FARMERS & MERCHANTS BANCORP 10-Q

Item 1. Financial Statements (Unaudited) FARMERS & MERCHANTS BANCORP CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share amounts) September 30, 2025 December 31, 2024 ASSETS Cash and due from banks $ 70,447 $ 71,058 Interest bearing deposits with banks 102,120 141,505 Total cash and cash equivalents 172,567 212,563 Securities available-for-sale, amortized cost $ 879,082 and $ 490,992 , respectively 870,161 464,414 Securities held-to-maturity, fair value $ 604,131 and $ 610,953 , respectively 734,628 769,443 Allowance for credit losses - securities held-to-maturity ( 450 ) ( 450 ) Total investment securities 1,604,339 1,233,407 Non-marketable securities 15,549 15,549 Loans and leases held for investment, net of unearned income 3,608,346 3,678,388 Allowance for credit losses - loans and leases ( 75,963 ) ( 75,283 ) Loans and leases held for investment, net 3,532,383 3,603,105 Bank-owned life insurance 75,954 74,085 Premises and equipment, net 54,369 51,367 Deferred income tax assets and income taxes receivable 28,224 36,729 Accrued interest receivable 31,505 30,152 Goodwill 11,183 11,183 Other intangibles 1,295 1,687 Other real estate owned 873 873 Other assets 101,626 99,496 Total Assets $ 5,629,867 $ 5,370,196 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits: Non-interest bearing $ 1,581,097 $ 1,518,267 Interest bearing: Demand 797,507 882,123 Savings and money market 1,757,896 1,583,202 Certificates of deposit 748,514 715,547 Total interest bearing 3,303,917 3,180,872 Total deposits 4,885,014 4,699,139 Subordinated debentures 10,310 10,310 Interest payable and other liabilities 89,291 87,675 Total Liabilities 4,984,615 4,797,124 COMMITMENTS AND CONTINGENCIES (Note 12) SHAREHOLDERS’ EQUITY Preferred shares, no par value, 1,000,000 shares authorized and none issued or outstanding - - Common shares, $ 0.01 par value, 7,500,000 authorized, 726,294 and 699,798 issued and 721,411 and 699,798 outstanding at September 30, 2025 and December 31, 2024, respectively 7 7 Additional paid-in capital 8,201 - Retained earnings 648,916 592,431 Accumulated other comprehensive loss, net of taxes ( 6,942 ) ( 19,366 ) Treasury stock, at cost; 4,883 shares at September 30, 2025 and 0 shares at December 31, 2024 ( 4,930 ) - TOTAL SHAREHOLDERS’ EQUITY 645,252 573,072 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 5,629,867 $ 5,370,196 See accompanying notes to the unaudited consolidated financial statements. 3 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except share and per share amounts) 2025 2024 2025 2024 Interest income Interest and fees on loans and leases $ 55,185 $ 56,698 $ 164,059 $ 168,296 Interest and dividends on investment securities 12,343 8,044 33,841 22,171 Interest on deposits with others 3,064 3,893 9,891 14,640 Total interest income 70,592 68,635 207,791 205,107 Interest expense Deposits 14,981 16,421 44,785 48,972 Borrowed funds - - - 986 Subordinated debentures 194 221 580 662 Total interest expense 15,175 16,642 45,365 50,620 Net interest income 55,417 51,993 162,426 154,487 Provision for credit losses 700 - 2,400 - Net interest income after provision for credit losses 54,717 51,993 160,026 154,487 Non-interest income Card processing 1,780 1,777 5,236 5,170 Service charges on deposit accounts 779 794 2,295 2,291 Increase in cash surrender value of BOLI 639 606 1,869 1,803 Net gain on sale of securities available-for-sale - 743 - 743 Net gain on deferred compensation benefits 1,200 1,277 2,797 2,849 Other 2,469 1,083 5,210 3,266 Total non-interest income 6,867 6,280 17,407 16,122 Non-interest expense Salaries and employee benefits 18,912 19,049 54,488 54,551 Data processing 1,764 1,513 5,186 4,503 Occupancy 1,259 1,318 3,854 3,793 Deposit insurance 719 705 2,217 2,119 Professional services 786 968 2,402 2,130 Marketing 478 504 1,397 1,546 Net gain on deferred compensation benefits 1,200 1,277 2,797 2,849 Other 3,830 2,421 8,767 7,207 Total non-interest expense 28,948 27,755 81,108 78,698 INCOME BEFORE INCOME TAXES 32,636 30,518 96,325 91,911 Income tax expense 8,918 8,397 26,543 25,300 NET INCOME $ 23,718 $ 22,121 $ 69,782 $ 66,611 Earnings per common share: Basic $ 34.24 $ 29.96 $ 100.18 $ 89.91 Diluted $ 33.92 $ 29.96 $ 99.67 $ 89.91 Weighted average number of common shares Basic 692,727 738,421 696,572 740,898 Diluted 699,211 738,421 700,128 740,898 See accompanying notes to the unaudited consolidated financial statements. 4 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Net income $ 23,718 $ 22,121 $ 69,782 $ 66,611 Other comprehensive income Unrealized gains on available-for-sale securities 8,722 8,769 17,657 5,074 Reclassification adjustment for gains on available-for-sale securities - ( 743 ) - ( 743 ) Amortization of unrecognized loss on securities transferred to held-to-maturity ( 5 ) ( 17 ) ( 19 ) ( 66 ) Net unrealized gains on securities 8,717 8,009 17,638 4,265 Income tax expense ( 2,577 ) ( 2,368 ) ( 5,214 ) ( 1,261 ) Other comprehensive income, net of tax 6,140 5,641 12,424 3,004 Total comprehensive income $ 29,858 $ 27,762 $ 82,206 $ 69,615 See accompanying notes to the unaudited consolidated financial statements. 