy at law for, any violation of this Voting Agreement by me. Without limiting other remedies, Farmers shall have the right to seek to enforce this Voting Agreement by specific performance or injunctive relief. This Voting Agreement and all claims arising hereunder or relating hereto, shall be governed and construed and enforced in accordance with the laws of the State of Ohio, without giving effect to the principles of conflicts of law thereof. I hereby irrevocably and unconditionally submit to the exclusive jurisdiction of any Ohio state court or the United States District Court for the Northern District of Ohio, in any action or proceeding arising out of or relating to this letter.

If any term, provision, covenant or restriction of this Voting Agreement is held by a court of competent jurisdiction or other Governmental Entity to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Voting Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Voting Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

This Agreement may be executed in two or more counterparts (including by facsimile or other electronic means), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by e-mail delivery of a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.

[Remainder of page intentionally blank; signature pages follow]

Very truly yours,

Name:
Address:

Email:

Acknowledged and Agreed:

FARMERS NATIONAL BANC CORP.

By:

Kevin J. Helmick,
President and Chief Executive Officer

Address:

Farmers National Banc Corp.

20 S. Broad St.

Canfield, OH 44406
Attention: Kevin J. Helmick, President and Chief Executive Officer
Email: KHelmick@Farmersbankgroup.com

Signature page to Voting Agreement

Appendix A

Number of Shares held (excluding Shares of restricted stock):

This amount includes:

Shares over which I have sole voting power

Shares over which I have shared voting power

Shares over which I have sole dispositive power

Shares over which I have shared dispositive power

Preferred Shares

Number of shares on the books of the corporation, nor shall such transfer be made, until the foregoing provisions have been complied with.

restricted stock under restricted stock award agreements:

Appendix to Voting Agreement

C - 1

ANNEX DB

LOGO

March 13, 201723, 2022

Board of Directors

Monitor Bancorp, Inc.Emclaire Financial Corp

13210 State Route 226612 Main Street

Big Prairie, OH 44611Emlenton, PA 16373

Members of the Board:Board of Directors:

You haveWe understand that Farmers National Banc Corp. (the “Acquiror”), Emclaire Financial Corp. (the “Company”) and FMNB Merger Subsidiary V, LLC, an Ohio limited liability company and wholly-owned subsidiary of Acquiror (“Merger Sub”), propose to enter into the Agreement (defined below) pursuant to which, among other things, the Company will be merged with and into Merger Sub, and Merger Sub shall be the surviving company (the “Acquisition”) and that, in connection with the Acquisition each outstanding share of common stock, par value $1.25 per share, of the Company (the “Company Common Shares”) (other than Company Common Shares that are owned directly by the Company (other than Trust Account Shares (as defined in the Agreement) and DPC Shares (as defined in the Agreement) or Acquiror or any of its affiliates (collectively, the “Excluded Shares”)) will be converted into the right to receive, subject to an election, the following, without interest (i) $40.00 in cash or (ii) 2.15 common shares, without par value, of the Acquiror (the “Merger Consideration”), subject to 70% of Company Common Shares being exchanged for common shares of the Acquiror and 30% of Company Common shares being exchanged for cash. TheBoard of Directors of the Company (the “Board”) has requested ourthat Raymond James & Associates, Inc. (“Raymond James”) provide an opinion (the “Opinion”) to the Board as to whether, as of the fairness,date hereof, the Merger Consideration to be received by the holders of the Company Common Shares (other than Excluded Shares) in the Acquisition is fair from a financial point of view to Monitor Bancorp, Inc. (“Company”)such holders. For purposes of this Opinion, and its shareholders,with your consent, we have assumed that the value of the terms of the Agreement and Plan of Merger dated as of March 13, 2017 (the “Agreement”) by and between Farmers National Banc Corp. (“Purchaser”) and Company. The Agreement provides for merger of Company with and into Purchaser, with Purchaser being the surviving company. Capitalized terms used herein without definition shall have the meanings given to such terms in the Agreement.

The financial terms of the Agreement provide for the Merger Consideration to be determined as follows:

(1)The Maximum Value of the Merger Consideration shall be determined by multiplying Company’s Adjusted Shareholders’ Equity by 1.25. The Adjusted Shareholders’ Equity equals Company Shareholders’ Equity as of March 31, 2017, plus the after-tax gain on the sale of Lifetime Financial Advisors LLC (d.b.a. Monitor Wealth Group “MWG”).

