President's Letter | The Year In Review | Highlights of 2003

To Our Shareholders,

On behalf of the directors and employees of Farmers National Banc Corp., I am pleased to present our Annual Report to shareholders for the year 2003.

In more ways than one, this past year will be remembered as a very special year for your company.

Our continued focus on the strategic initiatives of successful community-based banking led to record-setting levels of performance for your company. In 2003, Farmers National Banc Corp. realized significant growth in assets, loans, deposits and net income realtive to a year ago. All this was accomplished as we completed a new Corporate Office building project that will support future growth and expansion for many years into the future.

The results of this past year affirm the wisdom of our corporate vision...

• To build long-term shareholder value through effective risk management
• Improve on consistent and diversified sources of income
• Maintain a planned growth pattern for this company

As illustrated on the cover of this report and by the theme of this report, we recognize that such an outstanding year reflects the sum of the efforts of many people. Specifically, we recognize the talents and cohesive efforts of our employees meshing like those of the members of a finely tuned orchestra, reaching performance and customer service standards that set this company apart from others.

As shown by following this link to highlights of our 2003 financial performance, we made solid progress toward our goals.

I would like to thank our many customers for their loyal patronage over past years. Our dedication to serve them in a friendly professional manner is at the forefront of our thinking. We have an excellent leadership team in place and they have worked extremely hard for this company. Many thanks to all our employees and officers for their dedication and commitment in 2003 Ê producing another rewarding year for our shareholders. Special appreciation goes out to our directors for the leadership and guidance they have provided so generously over the past year. This team is fully committed to you Ê our shareholders.

I hope you are pleased with the value of your investment in this company and the efforts we have made to enhance that value. My expectations are very high for 2004 " as we continue to execute our long-range business plan for this company.

I invite you to read more about our company that is included within this Annual Report, and hope you are able to join us at our Annual Meeting of Shareholders in March.

Sincerely,

Frank L. Paden, President & CEO