Farmers National Banc (FMNB) 8-K 2014 Second Quarter Financial Results

Exhibit 99.1

July 23, 2014

Press Release

Source: Farmers National Banc Corp.

Kevin J. Helmick, President and CEO

20 South Broad Street P.O. Box 555

Canfield, OH 44406

330.533.3341

Email:exec@farmersbankgroup.com

FARMERS NATIONAL BANC CORP. ANNOUNCES

2014 SECOND QUARTER FINANCIAL RESULTS

• 126 consecutive quarters of profitability

• Net income per diluted share for three months ended June 30, 2014 was $0.13, an increase of 30% compared to $0.10 for the second quarter, 2013

• Efficiency ratio for the second quarter improved to 69.68%, compared to 77.16% for the same quarter in 2013

• Loans increased 6.9% since June 30, 2013

• Non-performing assets to total assets remain at low levels, 0.75% at June 30, 2014

CANFIELD, Ohio (July 23, 2014) – Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three and six months ended June 30, 2014.

Net income for the three months ended June 30, 2014 was $2.4 million, or $0.13 per diluted share, which compares favorably to $1.9 million, or $0.10 per diluted share for the second quarter ended June 30, 2013. Net income for the six months ended June 30, 2014 was $4.5 million, a 17.3% increase compared to $3.9 million for the same period in 2013. On a per share basis, net income for the six months ended June 30, 2014 was $0.24, an increase of 14.3% compared to the six month period ended June 30, 2013.

Kevin J. Helmick, President and CEO, stated, “Our improvement in net income for the six months ended June 30, 2014 and the second quarter of 2014 is a result of our continued focus on increasing fee income and control of noninterest expenses. The continued focus on increasing fee-based revenues and reducing expenses has also contributed to an improvement in our efficiency ratio to 69.8% from 74.9% during the first six months of 2014 compared to the same period in 2013. It is important to note that noninterest income has increased 17.7% in comparing the second quarter of 2014 to the second quarter of 2013, while noninterest expenses decreased 4.5%. We are also pleased to report that loans increased 6.9% in the past twelve months.”

2014 Second Quarter Financial Highlights

• Loan growth

Total loans were $637.8 million at June 30, 2014, compared to $596.8 million at June 30, 2013. This represents an increase of 6.9%. The increase in loans is a direct result of Farmers’ focus on loan growth utilizing a talented lending and credit team while adhering to a sound underwriting discipline. Most of the increase in loans has occurred in the commercial real estate, commercial and industrial and residential real estate loan portfolios. Loans comprised 58.8% of the Bank’s average earning assets in 2014, an improvement compared to 56.1% in 2013.

• Loan quality

Non-performing assets to total assets remain at a safe level, currently at 0.75%. Early stage delinquencies also continue to remain at low levels, at $3.5 million or 0.54% of total loans at June 30, 2014.

• Net interest margin

The net interest margin for the quarter ended June 30, 2014 was 3.54%, a decrease of 2 basis points from 3.56% reported for the quarter ended March 31, 2014. Asset yields decreased 5 basis points, while the cost of interest-bearing liabilities decreased 2 basis points.

• Noninterest income

Noninterest income was $3.8 million for the second quarter of 2014, a 17.7% improvement compared to the same quarter in 2013. Trust fees increased $161 thousand or 11.6% and service charges on deposit accounts also increased $90 thousand or 17.2%. The company also added $272 thousand in retirement plan consulting fees earned from the entity acquired in July 2013, National Associates, Inc.

• Noninterest expenses

The Company underwent a cost reduction program in 2013 that included the closure of two retail branch locations and the elimination of several full time positions. During the first six months of 2014, the company has remained committed to keeping noninterest expenses at a more manageable level. As a result of these actions, the Company’s noninterest expenses decreased to $9.4 million for the quarter ended June 30, 2014, compared to the $9.8 million reported in the second quarter in 2013.

2014 Outlook

Mr. Helmick continued: “Following a slow first quarter in terms of loan growth and fee income, we were pleased with improvements in both of these areas during the second quarter. We continue to look forward to the ensuing quarters as the economic outlook begins to improve. We also continue our discipline of closely monitoring levels of non-interest expense while growing non-interest revenues.”