(2)The Minimum Value of the Merger Consideration shall be determined by multiplying Company’s Adjusted Shareholders’ Equity by 1.15.

The Agreement provides for each share of Company common stock to receive, at the election of the holder, either: (i) cash in an amount equal to the Maximum Value divided by 10,000 (“Cash Value per Company Share”), which is presently estimated at $779.0228$38.23 per share (rounded to four decimal places); or (ii) stock based on the conversionAcquiror’s closing stock price of each Company Common Share into Purchaser Common Shares based$17.43 on the Final Exchange Ratio (“Stock Consideration”). The shareholder election process is subject to proration such that 85 percent of Company Common Shares shall be paid the Stock Consideration and all other Company Common Shares shall be paid the Cash Consideration.March 22, 2022.

The Initial Exchange Ratio for the Stock Consideration is estimated at 58.5489, and was determined by dividing the estimated Cash Value per Share of $779.0228 by $13.3055, which is the twenty (20) trading day volume weighted average closing price (“Initial VWAP”) of Purchaser ending February 10, 2017.

Article 1.4(d) of the Agreement describes a process that could result in an adjustment to the Initial Exchange Ratio for the Stock Consideration. Based on the Final VWAP of Purchaser, if the aggregate Merger Consideration is between the Minimum Value and the Maximum Value, there will be no adjustment to the Initial Exchange Ratio and the Initial Exchange Ratio will be the Final Exchange Ratio. If the aggregate Merger Consideration is less than the Minimum Value, the Initial Exchange Ratio will be adjusted upward so that the aggregate Merger Consideration equals the Minimum Value. If the aggregate Merger Consideration is greater than the Maximum Value, the Initial Exchange Ratio will be adjusted downward so the aggregate Merger Consideration equals the Maximum Value.

Austin Associates, LLC (“Austin”) as part of its investment banking practice is customarily engaged in advising and valuing financial institutions in connection with mergers and acquisitions and other corporate transactions. In connection with our review of the rendering our opinion set forth herein,proposed Acquisition and the preparation of this Opinion, we have, reviewed among other things:

 

 (i)1.

reviewed the financial terms and conditions as stated in the draft of the Agreement and Plan of Merger dated as of March 13, 2017;21, 2022 (the “Agreement”);

 

 (ii)2.

reviewed certain publiclyinformation related to the historical condition and prospects of the Company, as made available to Raymond James by or on behalf of the Company, including, but not limited to, financial statements and other historical financial information of Company and Purchaser that we deemed relevant;

D - 1

Board of Directors

Monitor Bancorp, Inc.

Page 2

March 13, 2017

(iii)certain non-public internal financial and operating data of Company and Purchaser that wereprojections prepared and provided to us by the respective management of the Company and Purchaser;for the periods ending December 31, 2022 through 2026, as approved for our use by the Company (the “Projections”);

 

 (iv)3.internal

reviewed the Company’s audited financial projections for Purchaserstatements for the year endingyears ended December 31, 2017 prepared by management of Purchaser;2021, December 31, 2020 and December 31, 2019;

 

 (vi)4.

reviewed the pro formaCompany’s unaudited financial impactstatements for the quarterly periods ended September 30, 2021, June 30, 2021 and March 31, 2021 and the Company’s unaudited balance sheet as of February 28, 2022, and statement of income for the Merger on Purchaser, based on assumptions relating to transaction expenses, preliminary purchase accounting adjustments and cost savings as discussed with representatives of Purchaser;two months then ended.

