PURPOSE

The Audit Committee (the "Committee") is appointed by the Board of Directors (The "Board") of Farmers National Banc Corp. (The "Company"). The primary function of the Committee is to assist the Board in fulfilling its oversight responsibilities to the shareholders, potential shareholders, the investment community and others relating to the Company's financial, operational and compliance information, primarily through:

• Overseeing management's conduct of the Company's financial reporting process and systems of internal accounting and financial controls;
• Overseeing the annual independent audit of the Company's financial statements;
• Monitoring the performance of the Company's internal audit function;
• Monitoring the independence and performance of the Company's independent auditors;
• Monitoring the Company's compliance with laws and regulations and ethic programs;
• Providing an avenue of communication among the independent auditors, management and the Board.

COMPOSITION

The Committee shall be appointed by the Board and consist of at least three Board members who are independent of management and the Company. Each member shall satisfy and comply with the independence, experience and financial expertise requirements of Rule 4200(a)(15) of the National Association of Securities Dealers, Inc. and Section 10A of the Securities Exchange Act of 1934, as amended by the Sarbanes-Oxley Act of 2002, and the rules promulgated thereunder. The members must be "financially literate" and, at a minimum, one member must be designated as a "financial expert" as defined by the Sarbanes-Oxley Act of 2002. The Committee shall establish a continuing education program for members.

MEETINGS

The Committee shall meet quarterly and/or call special meetings as circumstances dictate. The Board shall appoint a chairperson who will prepare and/or approve an agenda in advance of the meeting and maintain minutes and/or records of meetings and activities of the Committee.

RESPONSIBILITIES AND DUTIES

The Audit Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of issuing an audit report or performing other audit, review or attest services and each registered public accounting firm must report directly to the Audit Committee. The primary responsibility of the Committee is to oversee the Company's financial reporting process and annual independent audit on behalf of the Board and report results of their activities to the Board. Management is responsible for preparing the Company's financial statements and the independent auditors are responsible for auditing those financial statements. The Committee should take appropriate action to set the overall corporate "tone" for quality financial reporting, sound business risk practices and ethical behavior.

General

• The Committee shall have the power to conduct or authorize investigations into any matters within the Committee's scope of responsibilities.
• The Committee shall have unrestricted access to Company personnel and documents and will be given resources to engage independent counsel, accountants or others as deemed appropriate to discharge its responsibilities.
• The Committee shall review and assess at least annually its charter, responsibilities and performance and shall report and make recommended changes to the Board for their approval.
• The Committee shall ensure inclusion of the then-current charter in the proxy statement at least once every three years and shall prepare annual Committee reports for inclusion in the proxy as required by the Securities and Exchange Commission (SEC).
• The Committee should meet at least annually with management, the Internal Auditor and the outside auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believes should be discussed privately.
• The Committee shall establish procedures for receipt, retention and treatment of complaints received by the Company concerning accounting, internal controls or auditing matters and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters or other complaints of Corporate or management wrongdoing reported pursuant to the Company Code of Conduct.

Overseeing Management's Conduct of the Company's Financial Reporting Process and Systems of Internal Accounting and Financial Controls

• The Committee shall review the effectiveness of or weaknesses in the Company's internal controls, including computerized information system controls and security, the overall control environment and accounting and financial controls.
• The Committee shall discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.
• The Committee shall arrange for periodic reports from management, independent auditors and internal auditor to assess the impact of significant regulatory changes and accounting or reporting developments that may affect the Company.
• Annually review with management and the independent auditor (i) the basis for disclosures made in the annual report to shareholders regarding the control environment of the Company, and (ii) the reports required under the Federal Deposit Insurance Corporation Improvement Act of 1991.