5 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) For the three and nine months ended September 30, 2025 and 2024 (Dollars in thousands, except share amounts) Common Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Shares Treasury Stock Total Balance as of June 30, 2025 727,722 $ 7 $ 5,192 $ 628,793 $ ( 13,082 ) ( 2,355 ) $ ( 2,378 ) $ 618,532 Net income - - - 23,718 - - - 23,718 Other comprehensive income, net of tax - - - - 6,140 - - 6,140 Forfeiture of restricted stock awards ( 1,416 ) - - - - - - - Stock based compensation expense - - 3,009 - - - - 3,009 Cash dividends declared ($ 5.00 per share) - - - ( 3,595 ) - - - ( 3,595 ) Repurchase of common stock ( 12 ) - - ( 12 ) - - - ( 12 ) Adjustment common stock excise tax - - - 12 - - - 12 Purchase of treasury stock - - - - - ( 2,528 ) ( 2,552 ) ( 2,552 ) Balance as of September 30, 2025 726,294 $ 7 $ 8,201 $ 648,916 $ ( 6,942 ) ( 4,883 ) $ ( 4,930 ) $ 645,252 Balance as of June 30, 2024 739,308 $ 7 $ 27,931 $ 563,383 $ ( 15,101 ) - $ - $ 576,220 Net income - - - 22,121 - - - 22,121 Other comprehensive income, net of tax - - - - 5,641 - - 5,641 Repurchase of common stock ( 1,313 ) - ( 1,286 ) - - - - ( 1,286 ) Balance as of September 30, 2024 737,995 $ 7 $ 26,645 $ 585,504 $ ( 9,460 ) - $ - $ 602,696 (Dollars in thousands, except share amounts) Common Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Shares Treasury Stock Total Balance as of December 31, 2024 699,798 $ 7 $ - $ 592,431 $ ( 19,366 ) - $ - $ 573,072 Net income - - - 69,782 - - - 69,782 Other comprehensive income, net of tax - - - - 12,424 - - 12,424 Issuance of restricted stock awards 30,818 - - - - - - - Forfeiture of restricted stock awards ( 1,416 ) - - - - - - - Stock based compensation expense - - 8,201 - - - - 8,201 Cash dividends declared ($ 14.30 per share) - - - ( 10,364 ) - - - ( 10,364 ) Repurchase of common stock ( 2,906 ) - - ( 2,933 ) - - - ( 2,933 ) Purchase of treasury stock - - - - - ( 4,883 ) ( 4,930 ) ( 4,930 ) Balance as of September 30, 2025 726,294 $ 7 $ 8,201 $ 648,916 $ ( 6,942 ) ( 4,883 ) $ ( 4,930 ) $ 645,252 Balance as of December 31, 2023 747,971 $ 7 $ 36,852 $ 525,360 $ ( 12,464 ) - $ - $ 549,755 Cumulative change from adoption of ASU 2023-02 - - - 40 - - - 40 Net income - - - 66,611 - - - 66,611 Other comprehensive income, net of tax - - - - 3,004 - - 3,004 Cash dividends declared ($ 8.80 per share) - - - ( 6,507 ) - - - ( 6,507 ) Repurchase of common stock ( 9,976 ) - ( 10,207 ) - - - - ( 10,207 ) Balance as of September 30, 2024 737,995 $ 7 $ 26,645 $ 585,504 $ ( 9,460 ) - $ - $ 602,696 See accompanying notes to the unaudited consolidated financial statements. 6 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, (Dollars in thousands) 2025 2024 Cash flows from operating activities: Net income $ 69,782 $ 66,611 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 2,400 - Depreciation and amortization 2,311 2,191 Net accretion of securities premiums and discounts ( 1,083 ) ( 1,132 ) Stock based compensation expense 8,201 - Increase in cash surrender value of BOLI ( 1,869 ) ( 1,803 ) Decrease in deferred income taxes, net 4,010 5,829 Gain on sale of securities available-for-sale - ( 743 ) Net changes in: Other assets ( 3,152 ) ( 3,146 ) Other liabilities 9,902 22,728 Net cash provided by operating activities 90,502 90,535 Cash flows from investing activities: Net decrease (increase) in loans and leases held for investment 68,455 ( 49,540 ) Purchase of available-for-sale securities ( 426,729 ) ( 300,456 ) Purchase of held-to-maturity securities ( 8,847 ) ( 3,043 ) Proceeds from sales, maturities, calls and pay downs of available-for-sale securities 39,542 87,693 Proceeds from maturities, calls and pay downs of held-to-maturity securities 43,807 40,247 Purchase of premises and equipment ( 5,348 ) ( 1,413 ) Purchase of other investments ( 9,086 ) ( 14,486 ) Redemption of other investments - 5,917 Proceeds from bank-owned life insurance - 3,281 Proceeds from sale of assets 60 - Net cash used in investing activities ( 298,146 ) ( 231,800 ) Cash flows from financing activities: Net increase in deposits 185,875 40,587 Cash dividends paid ( 10,364 ) ( 6,507 ) Net cash used in share repurchase program ( 2,933 ) ( 10,207 ) Purchase of treasury stock ( 4,930 ) - Net cash provided by financing activities 167,648 23,873 Net change in cash and cash equivalents ( 39,996 ) ( 117,392 ) Cash and cash equivalents, beginning of period 212,563 410,642 Cash and cash equivalents, end of period $ 172,567 $ 293,250 Supplemental disclosures of cash flow information: Cash paid for interest $ 47,495 $ 12,631 Income taxes paid $ 10,002 $ 4,241 Supplemental disclosures of non-cash transactions: Net change in unrealized losses on securities available-for-sale $ ( 17,657 ) $ ( 4,331 ) See accompanying notes to the unaudited consolidated financial statements. 7 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bancorp (“FMCB” or “Bancorp”), a bank holding company incorporated in the State of Delaware, and its wholly owned subsidiary, Farmers & Merchants Bank of Central California (“F&M Bank” or the “Bank”) (collectively, the “Company”). These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. All significant intercompany transactions and balances have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are significant to an understanding of Bank’s financial statements. These policies relate to: (i) the determination of the provision and allowance for credit losses; (ii) the valuation of financial assets and liabilities recorded at fair value; (iii) the valuation of intangibles, such as goodwill and core deposit intangibles (“CDI”); (iv) the valuation of other real estate owned (“OREO”); and (v) the valuation or recognition of deferred tax assets and liabilities. These policies and judgments, estimates and assumptions are described in greater detail in subsequent notes to the Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates, in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 14, 2025 (“2024 Form 10-K”) and Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates included in this Quarterly Report on Form 10-Q. The information included in this Form 10-Q should be read in conjunction with our 2024 Form 10-K. Interim results are not necessarily indicative of results for a full year or any other interim period. Summary of Significant Accounting Policies Our accounting policies are described in Note 1 – Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our 2024 Form 10-K. As of September 30, 2025, there were no significant changes to accounting policies from those disclosed in our audited consolidated financial statements included in our 2024 Form 10-K. Use of estimates — The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. 