Farmers National Banc Corp. is the bank holding company for the Farmers National Bank of Canfield, Farmers National Insurance, LLC, Farmers Trust Company and National Associates, Inc. Farmers’ operates eighteen banking offices throughout Mahoning, Trumbull, Columbiana and Stark Counties and two trust offices located in Boardman and Howland. Farmers offers a wide range of banking and investment services to companies and individuals, and maintains a website atwww.farmersbankgroup.com.

Non-GAAP Disclosure

This press release includes disclosures of Farmers tangible common equity ratio and pre-tax, pre-provision income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2013, which has been filed with the Securities and Exchange Commission and is available on Farmers’ website (www.farmersbankgroup.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries

Consolidated Financial Highlights

(Amounts in thousands, except per share results) Unaudited

Consolidated Statements of Income

	For the Three Months Ended															For the Six Months Ended
	June 30, 2014			March 31, 2014			Dec. 30, 2013			Sept 30, 2013			June 30, 2013			June 30, 2014			June 30, 2013			Percent Change
Total interest income	$	10,118		$	10,063		$	10,298		$	10,122		$	10,273		$	20,181		$	20,539			-1.7	%
Total interest expense		1,166			1,207			1,257			1,274			1,234			2,373			2,532			-6.3	%
Net interest income		8,952			8,856			9,041			8,848			9,039			17,808			18,007			-1.1	%
Provision for loan losses		300			330			525			340			170			630			425			48.2	%
Other income		3,797			3,433			3,641			4,173			3,225			7,230			6,100			18.5	%
Other expense		9,378			9,141			9,221			10,926			9,822			18,519			18,910			-2.1	%
Income before income taxes		3,071			2,818			2,936			1,755			2,272			5,889			4,772			23.4	%
Income taxes		720			627			641			143			404			1,347			899			49.8	%
Net income	$	2,351		$	2,191		$	2,295		$	1,612		$	1,868		$	4,542		$	3,873			17.3	%
Average shares outstanding		18,781			18,778			18,776			18,776			18,747			18,780			18,771
Pre-tax pre-provision income	$	3,371		$	3,148		$	3,461		$	2,095		$	2,442		$	6,519		$	5,197
Basic and diluted earnings per share		0.13			0.12			0.12			0.09			0.10			0.24			0.21
Cash dividends		563			563			563			563			557			1,127			1,121
Cash dividends per share		0.03			0.03			0.03			0.03			0.03			0.06			0.06
Performance Ratios
Net Interest Margin (Annualized)		3.54	%		3.56	%		3.53	%		3.47	%		3.63	%		3.55	%		3.65	%
Efficiency Ratio (Tax equivalent basis)		69.68	%		69.87	%		67.96	%		81.64	%		77.16	%		69.77	%		74.88	%
Return on Average Assets (Annualized)		0.83	%		0.78	%		0.78	%		0.56	%		0.66	%		0.80	%		0.69	%
Return on Average Equity (Annualized)		7.85	%		7.65	%		7.23	%		5.60	%		6.21	%		7.74	%		6.48	%
Dividends to Net Income		23.95	%		25.70	%		24.53	%		34.93	%		29.82	%		24.81	%		28.94	%