 

 (vi)5.publicly reported historical price

reviewed the Company’s recent public filings and trading activity for Purchaser’s common stock, including an analysis of certain financial and stock market information of Purchaser compared to certain other publicly traded companies;available information regarding the Company;

 

 (vii)6.

reviewed the financial and operating performance of the Company and those of other selected public companies that we deem to be relevant;

222 South Riverside Plaza – 7th Floor // Chicago, IL 60606

T 312.612.7785 // raymondjames.com

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

7.

considered certain publicly available financial terms of certain recent business combinations in the commercial banking industry,transactions that we deem to the extent publicly available;be relevant;

 

 (viii)8.

reviewed the current and historical market environment generallyprices of the publicly traded securities of the Company, and the banking environment in particular;current and historical market prices of the publicly traded securities of certain other companies that we deemed to be relevant;

 

 (ix)9.

conducted such other information, financial studies, analyses and investigationsinquiries and financial, economicconsidered such other information and market criteriafactors as we considered relevant.deemed appropriate;

We also

10.

received a certificate addressed to Raymond James from a member of senior management of the Company regarding, among other things, the accuracy of the information, data and other materials (financial or otherwise) provided to, or discussed with, Raymond James by or on behalf of the Company; and

11.

discussed with members of the senior management of the Company certain information relating to the aforementioned and any other matters which we have deemed relevant to our inquiry including, but not limited to, the past and current business operations of the Company and the financial condition and future prospects and operations of the Company.

With your consent, we have assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of the Company or otherwise reviewed by or discussed with certain membersus, and we have undertaken no duty or responsibility to, nor did we, independently verify any of seniorsuch information. We have not made or obtained an independent appraisal of the assets or liabilities (contingent or otherwise) of the Company. With respect to the Projections and any other information and data provided to or otherwise reviewed by or discussed with us, we have, with your consent, assumed that the Projections and such other information and data have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of Company the business, financial condition, results of operations and prospects of Company, including certain operating, regulatory and other financial matters.

Management of Company, and Purchaser, respectively,we have representedrelied upon the Company to advise us promptly if any information previously provided became inaccurate or was required to be updated during the period of our review. We express no opinion with respect to the Projections or the assumptions on which they are based. We have assumed that there has been no material adverse change in their respective company’s assets, financial condition, results of operations, business or prospects since the datefinal form of the most recent financial statements made availableAgreement will be substantially similar to us. Wethe draft reviewed by us, and that the Acquisition will be consummated in accordance with the terms of the Agreement without waiver or amendment of any conditions thereto. Furthermore, we have assumed, in all respects material to our analysis, that Company and Purchaser will remain as going concerns for all periods relevant to our analyses, that all of the representations and warranties of each party contained in the Agreement are true and correct as of the date of the Agreement and the closing of the Acquisition and that each party to the Agreement will perform all of the covenants and agreements required to be performed by such partyit under the Agreement and that the conditions precedent in the Agreement are notwithout being waived. Finally, weWe have relied upon the advice Company has received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the Agreement.

In our review and analysis, we relied upon and assumed, without independent verification, that (i) the accuracyAcquisition will be consummated in a manner that complies in all respects with all applicable international, federal and completenessstate statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Acquisition will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the Acquisition or the Company that would be material to our analyses or this Opinion.

Our opinion is based upon market, economic, financial and other circumstances and conditions existing and disclosed to us as of March 22, 2022 and any material change in such circumstances and conditions would require a reevaluation of this Opinion, which we are under no obligation to undertake. We have relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to us that would be material to our analyses or this Opinion, and that there is no information or any facts that would make any of the information provided toreviewed by us incomplete or publicly available, and have not attempted to verifymisleading in any material respect.

LOGO

As the same. As part of the due diligence process we made no independent verificationBoard is aware, there is significant uncertainty as to the statuspotential direct and value of Company’s or Purchaser’s assets, including the valueindirect business, financial, legal, economic and social implications and consequences of the loan portfoliospread of the coronavirus and allowance for loan and lease losses, and have instead relied upon representations and information concerning the value of assetsassociated illnesses and the adequacyactions and measures that countries, governments, regulatory agencies, central banks, international financing and funding organizations, stock markets, businesses and individuals may take to address the spread of reservesthe coronavirus and associated illnesses including, without limitation, those actions and measures pertaining to fiscal or monetary policies, legal and regulatory matters and the credit, financial and stock markets (collectively, the “Pandemic Effects”). We express no opinion or view as to the potential impact of both companiesthe Pandemic Effects on our analysis, this Opinion, the Acquisition, the Company or the Acquiror. As the Board is aware, the credit, financial and stock markets have been experiencing unusual volatility due in part to the aggregate. In addition, we have assumedmilitary conflict between Russia and Ukraine and Raymond James expresses no opinion or view as to any potential effects of such volatility on the Acquisition, the Company, or Acquiror and this Opinion does not purport to address potential developments in any such markets.