8 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies—Continued Recently Adopted Accounting Standards — The Accounting Standards Codification (“ASC”) is the FASB officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Periodically, the FASB will issue Accounting Standard Updates (“ASU”) to its ASC. Rules and interpretive releases of the SEC under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. In December 2023, the FASB issued ASU No. 2023-09 , “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires public business entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. On January 1, 2025, the Company adopted this standard with no material impact on the Company’s consolidated financial statements, and the new income tax disclosures will be required beginning with our 2025 Form 10-K. Accounting Standards Pending Adoption — The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations. In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses” (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures. In March 2025, the FASB issued ASU No. 2025-02, “ Liabilities (Topic 405)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 ” (“ASU 2025-02”), which communicates changes to the FASB codification, including changes to non-authoritative SEC content. The update affects SEC registrants, makes amendments to the GAAP taxonomy and is effective upon issuance. Management has evaluated the impact of the adoption of this standard and determined there would be no material impact to the Company’s consolidated financial position or results of operations. In July 2025, the FASB issued ASU No. 2025-05, “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ” (“ASU 2025-05”). This ASU provides amendments that provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments are effective in fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years. The Company is evaluating adoption timing and the impact ASU 2025-05 will have on its financial statements and, at this time, does not anticipate it will have a material impact on its consolidated financial statements. 9 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 2—Investment Securities The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows: Amortized Gross Unrealized (Dollars in thousands) Cost Gains Losses Fair Value As of September 30, 2025 U.S. Government-sponsored securities $ 2,144 $ 1 $ 15 $ 2,130 Mortgage-backed securities (1) 758,047 6,599 18,183 746,463 Commercial mortgage-backed obligations (1) 1,231 23 - 1,254 Collateralized mortgage obligations (1) 21,356 - 479 20,877 Municipal securities 66,465 3,021 - 69,486 Corporate securities 29,529 148 36 29,641 Other 310 - - 310 Total available-for-sale securities $ 879,082 $ 9,792 $ 18,713 $ 870,161 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. Amortized Gross Unrealized (Dollars in thousands) Cost Gains Losses Fair Value As of December 31, 2024 U.S. Government-sponsored securities $ 2,657 $ 4 $ 17 $ 2,644 Mortgage-backed securities (1) 466,302 464 26,908 439,858 Commercial mortgage-backed obligations (1) 1,228 - 16 1,212 Collateralized mortgage obligations (1) 5,653 - 156 5,497 Corporate securities 14,800 56 - 14,856 Other 352 - 5 347 Total available-for-sale securities $ 490,992 $ 524 $ 27,102 $ 464,414 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. The book values, estimated fair values and unrecognized gains and losses of investments classified as held-to-maturity are as follows: Amortized Gross Unrecognized Allowance for Credit (Dollars in thousands) Cost Gains Losses Fair Value Losses As of September 30, 2025 Mortgage-backed securities (1) $ 598,870 $ 57 $ 119,781 $ 479,146 $ - Collateralized mortgage obligations (1) 63,635 - 10,634 53,001 - Municipal securities 72,123 1,071 1,210 71,984 450 Total held-to-maturity securities $ 734,628 $ 1,128 $ 131,625 $ 604,131 $ 450 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. Amortized Gross Unrecognized Allowance for Credit (Dollars in thousands) Cost Gains Losses Fair Value Losses As of December 31, 2024 Mortgage-backed securities (1) $ 626,427 $ - $ 143,544 $ 482,883 $ - Collateralized mortgage obligations (1) 68,377 - 13,876 54,501 - Municipal securities 74,639 46 1,116 73,569 450 Total held-to-maturity securities $ 769,443 $ 46 $ 158,536 $ 610,953 $ 450 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 10 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 2—Investment Securities—Continued The allowance for credit losses on held-to-maturity securities is a contra-asset valuation account that is deducted from the amortized cost basis of held-to-maturity securities to present the net amount expected to be collected. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts and (v) whether or not such securities are guaranteed or pre-refunded by the issuers. Fair values are based on quoted market prices or dealer quotes. If a quoted market price or dealer quote is not available, fair value is estimated using quoted market prices for similar securities. The following tables show the gross unrealized losses for available-for-sale securities, for which an allowance for credit losses has not been recorded, that have been in an unrealized loss position for less than 12 months or 12 months or more: September 30, 2025 Less Than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-sale securities U.S. Government-sponsored securities $ 798 $ 4 $ 686 $ 11 $ 1,484 $ 15 Mortgage-backed securities (1) 97,156 176 87,979 18,007 185,135 18,183 Collateralized mortgage obligations (1) 15,365 340 5,512 139 20,877 479 Corporate securities 4,684 36 - - 4,684 36 Total available-for-sale securities $ 118,003 $ 556 $ 94,177 $ 18,157 $ 212,180 $ 18,713 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. December 31, 2024 Less Than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available-for-sale securities U.S. Government-sponsored securities $ 600 $ 1 $ 888 $ 16 $ 1,488 $ 17 Mortgage-backed securities (1) 324,202 5,772 67,319 21,136 391,521 26,908 Commerical mortgage-backed securities (1) 1,212 16 - - 1,212 16 Collateralized mortgage obligations (1) 5,043 147 454 9 5,497 156 Corporate securities 347 5 - - 347 5 Total available-for-sale