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United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for
the fiscal year ended: December 31, 2007
 Commission File Number 0-14773
 National Bancshares Corporation
 (Exact name of registrant as specified in its charter)
 Ohio
    
    34-1518564(State or other jurisdiction 
of incorporation or organization)
    
    (IRS Employer
Identification No.)
 (330) 682-1010
 Address, including zip code, and telephone number,
including area code, of registrants principal executive offices
 Securities registered pursuant to section 12(b) of the Act none
 Securities registered pursuant to section 12(g) of the Act common stock, without par value
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    Smaller reporting company þ(Do not check if a smaller reporting company)
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   Documents Incorporated by Reference




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Table of Contents
 PagePart IItem 1
    
    Business
    
    
    2Item 1A
    
    Risk Factors
    
    
    14Item 1B
    
    Unresolved Staff Comments
    
    
    16Item 2
    
    Properties
    
    
    17Item 3
    
    Legal Proceedings
    
    
    18Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    18Part IIItem 5
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    19Item 6
    
    Selected Financial Data
    
    
    19Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 8
    
    Financial Statements and Supplementary Data
    
    
    19Item 9
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    19Item 9A
    
    Controls and Procedures
    
    
    19Item 9B
    
    Other Information
    
    
    20Part IIIItem 10
    
    Directors, Executive Officers and Corporate Governance
    
    
    21Item 11
    
    Executive Compensation
    
    
    22Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    22Item 13
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    22Item 14
    
    Principal Accountant Fees and Services
    
    
    22Part IVItem 15
    
    Exhibits and Financial Statement Schedules
    
    
    23Signatures
    
    
    
    
    25EX-3.2EX-10.4EX-13EX-21EX-23EX-31.1EX-31.2EX-32
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Item 1  Business
 Forward-looking Statements
  
    
    the strength of the United States economy in general and the
strength of the local economies in which we conduct our operations;
general economic conditions, either nationally or regionally, may
be less favorable than we expect, resulting in a deterioration in
the credit quality of our loan assets, among other things
    
    the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest-rate policies of the Federal
Reserve Board
    
    inflation, interest rate, market, and monetary fluctuations
    
    the development and acceptance of new products and services of
National Bancshares and its subsidiary and the perceived overall
value of these products and services by users, including the
features, pricing, and quality compared to competitors products
and services
    
    the willingness of users to substitute our products and services
for those of competitors
    
    the impact of changes in financial services laws and regulations
(including laws concerning taxes, banking, securities, and
insurance)
    
    changes in consumer spending and saving habits
  Company Milestones
 1881
    
    First National Bank is chartered under the name Orrville Banking Company1902
    
    the Banks name is changed to Orrville National Bank1933
    
    the Bank is reorganized and renamed once again, the National Bank of Orrville1965
    
    on May 12 the Bank opens its first branch, on West High Street1968
    
    on February 1 the Bank merges with the First National Bank of Dalton, becoming the First
National Bank Orrville-Dalton1969
    
    on November 1 the Bank merges with the Bank of Mt. Eaton Company
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1972
    
    on January 1 the Farmers and Merchants Bank Company of Smithville merges with the Bank, and
changes its name to First National Bank1975
    
    on July 5 the Bank opens its Midway office in Apple Creek1986
    
    National Bancshares Corporation becomes the holding company for First National Bank on June 21989
    
    the Bank enters Medina County with the purchase of its Lodi office on April 141994
    
    on December 16 the Bank establishes its second Medina County office with the purchase of the
Seville branch1999
    
    the Bank opens its Cleveland Road office in the city of Wooster on April 192002
    
    the acquisition of Peoples Financial Corporation and its subsidiary, Peoples Federal Savings
and Loan Association of Massillon, is completed on April 3, adding three more banking offices,
our first offices in Stark County2005
    
    the Bank closes its MarketPlace office in the city of Massillon on May 31 and opens its
Burbank Road office in the city of Wooster on June 302006
    
    First National Bank celebrates its 125year anniversary
 Market Area
 www.odod.state.oh.us/research) lmi.state.oh.us Ohio County Profiles www.odod.state.oh.us/research
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Competition
  www.fdic.gov th th th
  4