We express no opinion as to the courseunderlying business decision to effect the Acquisition, the structure or tax consequences of obtaining the necessary approvalsAcquisition or the availability or advisability of any alternatives to the Acquisition. We provided financial advice to the Company with respect to the proposed Acquisition. We did not, however, recommend any specific amount of consideration or that any specific consideration constituted the only appropriate consideration for the transaction, no condition will be imposedAcquisition. This letter does not express any opinion as to the likely trading range of the common shares of the Acquiror following the Acquisition, which may vary depending on numerous factors that will have a material adverse effectgenerally impact the price of securities or on the contemplated benefitsfinancial condition of the transaction to Company and its shareholders.

This opinion is based on economic and market conditions and other circumstances existing on, and information made available as of, the date hereof. ThisAcquiror at that time. Our opinion is limited to the fairness, from a financial point of view, to Company and its shareholders of the termsMerger Consideration to be received by the holders of the Agreement, and does not addressCompany Common Shares (other than Excluded Shares).

We express no opinion with respect to any other reasons, legal, business, or otherwise, that may support the underlying business decision byof the Board of Directors to pursueapprove or consummate the Merger.Acquisition. Furthermore, no opinion, counsel or interpretation is intended by us on matters that require legal, accounting or tax advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, we have relied, with the consent of the Board, on the fact that the Company has been assisted by legal, accounting and tax advisors and we have, with the consent of the Board, relied upon and assumed the accuracy and completeness of the assessments by the Company and its advisors as to all legal, accounting and tax matters with respect to the Company and the Acquisition, including, without limitation, that the Acquisition will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

In formulating our opinion, we have considered only what we understand to be the Merger Consideration to be received by the holders of Company Common Shares as is described above and we did not consider and we express no opinion on the fairness of the amount or nature of any compensation to be paid or payable to any person or entity (including any of the Company’s officers, directors or employees) or class of such persons and/or entities, whether relative to the compensation received by the holders of the Common Shares or otherwise. We have not been requested to opine as to, and this Opinion does not express an opinion as to or otherwise address, among other things: (1) the fairness of the Acquisition to the holders of any class of securities, creditors, or other constituencies of the Company, or to any other party, except and only to the extent expressly set forth in the last sentence of this Opinion or (2) the fairness of the Acquisition to any one class or group of the Company’s or any other party’s security holders or other constituencies vis-à-vis any other class or group of the Company’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the Acquisition amongst or within such classes or groups of security holders or other constituents). We are not expressing any opinion as to the impact of the Acquisition on the solvency or viability of the Company or the Acquiror or the ability of the Company or the Acquiror to pay their respective obligations when they come due.

 

D - 2LOGO

BoardThe delivery of Directorsthis opinion was approved by our opinion committee.

Monitor Bancorp, Inc.

Page 3

March 13, 2017

Austin reservesWe have been engaged to render financial advisory services to the right to review any public disclosures describing this fairness opinion or its firm. Austin has receivedCompany in connection with the proposed Acquisition and will receive a fee for itssuch services, in preparing$25,000 of which has already been paid to Raymond James as a retainer and the remainder of which is contingent upon consummation of the Acquisition. We will also receive a fee upon the delivery of this fairness opinion. Austin’s feeOpinion, which is not contingent upon closingthe successful completion of the Merger.Acquisition or on the conclusion reached herein. In addition, the Company has agreed to reimburse certain of our expenses and to indemnify Austinus against certain liabilities.liabilities arising out of our engagement.

In the ordinary course of our business, Raymond James may trade in the securities of the Company and the Acquiror for our own account or for the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities. In the two years preceding the date of this letter, Raymond James has: (i) provided investment banking advisory services to the Company that were unrelated to the Acquisition, for which Raymond James received a retainer fee, (ii) engaged in certain fixed income trading activity with The Farmers National Bank of Emlenton, a subsidiary of the Company, for which Raymond James earned income, (iii) provided investment banking advisory services to the Acquiror in connection with the acquisition of Cortland Bancorp for which Raymond James received fees, (iv) provided investment banking services to the Acquiror in connection with a private debt offering for which Raymond James received fees and (v) engaged in certain trading activity with The Farmers National Bank of Canfield and Farmers Trust Company, each a subsidiary of the Acquiror, for which it earned income. Furthermore, Raymond James may provide investment banking, financial advisory and other financial services to the Company and/or the Acquiror or other participants in the Acquisition in the future, for which Raymond James may receive compensation.