securities $ 331,404 $ 5,941 $ 68,661 $ 21,161 $ 400,065 $ 27,102 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 11 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 2—Investment Securities—Continued As of September 30, 2025, the Company held 320 available-for-sale securities of which 24 securities were in an unrealized loss position for less than twelve months and 109 securities were in an unrealized loss position for twelve months or more without an allowance for credit losses. Because the decline in fair value is attributable to changes in interest rates and not credit quality and because the Company does not have the intent to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery at maturity, it has been determined that there is no expected credit loss on these securities. Management evaluates the available-for-sale securities in an unrealized loss position, relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations. The following tables present the activity in the allowance for credit losses for held-to-maturity securities by major type: September 30, 2025 (Dollars in thousands) Municipal securities Mortgage-backed securities Collateralized mortgage obligations Total Allowance for credit losses - securities Beginning balance $ 450 $ - $ - $ 450 Provision for credit losses - - - - Ending balance $ 450 $ - $ - $ 450 December 31, 2024 (Dollars in thousands) Municipal securities Mortgage-backed securities Collateralized mortgage obligations Total Allowance for credit losses - securities Beginning balance $ 450 $ - $ - $ 450 Provision for credit losses - - - - Ending balance $ 450 $ - $ - $ 450 The amortized cost and estimated fair values of investment securities at September 30, 2025 by contractual final maturity are shown in the following table: Available-for-Sale Held-to-Maturity (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Securities maturing in: One year or less $ 5,402 $ 5,402 $ 1,502 $ 1,491 After one year through five years 26,180 26,272 22,886 22,709 After five years through ten years 21,996 22,886 20,324 19,292 After ten years 825,504 815,601 689,916 560,639 Total $ 879,082 $ 870,161 $ 734,628 $ 604,131 Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur. Expected maturities of mortgage-backed and CMO securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. 12 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 2—Investment Securities—Continued The Company monitors the credit quality of those held-to-maturity securities not issued by the U.S. government or one of its agencies or government sponsored entities, through the use of credit ratings. Credit ratings are reviewed and updated quarterly. Nonrated municipal investments consist primarily of bonds issued by political subdivisions such as housing authorities and reclamation districts. Nonrated municipal investments are monitored through financial covenants and review of repayment history. As of September 30, 2025, there were no past due principal or interest payments associated with held-to-maturity municipal securities. There were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10 % of shareholders’ equity. The following tables summarize the amortized cost of held-to-maturity municipal securities by credit rating as of the dates indicated : Held-to-Maturity Amortized Cost (Dollars in thousands) AAA/AA/A BBB/BB/B Not Rated Total September 30, 2025 Municipal securities $ 18,590 $ 933 $ 52,600 $ 72,123 Total $ 18,590 $ 933 $ 52,600 $ 72,123 Held-to-Maturity Amortized Cost (Dollars in thousands) AAA/AA/A BBB/BB/B Not Rated Total December 31, 2024 Municipal securities $ 19,022 $ 403 $ 55,214 $ 74,639 Total $ 19,022 $ 403 $ 55,214 $ 74,639 Proceeds from sales and calls of investment securities were as follows: (Dollars in thousands) Gross Proceeds Gross Gains Gross Losses Nine months ended September 30, 2025 $ 925 $ - $ - Nine months ended September 30, 2024 $ 70,251 $ 839 $ 96 Pledged Securities At September 30, 2025, investment securities carried at $ 688.4 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $ 712.5 million at December 31, 2024. 13 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases Loans and leases as of the dates indicated consisted of the following: (Dollars in thousands) September 30, 2025 December 31, 2024 Loans and leases held for investment, net Real estate: Commercial $ 1,425,598 $ 1,360,841 Agricultural 710,789 751,026 Residential and home equity 404,635 404,399 Construction 170,681 194,903 Total real estate 2,711,703 2,711,169 Commercial & industrial 488,440 504,403 Agricultural 251,958 289,847 Commercial leases 165,754 179,718 Consumer and other 4,727 5,084 Total gross loans and leases 3,622,582 3,690,221 Unearned income ( 14,236 ) ( 11,833 ) Total net loans and leases 3,608,346 3,678,388 Allowance for credit losses ( 75,963 ) ( 75,283 ) Total loans and leases held for investment, net $ 3,532,383 $ 3,603,105 At September 30, 2025, the portion of loans that were approved for pledging as collateral on borrowing lines with the FHLB and the Federal Reserve Bank (“FRB”) were $ 1.2 billion and $ 1.4 billion, respectively. The borrowing capacity on these loans was $ 805.9 million from FHLB and $ 1.1 billion from the FRB at September 30, 2025. The following tables show an aging analysis of the loan and lease portfolio, net of unearned income, by the time past due for the periods indicated: September 30, 2025 (Dollars in thousands) 30-89 Days Past Due 90+ Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Non-accrual with no ACL Loans and leases held for investment, net Real estate: Commercial $ 7,249 $ - $ 955 $ 8,204 $ 1,409,788 $ 1,417,992 $ 955 Agricultural - - - - 710,789 710,789 - Residential and home equity - 134 - 134 404,501 404,635 - Construction - - - - 170,681 170,681 - Total real estate 7,249 134 955 8,338 2,695,759 2,704,097 955 Commercial & industrial - - - - 488,440 488,440 - Agricultural 16 - - 16 251,942 251,958 - Commercial leases 1,404 - - 1,404 157,720 159,124 - Consumer and other 8 - - 8 4,719 4,727 - Total