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Lending
    
    
    accounts receivable, inventory and working capital loans
    
    renewable operating lines of credit
    
    loans to finance capital equipment
    
    term business loans
    
    short-term notes
    
    selected guaranteed or subsidized loan programs for small businesses
    
    loans to professionals
    
    commercial real estate loans, including agricultural loans secured by farmland
    
    loans for agricultural production and other loans to farmers
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
    
    residential construction loans to borrowers who will occupy the premises upon completion
of construction,
    
    residential construction loans to builders,
    
    commercial construction loans, and
    
    real estate acquisition and development loans.
    Loan Solicitation and Processing
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Income from Lending Activities
 Delinquent Loans
  Investments
 Sources of Funds Deposit Accounts
 Borrowings
 Personnel
 Minority Ownership of a Title Insurance Agency
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Available Information http://www.sec.gov www.fnborrville.com
 Supervision and Regulation
     Regulation of Bank Holding Companies Bank and Bank Holding Company Acquisitions
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
    
    directly or indirectly acquiring ownership or control of any voting shares of another
bank or bank holding company, if after the acquisition the acquiring company would own or
control more than 5% of the shares of the other bank or bank holding company (unless the
acquiring company already owns or controls a majority of the shares),
    
    acquiring all or substantially all of the assets of another bank, or
    
    merging or consolidating with another bank holding company.
   Nonbanking Activities
 Financial Holding Companies
 
    
    financial in nature or incidental to that financial activity, or
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
    
    complementary to a financial activity and that does not pose a substantial risk to the
safety and soundness of depository institutions or the financial system generally.
  
    
    acting as principal, agent, or broker for insurance,
    
    underwriting, dealing in, or making a market in securities, and
    
    providing financial and investment advice.
  Holding Company Capital and Source of Strength
  Federal Deposit Insurance
   10




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Interstate Banking and Branching
 de novo de novo de novo
 Capital Risk-Based Capital Requirements
   11




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Prompt Corrective Action
 Limits on Bank Dividends to the Holding Company
  Transactions with Affiliates
 12




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
    
    limit the extent to which a bank or its subsidiaries may lend to or engage in various
other kinds of transactions with any one affiliate to an amount equal to 10% of the banks
capital and surplus, limiting the aggregate of covered transactions with all affiliates to
20% of capital and surplus,
    
    impose restrictions on investments by a subsidiary bank in the stock or securities of
its holding company,
    
    impose restrictions on the use of a holding companys stock as collateral for loans by
the subsidiary bank, and
    
    require that affiliate transactions be on terms substantially the same or at least as
favorable to the institution or subsidiary as those provided to a non-affiliate.
  Community Reinvestment Act
  Monetary Policy
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Sarbanes-Oxley Act of 2002.
  
 ITEM 1A  RISKS FACTORS
 Success in the banking industry requires disciplined management of lending risks
 Concentration of service area could negatively affect financial performance.
 Changing interest rates have a direct and immediate impact on financial institutions
 First National Bank has significant competition in both attracting and retaining deposits and
in originating loans.
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The banking industry is heavily regulated; the compliance burden to the industry is
considerable; the principal beneficiary of federal and state regulation is the public at large and
depositors, not shareholders
  National Bancshares Corporation common stock is thinly traded. It is therefore susceptible to
wide price swings ®
  
    
    a company must have an audit committee consisting of independent directors,
    
    the audit committee must be responsible for the appointment, compensation,
retention, and oversight of the independent auditor,
    
    the audit committee must establish procedures for the submission of complaints
about accounting, auditing, and internal control issues and for the anonymous
submission of accounting and auditing concerns by employees,
    
    the audit committee must have authority to engage its own advisors, and
    
    the company must ensure that the audit committee has ample funding for payment
of independent auditor compensation, for compensation of advisors, and for other
administrative expenses.
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Government regulation could restrict our ability to pay cash dividends
 We could incur liabilities under federal and state environmental laws if we foreclose on
commercial properties
 Growth through acquisition involves special risks
  Accounting for probable loan losses is a critical accounting policy
 
 Item 1b  Unresolved Staff Comments
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Item 2  Properties
  Net Book ValueLocation
    