Consolidated Statements of Financial Condition

	June 30, 2014			March 31, 2014			Dec. 30, 2013			Sept 30, 2013			June 30, 2013
Assets
Cash and cash equivalents	$	28,070		$	29,333		$	27,513		$	40,303		$	26,587
Securities available for sale		409,285			427,625			422,985			438,127			443,833
Loans held for sale		275			1,026			158			1,016			4,612
Loans		637,774			626,186			630,684			611,349			596,838
Less allowance for loan losses		7,356			7,387			7,568			7,369			7,590
Net Loans		630,418			618,799			623,116			603,980			589,248
Other assets		65,238			64,217			63,554			64,693			59,209
Total Assets	$	1,133,286		$	1,141,000		$	1,137,326		$	1,148,119		$	1,123,489
Liabilities and Stockholders’ Equity
Deposits	$	907,443		$	923,033		$	915,216		$	903,410		$	901,886
Other interest-bearing liabilities		93,807			92,815			101,439			118,322			101,589
Other liabilities		11,016			7,829			7,664			13,863			5,698
Total liabilities		1,012,266			1,023,677			1,024,319			1,035,595			1,009,173
Stockholders’ Equity		121,020			117,323			113,007			112,524			114,316
Total Liabilities and Stockholders’ Equity	$	1,133,286		$	1,141,000		$	1,137,326		$	1,148,119		$	1,123,489
Period-end shares outstanding		18,781			18,781			18,776			18,776			18,547
Book value per share	$	6.44		$	6.25		$	6.02		$	5.99		$	6.16
Tangible book value per share		5.91			5.71			5.47			5.43			5.85
Capital and Liquidity
Total Capital to Risk Weighted Assets (a)		16.71	%		16.51	%		16.26	%		16.28	%		17.25	%
Tier 1 Capital to Risk Weighted Assets (a)		15.67	%		15.47	%		15.19	%		15.22	%		16.08	%
Tier 1 Capital to Average Assets (a)		9.89	%		9.73	%		9.36	%		9.29	%		9.64	%
Equity to Asset Ratio		10.68	%		10.28	%		9.94	%		9.80	%		10.18	%
Tangible Common Equity Ratio		9.89	%		9.48	%		9.11	%		8.96	%		9.71	%
Net Loans to Assets		55.63	%		54.23	%		54.79	%		52.61	%		52.45	%
Loans to Deposits		70.28	%		67.84	%		68.91	%		67.67	%		66.18	%
Asset Quality
Non-performing loans (b)	$	8,140		$	8,494		$	9,091		$	9,124		$	8,079
Other Real Estate Owned		352			174			171			208			295
Non-performing assets		8,492			8,668			9,262			9,332			8,374
Loans 30 - 89 days delinquent (b)		3,460			2,473			3,600			2,348			2,497
Charged-off loans		650			836			620			915			456
Recoveries		319			325			294			354			367
Net Charge-offs		331			511			326			561			89
Annualized Net Charge-offs to Average Net Loans Outstanding		0.21	%		0.34	%		0.22	%		0.38	%		0.06	%
Allowance for Loan Losses to Total Loans		1.15	%		1.18	%		1.20	%		1.21	%		1.27	%
Non-performing Loans to Total Loans		1.28	%		1.36	%		1.44	%		1.49	%		1.35	%
Allowance to Non-performing Loans		90.37	%		86.97	%		83.25	%		80.77	%		93.95	%
Non-performing Assets to Total Assets		0.75	%		0.76	%		0.81	%		0.81	%		0.75	%

(a) June 30, 2014 ratio is estimated

(b) Amounts reported are unpaid principal balance

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
	June 30, 2014		March 31, 2014		Dec. 30, 2013		Sept 30, 2013		June 30, 2013
Stockholders’ Equity	$	121,020	$	117,323	$	113,007	$	112,524	$	114,316
Less Goodwill and other intangibles		9,960		10,151		10,343		10,546		5,836
Tangible Common Equity	$	111,060	$	107,172	$	102,664	$	101,978	$	108,480
Reconciliation of Total Assets to Tangible Assets
	June 30, 2014		March 31, 2014		Dec. 30, 2013		Sept 30, 2013		June 30, 2013
Total Assets	$	1,133,286	$	1,141,000	$	1,137,326	$	1,148,119	$	1,123,489
Less Goodwill and other intangibles		9,960		10,151		10,343		10,546		5,836
Tangible Assets	$	1,123,326	$	1,130,849	$	1,126,983	$	1,137,573	$	1,117,653

Reconciliation of Income Before Taxes to Pre-Tax, Pre-Provision Income
	For the Three Months Ended										For the Six Months Ended
	June 30, 2014		March 31, 2014		Dec. 30, 2013		Sept 30, 2013		June 30, 2013		June 30, 2014		June 30, 2013
Income before income taxes	$	3,071	$	2,818	$	2,936	$	1,755	$	2,272	$	5,889	$	4,772
Provision for loan losses		300		330		525		340		170		630		425
Pre-tax, pre-provision income	$	3,371	$	3,148	$	3,461	$	2,095	$	2,442	$	6,519	$	5,197