It is understood that this letter is for the information of the Board of Directorsof the Company (solely in each director’s capacity as such) in evaluating the proposed Acquisition and does not constitute a recommendation to the Board of Directorsor any shareholder of the Company or the Acquiror regarding how said shareholder should act or vote with respect to the proposed Acquisition or any other matter nor is this letter intended to confer rights or remedies upon the Company or the shareholders of the Company and may not be relied upon by any other person or entity (including, without limitation, security holders, creditors or other constituencies of the Company) or used for any other purpose without our prior written consent. Furthermore, this letter should not be construed as creating any fiduciary duty on our part to any such party. This Opinion may not be disclosed, reproduced, quoted, summarized, referred to at any time, in any manner, or used for any other purpose, nor shall any references to Raymond James or any of its affiliates be made, without our prior written consent, except that this Opinion may be disclosed in and filed with a proxy statement used in connection with the Acquisition that is required to be filed with the Securities and Exchange Commission, provided that this Opinion is quoted in full in such proxy statement.

Based upon our analysis and subject to the qualifications described herein, we believeforegoing, it is our opinion that, as of the date of this letter,hereof, the termsMerger Consideration to be received by the holders of the Company Common Shares (other than Excluded Shares) in the Acquisition pursuant to the Agreement areis fair, from a financial point of view, to Company and its shareholders.such holders.

Respectfully,Very truly yours,

ProBank AustinLOGO

RAYMOND JAMES & ASSOCIATES, INC.

 

D - 3LOGO

PART II

INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENTPROSPECTUS

Item 20. Indemnification of Directors and Officers.

 

 (a)

Ohio General Corporation Law

Section 1701.13(E) of the Ohio Revised Code grants corporations broad powers to indemnify directors, officers, employees and agents. Section 1701.13(E) provides:

(E)(1) A corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that hethe person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney’s fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by himthe person in connection with such action, suit, or proceeding, if hethe person acted in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if hethe person had no reasonable cause to believe histhe person’s conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, hethe person had reasonable cause to believe that histhe person’s conduct was unlawful.

(2) A corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that hethe person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney’s fees, actually and reasonably incurred by himthe person in connection with the defense or settlement of such action or suit, if hethe person acted in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any of the following:

(a) Any claim, issue, or matter as to which such person is adjudged to be liable for negligence or misconduct in the performance of histhe person’s duty to the corporation unless, and only to the extent that, the court of common pleas or the court in which such action or suit was brought determines, upon application, that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper;

(b) Any action or suit in which the only liability asserted against a director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee, officer, employee, member, manager, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in division (E)(1) or (2) of this section, or in defense of any claim, issue, or matter therein, hein the action, suit, or proceeding, the person shall be indemnified against expenses, including attorney’s fees, actually and reasonably incurred by himthe person in connection with the action, suit, or proceeding.

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(4) Any indemnification under division (E)(1) or (2) of this section, unless ordered by a court, shall be made by the corporation only as authorized in the specific case, upon a determination that indemnification of the

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director, trustee, officer, employee, member, manager, or agent is proper in the circumstances because hethe person has met the applicable standard of conduct set forth in division (E)(1) or (2) of this section. Such determination shall be made as follows:

(a) By a majority vote of a quorum consisting of directors of the indemnifying corporation who were not and are not parties to or threatened with the action, suit, or proceeding referred to in division (E)(1) or (2) of this section;

(b) If the quorum described in division (E)(4)(a) of this section is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation or any person to be indemnified within the past five years;

(c) By the shareholders;

(d) By the court of common pleas or the court in which the action, suit, or proceeding referred to in division (E)(1) or (2) of this section was brought.