loans and leases, net $ 8,677 $ 134 $ 955 $ 9,766 $ 3,598,580 $ 3,608,346 $ 955 14 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2024 (Dollars in thousands) 30-89 Days Past Due 90+ Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Non-accrual with no ACL Loans and leases held for investment, net Real estate: Commercial $ - $ - $ 170 $ 170 $ 1,353,101 $ 1,353,271 $ 170 Agricultural - - - - 751,026 751,026 - Residential and home equity - - - - 404,399 404,399 - Construction - - - - 194,903 194,903 - Total real estate - - 170 170 2,703,429 2,703,599 170 Commercial & industrial 33 - 759 792 503,611 504,403 - Agricultural 36 - - 36 289,811 289,847 - Commercial leases - - - - 175,455 175,455 - Consumer and other 5 - - 5 5,079 5,084 - Total loans and leases, net $ 74 $ - $ 929 $ 1,003 $ 3,677,385 $ 3,678,388 $ 170 When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. The Company’s modifications of loans to borrowers experiencing financial difficulty are generally in the form of term extensions, repayment plans, payment deferrals, forbearance agreements, interest rate reductions, forgiveness of interest and/or fees, or any combination thereof. Commercial loans modified to borrowers experiencing financial difficulty are primarily loans that are substandard or non-accrual, where the maturity date was extended and/or the modified interest rate and payment terms are not commensurate with the current market. Modifications on personal real estate loans are primarily those placed on forbearance plans, repayment plans, or deferral plans where monthly payments are suspended for a period of time or past due amounts are paid off over a certain period of time in the future or set up as a balloon payment at maturity. Modifications to certain credit card and other small consumer loans are often modified under debt counseling programs that can reduce the contractual rate or, in certain instances, forgive certain fees and interest charges. Other consumer loans modified to borrowers experiencing financial difficulty consist of various other workout arrangements with consumer customers. 15 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued The following tables present the amortized cost of loans that were both experiencing financial difficulty and modified, by portfolio segment and type of modification, during the periods presented. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each portfolio segment of financing receivable is also presented below: Three Months Ended September 30, 2025 Amortized cost associated with the following modification types: (Dollars in thousands) Interest rate reduction Maturity or term extension Principal forgiveness Payment deferral Multiple modification types 1 Total 2 Percentage of total loan segment Loans and leases held for investment, net Real estate: Commercial $ - $ - $ - $ - $ - $ - 0.00 % Agricultural - - - - - - 0.00 % Residential and home equity - 56 - - - 56 0.01 % Construction - - - - - - 0.00 % Total real estate - 56 - - - 56 0.00 % Commercial & industrial - 1,973 - - - 1,973 0.40 % Agricultural - - - - - - 0.00 % Commercial leases - - - - - - 0.00 % Consumer and other - - - - - - 0.00 % Total $ - $ 2,029 $ - $ - $ - $ 2,029 0.06 % 1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. 2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 0 million during the three months ended September 30, 2025. During the three months ended September 30, 2025, the Company modified one residential first mortgage loan with a 10 -year maturity extension and re-amortization and one commercial loan with a maturity extension of 5 months. Nine Months Ended September 30, 2025 Amortized cost associated with the following modification types: (Dollars in thousands) Interest rate reduction Maturity or term extension Principal forgiveness Payment deferral Multiple modification types 1 Total 2 Percentage of total loan segment Loans and leases held for investment, net Real estate: Commercial $ - $ - $ - $ - $ - $ - 0.00 % Agricultural - 983 - 1,656 - 2,639 0.37 % Residential and home equity - 89 - - - 89 0.02 % Construction - - - - - - 0.00 % Total real estate - 1,072 - 1,656 - 2,728 0.10 % Commercial & industrial - 1,973 - - - 1,973 0.40 % Agricultural - 43 - - - 43 0.02 % Commercial leases - - - - - - 0.00 % Consumer and other - - - - - - 0.00 % Total $ - $ 3,088 $ - $ 1,656 $ - $ 4,744 0.13 % 1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. 2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 0 million during the nine months ended September 30, 2025. 16 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued During the nine months ended September 30, 2025, the Company modified four agricultural real estate loans and one agricultural production loan, all related to the same agricultural borrower. Two of the loans had the contractual term extended by six months and three loans had principal and interest deferrals of six months . The Company also modified one home equity and one residential first mortgage loan with 10 -year maturity extensions and re-amortizations and one commercial loan with a maturity extension of 5 months. The Company did not enter into any loan modifications with borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts. A payment default is defined as a loan having a payment past due 90 days or more after a modification took place. There was one loan modified within the last twelve months for $ 176,000 that had a payment default and was charged off during the nine months ended September 30, 2025 and none during the nine months ended September 30, 2024. There were no loans modified to borrowers with financial difficulty that had a payment default subsequent to modification during the three and nine months end September 30, 2025 and 2024. The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL; therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification. The Company assigns a risk rating to all loans and leases and periodically performs detailed reviews of all such loans and leases over a certain