    County
    
    (Dollars in Thousands)Main Office:112 West Market Street
    
    Wayne
    
    $
    333Orrville, Ohio 44667Other Offices:12 West Main Street
    
    Wayne
    
    $
    109Dalton, Ohio 446181320 West High Street
    
    Wayne
    
    $
    112Orrville, Ohio 446674934 Kidron Road
    
    Wayne
    
    $
    827Kidron, Ohio 44636153 East Main Street
    
    Wayne
    
    $
    63Smithville, Ohio 4467715974 East Main Street
    
    Wayne
    
    $
    29Mt. Eaton, Ohio 44659U.S. Route 30 at County Road 44
    
    Wayne
    
    $
    907227 Lincoln Way East
Apple Creek, Ohio 446061720 North Main Street
    
    Wayne
    
    $
    60Orrville, Ohio 44667
(cash ATM only)1725 Cleveland Road
    
    Wayne
    
    $
    523Wooster, Ohio 446914192 Burbank Road
    
    Wayne
    
    $
    862Wooster, Ohio 44691
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Net Book ValueLocation
    
    County
    
    (Dollars in Thousands)211 Lincoln Way East
    
    Stark
    
    $
    631Massillon, Ohio 446462312 Lincoln Way N.W.
    
    Stark
    
    $
    374Massillon, Ohio 4464751 Massillon Marketplace Drive S.W.
    
    Stark
    
    $
    1Massillon, Ohio 44646
(cash ATM only)
(leased location)106 Ainsworth Street
    
    Medina
    
    $
    292Lodi, Ohio 44254121 Greenwich Road
    
    Medina
    
    $
    15Seville, Ohio 44667
(leased facility)
  
 Item 3  Legal Proceedings
  
 Item 4  Submission of Matters to a Vote of Security Holders
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Part II
 
 Item 5  Market for Registrants Common Equity, Related Stockholder Matters and issuer
purchases of equity securities
  See
  Issuer Purchase of Equity Securities
  
 Item 6  Selected Financial Data
  
 Item 7  Managements Discussion and Analysis of Financial Condition and Results of
Operations
  
 Item 7A  Quantitative and Qualitative Disclosures About Market Risk
  
 Item 8  Financial Statements and Supplementary Data
  
 Item 9  Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A  Controls and Procedures
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Item 9B  OTHER INFORMATION
  20




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Part III
 
 Item 10  Directors, Executive Officers and Corporate Governance
   Name
    
    Age
    
    PositionDavid C. Vernon
    
    67
    
    
    
    President and Chief Executive Officer of National Bancshares Corporation and First National Bank.
He serves as a director and Vice-Chairman of Central Federal Corporation and its wholly owned
subsidiary CFBank, a federally chartered savings association headquartered in Fairlawn in Summit
County, Ohio. He served as Chairman of Central Federal Corporation and CFBank from January 2003
until January 1, 2006. He also served as Central Federal Corporations and CFBanks Chief
Executive Officer in 2003 and 2004 and as President of both companies from March 2003 to January
2005. Before joining Central Federal and CFBank, he was Chairman, President and Chief Executive
Officer of Founders Capital Corporation in Akron, Ohio from September 2002 to February 2003; a
Strategic Planning Consultant to Westfield Bank in Westfield, Ohio from May 2000 to July 2002; a
Consultant to Champaign National Bank in Urbana, Ohio from July 1999 to April 2002; and a
Consultant to First Place Bank in Warren, Ohio from April 1999 to February 2001. In February 1999,
Mr. Vernon retired as Chairman, President and Chief Executive Officer of Summit Bank, an Akron-area
community bank he founded in January 1991.James R. VanSickle
    
    37
    
    
    
    Senior Vice President and Chief Financial Officer of National Bancshares Corporation
and Senior Vice President and Chief Financial Officer of First
National Bank since June 2007. Mr. VanSickle is the principal
financial and accounting officer. Prior to joining First National
Bank, he worked with Crowe Chizek and Company LLC as and Executive in
the firms Financial Institutions Group. He joined Crowe in 1992 and
was promoted to Executive in 2003.Thomas M. Fast
    
    46
    
    
    
    Senior Vice President and Senior Loan Officer of First National Bank since July
2007. Mr. Fast has worked for Wayne County National Bank, KeyBank and
First Chicago National Bank. He has over 18 years experience in
banking focusing on commercial and real estate lending.Steven L. Riddick
    
    59
    
    
    
    Vice President and Senior Credit Officer of First National Bank since October 2006.
Previously, Mr. Riddick served as Vice President, Commercial Banking
and Branch Manager, Seville Office of First National Bank.Paul G. Kubiak
    
    47
    
    
    
    Vice President of Client Services and Operations for First National Bank since
April 2007. Prior to this, Mr. Kubiak was Vice President of Client Services and a business
development officer for the Bank since March 2004. Prior to joining the Bank, he served as Manager
of Customer Service for Bekaert Contours and Contours, Ltd., a manufacturing firm in Orrville,
Ohio.
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Item 11  Executive Compensation
  