Any determination made by the disinterested directors under division (E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this section shall be promptly communicated to the person who threatened or brought the action or suit by or in the right of the corporation under division (E)(2) of this section, and, within ten days after receipt of suchthat notification, suchthe person shall have the right to petition the court of common pleas or the court in which suchthe action or suit was brought to review the reasonableness of suchthat determination.

(5)(a) Unless at the time of a director’s act or omission that is the subject of an action, suit, or proceeding referred to in division (E)(1) or (2) of this section, the articles or the regulations of a corporation state, by specific reference to this division, that the provisions of this division do not apply to the corporation and unless the only liability asserted against a director in an action, suit, or proceeding referred to in division (E)(1) or (2) of this section is pursuant to section 1701.95 of the Revised Code, expenses, including attorney’s fees, incurred by a director in defending the action, suit, or proceeding shall be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the director in which hethe director agrees to do both of the following:

(i) Repay suchthat amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that histhe director’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interests of the corporation;

(ii) Reasonably cooperate with the corporation concerning the action, suit, or proceeding.

(b) Expenses, including attorney’s fees, incurred by a director, trustee, officer, employee, member, manager, or agent in defending any action, suit, or proceeding referred to in division (E)(1) or (2) of this section, may be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, as authorized by the directors in the specific case, upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, member, manager, or agent to repay suchthat amount, if it ultimately is determined that hethe person is not entitled to be indemnified by the corporation.

(6) The indemnification or advancement of expenses authorized by this section shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification or advancement of expenses under the articles, the regulations, any agreement, a vote of shareholders or disinterested directors, or otherwise, both as to action in their official capacities and as to action in another capacity while holding their offices or positions, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, member, manager, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

that

 

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person. A right to indemnification or to advancement of expenses arising under a provision of the articles or the regulations shall not be eliminated or impaired by an amendment to that provision after the occurrence of the act or omission that becomes the subject of the civil, criminal, administrative, or investigative action, suit, or proceeding for which the indemnification or advancement of expenses is sought, unless the provision in effect at the time of that act or omission explicitly authorizes that elimination or impairment after the act or omission has occurred.

(7) A corporation may purchase and maintain insurance or furnish similar protection, including, but not limited to, trust funds, letters of credit, or self-insurance, on behalf of or for any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against any liability asserted against himthe person and incurred by himthe person in any such capacity, or arising out of histhe person’s status as such, whether or not the corporation would have the power to indemnify himthe person against suchthat liability under this section. Insurance may be purchased from or maintained with a person in which the corporation has a financial interest.

(8) The authority of a corporation to indemnify persons pursuant to division (E)(1) or (2) of this section does not limit the payment of expenses as they are incurred, indemnification, insurance, or other protection that may be provided pursuant to divisions (E)(5),(6), and (7) of this section. Divisions (E)(1) and (2) of this section do not create any obligation to repay or return payments made by the corporation pursuant to divisionsdivision (E)(5),(6), or (7).

(9) As used in division (E) of this section, “corporation” includes all constituent entities in a consolidation or merger and the new or surviving corporation, so that any person who is or was a director, officer, employee, trustee, member, manager, or agent of such a constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, shall stand in the same position under this section with respect to the new or surviving corporation as hethe person would if hethe person had served the new or surviving corporation in the same capacity.

 

(b)

Articles of Incorporation, as amended, of Farmers National Banc Corp.

Article X of the Articles of Incorporation, as amended, provides for the indemnification of Farmers officers and directors as follows:

The corporation shall have power to, and may (in addition to such other power conferred by law) indemnify any shareholder, officer, or director of the corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, administrative, or investigative, by reason of the fact that he is or was a director of this corporation, or any corporation (hereinafter referred to as “subsidiary corporation”) of which more than 50 per cent of the issued and outstanding shares of common shares was or is owned by the corporation at the time such person was or is serving as such director of the “subsidiary corporation,” against expenses (including those reasonably incurred by him) in connection with such action, suit, and proceeding if the principal issue of such action, suit, or proceeding involved or involves a contract or transaction by and between the corporation and such “subsidiary corporation” and if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the “subsidiary corporation.” Any indemnification as above provided (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the standard of conduct set forth above has been met. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding; (b) if such a quorum is not obtainable, or even if obtainable, if a majority vote of a quorum of

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disinterested directors so directs, by independent legal counsel in a written opinion; or (c) by a majority of a quorum of the shareholders of the corporation consisting of shareholders who were not parties to such action, suit or proceeding.