threshold to identify credit risks and assess overall collectability. For smaller balance loans and leases, such as consumer and residential real estate, a credit grade is established at inception, and then updated only when the loan or lease becomes contractually delinquent or when the borrower requests a modification. For larger balance loans and leases, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans and leases. These credit quality indicators are used to assign a risk rating to each individual loan or lease. These risk ratings can be grouped into five major categories, defined as follows: Pass — A pass loan or lease is a strong credit with no existing or known potential weaknesses deserving of management’s close attention. This category also includes “Watch” loans, which is a loan with an emerging weakness in either the individual credit or industry that requires additional attention. A credit may also be classified Watch if cash flows have not yet stabilized, such as in the case of a development project. Special mention — A special mention loan or lease has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date. Special mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard — A substandard loan or lease is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans or leases classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. 17 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued Well-defined weaknesses include a project’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project’s failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful — Loans or leases classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, highly questionable or improbable. Loss — Loans or leases classified as loss are considered uncollectible. Once a loan or lease becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Company will estimate its probable loss and immediately charge-off some or all of the balance. The following tables present outstanding loan and lease balances held for investment net of unearned income by segment, credit risk rating categories, vintage year by segment of financing receivable, and current period gross charge-offs by year of origination as follows: September 30, 2025 Term Loans and Leases Amortized Cost Basis by Origination Year (Dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Real estate: Commercial Pass $ 142,589 $ 39,281 $ 115,585 $ 157,726 $ 195,827 $ 373,009 $ 256,616 $ 126,059 $ 1,406,692 Special mention 225 - - - 7,248 - 2,872 - 10,345 Substandard - - - 955 - - - - 955 Total Commercial $ 142,814 $ 39,281 $ 115,585 $ 158,681 $ 203,075 $ 373,009 $ 259,488 $ 126,059 $ 1,417,992 Commercial Current-period gross charge-offs $ - $ - $ - $ 175 $ - $ - $ - $ - $ 175 Agricultural Pass $ 31,645 $ 24,140 $ 36,128 $ 63,037 $ 39,299 $ 180,437 $ 275,808 $ 48,931 $ 699,425 Special mention 3,156 - - - - 3,100 5,108 - 11,364 Substandard - - - - - - - - - Total Agricultural $ 34,801 $ 24,140 $ 36,128 $ 63,037 $ 39,299 $ 183,537 $ 280,916 $ 48,931 $ 710,789 Agricultural Current-period gross charge-offs $ - $ - $ 180 $ 939 $ - $ - $ - $ - $ 1,119 Residential and home equity Pass $ 27,780 $ 30,047 $ 33,424 $ 51,862 $ 78,030 $ 132,843 $ 49,851 $ 355 $ 404,192 Special mention - - - - - 51 - - 51 Substandard - - - - - 56 336 - 392 Total Residential and home equity $ 27,780 $ 30,047 $ 33,424 $ 51,862 $ 78,030 $ 132,950 $ 50,187 $ 355 $ 404,635 Residential and home equity Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction Pass $ - $ 2,700 $ - $ 500 $ - $ 1,374 $ 150,218 $ 15,889 $ 170,681 Special mention - - - - - - - - - Substandard - - - - - - - - - Total construction $ - $ 2,700 $ - $ 500 $ - $ 1,374 $ 150,218 $ 15,889 $ 170,681 Construction Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Real estate $ 205,395 $ 96,168 $ 185,137 $ 274,080 $ 320,404 $ 690,870 $ 740,809 $ 191,234 $ 2,704,097 Commercial & industrial Pass $ 19,562 $ 22,263 $ 32,421 $ 17,112 $ 14,010 $ 6,420 $ 340,648 $ 31,389 $ 483,825 Special mention - - - 47 - - 203 4,348 4,598 Substandard - - - - 17 - - - 17 Total Commercial & industrial $ 19,562 $ 22,263 $ 32,421 $ 17,159 $ 14,027 $ 6,420 $ 340,851 $ 35,737 $ 488,440 Commercial & industrial Current-period gross charge-offs $ - $ - $ 69 $ 98 $ 53 $ 12 $ - $ - $ 232 18 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued September 30, 2025 Term Loans and Leases Amortized Cost Basis by Origination Year (Dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Agricultural Pass $ 192 $ 3,199 $ 2,431 $ 2,232 $ 1,133 $ 2,414 $ 232,975 $ 7,290 $ 251,866 Special mention - - - 33 - - - 43 76 Substandard - - - - - - 16 - 16 Total Agricultural $ 192 $ 3,199 $ 2,431 $ 2,265 $ 1,133 $ 2,414 $ 232,991 $ 7,333 $ 251,958 Agricultural Current-period gross charge-offs $ - $ - $ - $ 200 $ 34 $ - $ - $ - $ 234 Commercial leases Pass $ 7,614 $ 30,148 $ 69,867 $ 22,649 $ 6,297 $ 22,549 $ - $ - $ 159,124 Special mention - - - - - - - - - Substandard - - - - - - - - - Total Commercial leases $ 7,614 $ 30,148 $ 69,867 $ 22,649 $ 6,297 $ 22,549 $ - $ - $ 159,124 Commercial leases Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer and other Pass $ 1,076 $ 561 $ 694 $ 295 $ 33 $ 1,115 $ 767 $ - $ 4,541 Special mention - - - - - - - - - Substandard 174 - - - - 12 - - 186 Total Consumer and other $ 1,250 $ 561 $ 694 $ 295 $ 33 $ 1,127 $ 767 $ - $ 4,727 Consumer and other Current-period gross charge-offs $ 31 $ 3 $ - $ - $ - $ 10 $ - $ - $ 44 Total net loans and leases Pass $ 230,458 $ 152,339 $ 290,550 $ 315,413 $ 334,629 $ 720,161 $ 1,306,883 $ 229,913 $ 3,580,346 Special mention 3,381 - - 80 7,248 3,151 8,183 4,391 26,434 Substandard 174 - - 955 17 68 352 - 1,566 Total net loans and leases $ 234,013 $ 152,339 $ 290,550 $ 316,448 $ 341,894 $ 723,380 $ 1,315,418 $ 234,304 $ 3,608,346 Total current-period gross charge-offs $ 31 $ 3 $ 249 $ 1,412 $ 87 $ 22 $ - $ - $ 1,804 19 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2024 Term Loans and Leases Amortized Cost Basis by Origination Year (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Real