 Item 12  Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  
 Item 13  Certain Relationships, Related Transactions and director independence
  
 Item 14  Principal Accountant Fees and Services
  22




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Part IV
 
 Item 15  Exhibits AND Financial Statement Schedules
   
    
    Report of Independent Registered Public Accounting Firm
    
    Consolidated Balance Sheets at December 31, 2007 and 2006
    
    Consolidated Statements of Income for the Years Ended December 31, 2007, 2006, and 2005
    
    Consolidated Statements of Changes in Shareholders Equity for the Years Ended December 31, 2007, 2006, and 2005
    
    Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006, and 2005
    
    Notes to Consolidated Financial Statements
     Exhibits Required by Item 601 of Regulation S-K
 ExhibitNumber
    
    Description
    
    Location3.1
    
    Amended Articles of Incorporation
    
    Incorporated by reference to the identically numbered
exhibit to the Annual Report on Form 10-K for the fiscal
year ended December 31, 2003, filed on March 26, 20043.2
    
    Amended By-Laws
    
    Filed herewith10.1*
    
    Directors Defined Benefit Plan Agreement
    
    Incorporated by reference to the identically numbered
exhibit to the Annual Report on Form 10-K for the fiscal
year ended December 31, 2000, filed on March 29, 200110.2*
    
    Employment Agreement entered into by
David C. Vernon and National Bancshares
and First National Bank
    
    Incorporated by reference on Form 8-K dated November 27, 2007.10.3*
    
    Employment Agreement entered into by
James R. VanSickle and National Bancshares
and First National Bank
    
    Incorporated by reference on Form 8-K dated June 19, 2007.10.4*
    
    Employment Agreement entered into by
Thomas M. Fast and National Bancshares
and First National Bank
    
    Filed herewith
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Exhibits Required by Item 601 of Regulation S-K (continued)
 ExhibitNumber
    
    Description
    
    Location13
    
    2007 Annual Report to Security Holders
    
    Filed herewith14.1
    
    Code of Business Conduct and Ethics
    
    Incorporated by reference to the identically numbered
exhibit to the Annual Report Form 10-K for the fiscal
year ended December 31, 2006 filed on March 24, 200714.2
    
    Code of Ethical Conduct for the Finance Officers
And Finance Department Personnel
    
    Incorporated by reference to the identically numbered
exhibit to the Annual Report Form 10-K for the fiscal
year ended December 31, 2006 filed on March 24, 200721
    
    Subsidiaries
    
    Filed herewith23
    
    Consent of Crowe Chizek and Company LLC
    
    Filed herewith31.1
    
    Certification of Chief Executive Officer under
Sarbanes-Oxley Act Section 302
    
    Filed herewith31.2
    
    Certification of Chief Financial Officer under
Sarbanes-Oxley Act Section 302
    
    Filed herewith32
    
    Certification pursuant to 18 U.S.C. Section 1350,
as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    Filed herewith
 
 *
    
    Management contract or compensatory plan or arrangement 24




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Signatures
  National Bancshares CorporationBy:
    /s/ David C. VernonDavid C. VernonPresident and Chief Executive OfficerDate:
    March 28, 2008  /s/ David C. Vernon
    
    March 28, 2008David C. VernonPresident, Chief Executive Officer, and Director/s/ James R. VanSickle
    
    March 28, 2008James R. VanSickle, Sr. Vice President & Chief Financial Officer(Principal Accounting and Financial Officer)/s/ Sara E Steinbrenner Balzarini
    
    March 28, 2008Sara E. Steinbrenner Balzarini, Director/s/ John Cook, CPA, Ph. D.
    
    March 28, 2008John Cook, CPA, Ph. D., Director/s/ Bobbi E. Douglas
    
    March 28, 2008Bobbi E. Douglas, Director/s/ John W. Kropf
    
    March 28, 2008John W. Kropf, Director/s/ John L. Muhlbach, Jr
    
    March 28, 2008John L. Muhlbach, Jr., Director/s/ Victor B. Schantz
    
    March 28, 2008Victor B. Schantz, Director/s/ Stephen W. Schmid
    
    March 28, 2008Stephen W. Schmid, Director/s/ Howard J. Wenger
    
    March 28, 2008Howard J. Wenger, Director/s/ Albert W. Yeagley
    
    March 28, 2008Albert W. Yeagley, Director 25