 

(c)

Indemnification Agreements

Farmers presently maintains indemnification agreements with each of its directors and key officers, and maintains insurance for the benefit of persons entitled to indemnification.

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Item 21. Exhibits and Financial Statement Schedules.

 

 (a)

Exhibits

See the Index to Exhibits attached hereto.

 

(b)

Exhibit

Number

Description

  2.1Agreement and Plan of Merger by and among Emclaire Financial Corp., Farmers National Banc Corp., and FMNB Merger Subsidiary V, LLC, dated as of March  23, 2022 (included as Annex A to the proxy statement/prospectus forming a part of this Registration Statement). †
  3.1Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 4.1 to Farmers’ Registration Statement Scheduleson Form S-3 filed with the SEC on October 3, 2001).
  3.2Amendment to Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 3.1 to Farmers’ Current Report on Form 8-K filed with the SEC on May 1, 2013).
  3.3Amendment to Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 3.1 to Farmers’ Current Report on Form 8-K filed with the SEC on April 20, 2018).
  3.4Amended Code of Regulations of Farmers National Banc Corp. (incorporated by reference from Exhibit 3.1 to Farmers’ Current Report on Form 8-K filed with the SEC on April 17, 2020).
  4.1Reference is made to Article IV, Article X, Article XII, Article XIII, Article XIV, and Article XV of the Farmers Articles of Incorporation, as amended, and Article II, Article III, Article VIII and Article XI of the Farmers Amended Code of Regulations, which define rights of security holders.
  4.2Form of 3.125% Fixed to Floating Rate Subordinated Note Due 2031 (incorporated by reference from Exhibit 10.1 to Farmers’ Current Report on Form 8-K filed with the SEC on November 17, 2021).
  5.1Opinion of Vorys, Sater, Seymour and Pease LLP as to the legality of the securities being registered. (filed herewith)
  8.1Opinion of Vorys, Sater, Seymour and Pease LLP regarding certain tax matters.*
  8.2Opinion of Silver, Freedman, Taff & Tiernan LLPregarding certain tax matters.*
21.1Subsidiaries of Farmers National Banc Corp. (incorporated by reference from Exhibit 21 to Farmers’ Annual Report on Form 10-K filed with the SEC on March 9, 2022).
23.1Consent of CliftonLarsonAllen LLP, regarding Farmers National Banc Corp. (filed herewith)
23.2Consent of Crowe LLP, regarding Emclaire Financial Corp. (filed herewith)
23.3Consent of BKD, LLP, regarding Emclaire Financial Corp. (filed herewith)
23.4Consent of Vorys, Sater, Seymour and Pease LLP (included as part of its opinion filed as Exhibit 5.1).

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Exhibit

Number

Description

23.5Consent of Vorys, Sater, Seymour and Pease LLP (included as part of its opinion filed as Exhibit 8.1).*
23.6Consent of Silver, Freedman, Taff & Tiernan LLP (included as part of its opinion filed as Exhibit 8.2).*
24.1Power of Attorney (filed herewith)
99.1Consent of Raymond James & Associates, Inc. (filed herewith)
99.2Form of Proxy Card to be used by Emclaire Financial Corp.*
107Filing Fee Table (filed herewith)

†

Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.

*

To be filed by amendment.

Item 22. Undertakings.

A. The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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C. The undersigned Registrant hereby undertakes that prior to any public reoffering of the securities registered hereunder through use of a prospectus that is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

D. The Registrant undertakes that every prospectus (1) that is filed pursuant to paragraph C. immediately preceding, or (2) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to

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the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof.

E. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

F. The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10 (b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

G. The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

[SIGNATURE PAGE TO IMMEDIATELY FOLLOW]

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 2 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Canfield, State of Ohio, on July 17, 2017.May 13, 2022.

 

Farmers National Banc Corp.FARMERS NATIONAL BANC CORP.
By: 

/s/ Kevin J. Helmick

 Kevin J. Helmick, President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated onJuly 17, 2017.on May 13, 2022.