estate: Commercial Pass $ 63,216 $ 117,550 $ 163,875 $ 209,222 $ 134,254 $ 292,326 $ 270,231 $ 99,819 $ 1,350,493 Special mention - - 1,138 - - 170 1,470 - 2,778 Substandard - - - - - - - - - Total Commercial $ 63,216 $ 117,550 $ 165,013 $ 209,222 $ 134,254 $ 292,496 $ 271,701 $ 99,819 $ 1,353,271 Commercial Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Agricultural Pass $ 24,877 $ 36,693 $ 69,209 $ 38,847 $ 46,452 $ 169,301 $ 309,661 $ 32,086 $ 727,126 Special mention - - - - 2,099 5,011 16,790 - 23,900 Substandard - - - - - - - - - Total Agricultural $ 24,877 $ 36,693 $ 69,209 $ 38,847 $ 48,551 $ 174,312 $ 326,451 $ 32,086 $ 751,026 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Residential and home equity Pass $ 33,036 $ 37,378 $ 57,760 $ 82,936 $ 72,304 $ 72,360 $ 47,669 $ 65 $ 403,508 Special mention - - - - - 85 - - 85 Substandard - - - - - 603 203 - 806 Total Residential and home equity $ 33,036 $ 37,378 $ 57,760 $ 82,936 $ 72,304 $ 73,048 $ 47,872 $ 65 $ 404,399 Residential and home equity Current-period gross charge-offs $ - $ 29 $ - $ - $ - $ - $ - $ - $ 29 Construction Pass $ 5,774 $ - $ 1,000 $ - $ - $ 1,375 $ 186,754 $ - $ 194,903 Special mention - - - - - - - - - Substandard - - - - - - - - - Total construction $ 5,774 $ - $ 1,000 $ - $ - $ 1,375 $ 186,754 $ - $ 194,903 Construction Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Real estate $ 126,903 $ 191,621 $ 292,982 $ 331,005 $ 255,109 $ 541,231 $ 832,778 $ 131,970 $ 2,703,599 Commercial & industrial Pass $ 23,235 $ 39,415 $ 20,065 $ 16,715 $ 3,525 $ 6,192 $ 363,947 $ 24,269 $ 497,363 Special mention - 2,280 67 3 - 381 1,017 2,500 6,248 Substandard - 107 - 33 - - 422 230 792 Total Commercial & industrial $ 23,235 $ 41,802 $ 20,132 $ 16,751 $ 3,525 $ 6,573 $ 365,386 $ 26,999 $ 504,403 Commercial & industrial Current-period gross charge-offs $ 231 $ 176 $ - $ 44 $ 100 $ 185 $ - $ - $ 736 20 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2024 Term Loans and Leases Amortized Cost Basis by Origination Year (Dollars in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Agricultural Pass $ 2,831 $ 2,820 $ 2,584 $ 1,708 $ 393 $ 2,471 $ 270,595 $ 6,325 $ 289,727 Special mention - - 41 - - - - 43 84 Substandard - - - - - - 36 - 36 Total Agricultural $ 2,831 $ 2,820 $ 2,625 $ 1,708 $ 393 $ 2,471 $ 270,631 $ 6,368 $ 289,847 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial leases Pass $ 31,977 $ 74,956 $ 21,859 $ 8,314 $ 8,065 $ 26,182 $ - $ - $ 171,353 Special mention - - 4,102 - - - - - 4,102 Substandard - - - - - - - - - Total Commercial leases $ 31,977 $ 74,956 $ 25,961 $ 8,314 $ 8,065 $ 26,182 $ - $ - $ 175,455 Commercial leases Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer and other Pass $ 1,049 $ 1,195 $ 535 $ 71 $ 13 $ 1,349 $ 693 $ - $ 4,905 Special mention - - - - - - - - - Substandard 161 - - - - 18 - - 179 Total Consumer and other $ 1,210 $ 1,195 $ 535 $ 71 $ 13 $ 1,367 $ 693 $ - $ 5,084 Consumer and other Current-period gross charge-offs $ 63 $ 1 $ - $ - $ - $ 29 $ - $ - $ 93 Total net loans and leases Pass $ 185,995 $ 310,007 $ 336,887 $ 357,813 $ 265,006 $ 571,556 $ 1,449,550 $ 162,564 $ 3,639,378 Special mention - 2,280 5,348 3 2,099 5,647 19,277 2,543 37,197 Substandard 161 107 - 33 - 621 661 230 1,813 Total net loans and leases $ 186,156 $ 312,394 $ 342,235 $ 357,849 $ 267,105 $ 577,824 $ 1,469,488 $ 165,337 $ 3,678,388 Total current-period gross charge-offs $ 294 $ 206 $ - $ 44 $ 100 $ 214 $ - $ - $ 858 The Company, in the ordinary course of business, grants loans to the Company’s executive officers and directors, including their families and firms in which they are principal owners. Activity in such loans is summarized as follows: (Dollars in thousands) September 30, 2025 December 31, 2024 Balance at beginning of the period $ 15,626 $ 17,035 New loans or advances during year 495 1,871 Effect of changes in composition of related parties ( 80 ) - Repayments ( 2,624 ) ( 3,280 ) Balance at end of period $ 13,417 $ 15,626 21 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued A loan or lease is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. When management determines that foreclosure is probable, expected credit losses for collateral dependent loans or leases are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. The collateral on the loans and leases is a significant portion of what secures the collateral dependent loans or leases, and significant changes to the fair value of the collateral can impact the allowance for credit losses. The following table presents the amortized cost basis for collateral dependent loans and leases by type as of December 31, 2024: December 31, 2024 (Dollars in thousands) Real Estate Vehicles and Equipment Total Collateral dependent loans and leases Real estate: Commercial $ 170 $ - $ 170 Agricultural - - - Residential and home equity - - - Construction - - - Total real estate 170 - 170 Commercial & industrial - 759 759 Agricultural - - - Commercial leases - - - Consumer and other - - - Total gross loans and leases $ 170 $ 759 $ 929 There were no collateral dependent loans or leases at September 30, 2025. 