Overseeing the Annual Independent Audit of the Company's Financial Statements

• The Committee shall have a clear understanding with management and the independent auditors that the independent auditors are ultimately accountable to the Board and Committee, as representatives of the Company's shareholders.
• The Committee shall oversee the external audit coverage, including annual retention of the independent auditors, the scope of audit services, audit engagement letters, estimated fees, timing of auditor visits, coordination with internal audit, monitoring of audit results and review of independent auditor's performance and services.
• The Committee shall review the results of the independent auditors' annual audit and interim financial reviews to include: (1) annual financial statements and accompanying footnotes, (2) any significant changes required in the audit plans or scope, (3) any material differences or disputes with management encountered during the course of the audit, (4) any material management letter comments and management's responses to recommendations, (5) matters required to be discussed by Statement on Auditing Standards No. 61.
• The Committee is responsible for overseeing the resolution of any disputes between management and the independent auditors.
• The Committee shall inquire into any accounting adjustments that were noted or proposed by the independent auditors but were not recorded in the financial statements.
• The Committee shall review and discuss with management and the independent auditors the Company's audited financial statements to be included in the Company's annual report on Form 10-K and the independent auditors' opinion with respect to such, including any significant material events, transactions or operational issues affecting the financial statements and determine whether to make a recommendation to the Board to include the Company's audited financial statements in the annual report on Form 10-K. � The Committee shall review and discuss with management and the independent auditors and management the Company's interim financial statements to be included in the Company's quarterly report on form 10-Q prior to filing with the SEC.
• The Committee shall review and discuss with management and the independent auditors any significant estimates and judgements underlying the financial statements, all critical accounting policies and major changes to the Company's accounting principles and practices. � The Committee shall review and discuss the Company's disclosure under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in any reports or filings with the SEC.
• The Committee shall discuss with management and the independent auditors and approve any material transaction involving the Company and any related party and any material transaction involving the Company and any other party in which the parties' relationship could enable the negotiation of terms on other than an independent, arms'-length basis.

Overseeing the Performance of the Company's Internal Audit Function � The Committee shall review annually the Internal Audit Department Charter and recommend approval to the Board.

• The Committee shall review the appointment, replacement, reassignment, or dismissal of the external audit firm engaged to provide internal audit consulting services.
• The Committee shall review any difficulties the Internal Auditor (Or the external audit firm engaged to provide internal audit consulting services) encountered in the course of their audits, including any restrictions on the scope of their work or access to required information.
• The Committee shall review annually the internal audit budget, competency and adequacy of staffing levels and audit plan.
• The Committee shall review quarterly material findings of internal audit reviews, management's response and status of corrective actions.
• The Committee shall review the appointment, replacement, performance, and recommended compensation of the Internal Auditor.

Overseeing the Independence and Performance of the Company's Independent Auditors

• The Committee shall obtain and review a report from the independent auditors at least annually regarding (a) the independent auditors' internal quality control procedures, (b) any material issues raised in the most recent internal quality review or peer review and any inquiries by governmental or professional authorities regarding the firm's independent audits of other clients, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditors and the Company, taking into account the opinions of management and the Company's internal auditors.
• The Committee must pre-approve any non-audit services to be rendered by the independent auditors in advance of engaging the independent auditors to render such services to ensure services are not prohibited by laws and regulations promulgated by the SEC. The Chair of the Committee may represent the entire Committee provided that any pre-approval granted is reviewed by the Committee at the next scheduled meeting.
• The Committee shall receive written disclosures and the letter from the independent auditors required by the Independence Standards Board, No. 1, "Independence Discussions with Audit Committees," and shall discuss with the independent auditors their independence.
• The Committee shall oversee the establishment of written hiring policies for current and former employees of the independent auditors.
• The Committee shall ensure that the lead audit partner of the independent auditors and the audit partner responsible for reviewing the audit are rotated at least every five years as required by Sarbanes-Oxley Act of 2002.

Monitoring the Company's Compliance with Laws, Regulations and Ethic Programs

• The Committee shall review with management actions taken to monitor compliance with any code or standards of conduct for the Company established by the Board.
• The Committee shall discuss with the Company's legal counsel any legal, tax or regulatory matters, including securities trading practices and any other legal matters that could have a significant, adverse impact on the Company's financial statements.

Providing an Avenue of Communications Among the Independent Auditors, Management and the Board

• The Chair of the Committee shall provide regular reports and review the committee minutes with the Board.