 

Signature

  

Title

/s/ Kevin J. Helmick

Kevin J. Helmick

  President, Chief Executive Officer and Director (Principal
(Principal Executive Officer)
Kevin J. Helmick

/s/ Carl D. Culp

Carl D. CulpA. Troy Adair

  

Executive Vice President, Secretary and Treasurer (PrincipalChief Financial Officer

(Principal Financial Officer)

A. Troy Adair

/s/ Joseph W. Sabat

Chief Accounting Officer

(Principal Accounting Officer)

Joseph W. Sabat

Controller (Principal Accounting Officer)

*

/s/ Gregory C. Bestic *

  Director
Gregory C. Bestic

/s/ Anne Frederick Crawford *

Lance J. Ciroli

  Director
Anne Frederick Crawford  

Director
Neil J. Kaback

/s/ Ralph D. Macali *

Director
Ralph D. Macali

/s/ Frank J. Monaco*

Director
Frank J. Monaco

/s/ Terry A. Moore *

Director
Terry A. Moore

/s/ Edward W. Muransky*

Director
Edward W. Muransky

/s/ David Z. Paull *

Director, Vice Chairman of the Board
David Z. Paull

/s/ James R. Smail *

Anne Frederick Crawford

  Director, Chairman of the Board
James R. Smail

/s/ Richard B. Thompson *

  Director

*

Ralph D. Macali

Richard B. Thompson		  Director

*

Terry A. Moore

Director

*

Edward W. Muransky

Director

*

David Z. Paull

Director

*

Earl R. Scott

Director

*

James R. Smail

Director

*

Gregg Strollo

Director

 

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*

The undersigned, by signing his name hereto, does hereby sign this Amendment No. 2 to Registration Statement on FormS-4 on behalf of each of the directors of the Registrant identified above pursuant to a Power of Attorney executed by the directors identified above, which Power of Attorney has been filed with this Registration Statement on FormS-4 as Exhibit 24.1.

 

/s/ Kevin J. Helmick

  

Attorney-in-Fact

Date: May 13, 2022

Kevin J. Helmick

Attorney-in-Fact

  

 

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EXHIBIT INDEX

Exhibit

Number

Description

  2.1Agreement and Plan of Merger dated as of March 13, 2017, by and among Monitor Bancorp, Inc., Farmers National Banc Corp. and FMNB Merger Subsidiary II, LLC (included as Annex B to the proxy statement/prospectus contained in this Registration Statement).*
  3.1Articles of Incorporation of Farmers National Banc Corp., as amended (incorporated by reference from Exhibit 4.1 to Farmers’ Registration Statement on FormS-3 filed with the Commission on October 3, 2001 (FileNo. 333-70806), and by reference from Exhibit 3.1 to Farmers’ Current Report on Form8-K filed with the Commission on May 1, 2013).
  3.2Amended Code of Regulations of Farmers National Banc Corp. (incorporated by reference from Exhibit 3.2 to Farmers’ Quarterly Report on Form10-Q for the fiscal quarter ended June 30, 2011, filed with the Commission on August 9, 2011).
  5.1Opinion of Vorys, Sater, Seymour and Pease LLP as to the legality of the securities being registered.**
  8.1Opinion of Vorys, Sater, Seymour and Pease LLP regarding certain tax matters.**
  8.2Opinion of Critchfield, Critchfield & Johnston, Ltd. regarding certain tax matters.**
23.1Consent of Crowe Horwath LLP, independent registered public accounting firm for Farmers National Banc Corp.***
23.2Consent of Vorys, Sater, Seymour and Pease LLP (included as part of its opinion filed as Exhibit 5.1).
23.3Consent of Vorys, Sater, Seymour and Pease LLP (included as part of its opinion filed as Exhibit 8.1).
23.4Consent of Critchfield, Critchfield & Johnston, Ltd. (included as part of its opinion filed as Exhibit 8.2).
24.1Power of Attorney.**
99.1Consent of ProBank Austin.**
99.2Form of Proxy Card to be used by Monitor Bancorp, Inc.**

*Pursuant to Item 601(b)(2) of RegulationS-K, Farmers agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Agreement and Plan of Merger to the SEC upon request.
**Previously filed.
***Filed herewith.

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