22 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued Allowance for Credit Losses The allowance for credit losses (“ACL”) is the combination of the allowance for credit losses for loan and lease losses and the allowance for credit losses for unfunded loan commitments. The ACL for unfunded loan commitments is included within “Interest payable and other liabilities” on the consolidated balance sheets. The following tables present a summary of the activity in the ACL for loan and lease losses and ACL for unfunded loan commitments for the periods indicated: For the Three Months Ended September 30, 2025 2024 (Dollars in thousands) ACL for Loans and Leases ACL for Unfunded Commitments Allowance for Credit Losses ACL for Loans and Leases ACL for Unfunded Commitments Allowance for Credit Losses Balance at beginning of period $ 76,169 $ 2,800 $ 78,969 $ 75,032 $ 3,690 $ 78,722 Provision for/(reversal of) credit losses 700 - 700 1,000 ( 1,000 ) - Charge-offs ( 962 ) - ( 962 ) ( 255 ) - ( 255 ) Recoveries 56 - 56 39 - 39 Net (charge-offs)/recoveries ( 906 ) - ( 906 ) ( 216 ) - ( 216 ) Balance at end of period $ 75,963 $ 2,800 $ 78,763 $ 75,816 $ 2,690 $ 78,506 For the Nine Months Ended September 30, 2025 2024 (Dollars in thousands) ACL for Loans and Leases ACL for Unfunded Commitments Allowance for Credit Losses ACL for Loans and Leases ACL for Unfunded Commitments Allowance for Credit Losses Balance at beginning of period $ 75,283 $ 2,690 $ 77,973 $ 74,965 $ 3,690 $ 78,655 Provision for/(reversal of) credit losses 2,290 110 2,400 1,000 ( 1,000 ) - Charge-offs ( 1,804 ) - ( 1,804 ) ( 281 ) - ( 281 ) Recoveries 194 - 194 132 - 132 Net (charge-offs)/recoveries ( 1,610 ) - ( 1,610 ) ( 149 ) - ( 149 ) Balance at end of period $ 75,963 $ 2,800 $ 78,763 $ 75,816 $ 2,690 $ 78,506 Changes in the ACL on loans and leases for the periods indicated are as follows: For the Three Months Ended September 30, 2025 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 20,946 $ 568 $ - $ - $ 21,514 Agricultural 24,469 812 ( 939 ) 5 24,347 Residential and home equity 7,599 ( 126 ) - - 7,473 Construction 2,766 54 - - 2,820 Total real estate 55,780 1,308 ( 939 ) 5 56,154 Commercial & industrial 7,326 30 - 19 7,375 Agricultural 6,982 ( 375 ) - 24 6,631 Commercial leases 5,858 ( 275 ) - - 5,583 Consumer and other 223 12 ( 23 ) 8 220 Total allowance for credit losses $ 76,169 $ 700 $ ( 962 ) $ 56 $ 75,963 23 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued For the Three Months Ended September 30, 2024 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 22,608 $ ( 1,570 ) $ - $ - $ 21,038 Agricultural 16,486 6,932 - - 23,418 Residential and home equity 7,584 ( 593 ) ( 29 ) 5 6,967 Construction 2,165 1,308 - - 3,473 Total real estate 48,843 6,077 ( 29 ) 5 54,896 Commercial & industrial 10,972 ( 2,996 ) ( 200 ) 15 7,791 Agricultural 6,908 8 - 13 6,929 Commercial leases 7,597 ( 1,628 ) - - 5,969 Consumer and other 712 ( 461 ) ( 26 ) 6 231 Total allowance for credit losses $ 75,032 $ 1,000 $ ( 255 ) $ 39 $ 75,816 For the Nine Months Ended September 30, 2025 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 20,382 $ 1,307 $ ( 175 ) $ - $ 21,514 Agricultural 23,615 1,846 ( 1,119 ) 5 24,347 Residential and home equity 7,340 127 - 6 7,473 Construction 3,055 ( 235 ) - - 2,820 Total real estate 54,392 3,045 ( 1,294 ) 11 56,154 Commercial & industrial 7,791 ( 326 ) ( 232 ) 142 7,375 Agricultural 6,725 116 ( 234 ) 24 6,631 Commercial leases 6,153 ( 570 ) - - 5,583 Consumer and other 222 25 ( 44 ) 17 220 Total allowance for credit losses $ 75,283 $ 2,290 $ ( 1,804 ) $ 194 $ 75,963 For the Nine Months Ended September 30, 2024 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 26,093 $ ( 5,055 ) $ - $ - $ 21,038 Agricultural 7,744 15,674 - - 23,418 Residential and home equity 7,770 ( 793 ) ( 29 ) 19 6,967 Construction 4,432 ( 959 ) - - 3,473 Total real estate 46,039 8,867 ( 29 ) 19 54,896 Commercial & industrial 13,380 ( 5,440 ) ( 200 ) 51 7,791 Agricultural 8,872 ( 1,959 ) - 16 6,929 Commercial leases 6,537 ( 568 ) - - 5,969 Consumer and other 137 100 ( 52 ) 46 231 Total allowance for credit losses $ 74,965 $ 1,000 $ ( 281 ) $ 132 $ 75,816 24 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 4—Other Real Estate Owned OREO was $ 873,000 at September 30, 2025 and December 31, 2024, respectively, which includes property no longer utilized for business operations and property acquired through foreclosure proceedings. These properties are carried at fair value less selling costs determined at the date acquired. Losses, if any, arising from properties acquired through foreclosure are charged against the allowance for loan losses at the time of foreclosure. Subsequent declines in value, periodic holding costs, and net gains or losses on disposition are included in other operating expense as incurred. During the second quarter of 2025, the Company recorded an additional $ 326,000 in other real estate owned, which was sold during the third quarter of 2025 at the carrying value. Note 5—Deposits Certificates of deposit greater than and less than or equal to the FDIC insurance limit of $250,000 are summarized as follows: (Dollars in thousands) September 30, 2025 December 31, 2024 Certificates of deposit: Certificates of deposit equal to or less than $250,000 $ 347,963 $ 330,475 Certificates of deposit greater than $250,000 400,551 385,072 Total certificates of deposit $ 748,514 $ 715,547 Scheduled maturities for certificates of deposit are as follows for the years ending December 31: (Dollars in thousands) Amount 2025 $ 303,034 2026 438,277 2027 5,027 2028 1,588 2029 237 2030 351 Total certificates of deposit $ 748,514 Overdrawn deposit balances of $ 166,000 and $ 156,000 were classified as consumer loans at September 30, 2025 and December 31, 2024, respectively. Note 6—Short-term borrowings As of September 30, 2025 and December 31, 2024, committed lines of credit arrangements totaling $ 2.1 billion, were available to the Company from the FHLB, FRB, and unaffiliated banks. The Company is a member of the FHLB of San Francisco and has a committed credit line of $ 807.3 million, which is secured by $ 1.2 billion in various real estate loans and $ 1.4 million in investment securities pledged as collateral. Borrowings generally provide for interest at the then current published rate based on the borrowing term. The overnight borrowing rate was 4.36 % as of September 30, 2025. The Company has $ 1.4 billion in pledged loans with the FRB. As of September 30, 2025, the Company’s overnight borrowing capacity using the primary credit facilities from the Fed account was $ 1.1 billion. The borrowing rate was 4.25 % as of September 30, 2025. There were no outstanding advances on the above borrowing facilities as of September 30, 2025 or December 31, 2024. 25 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value The Company uses fair value measurements to record fair value adjustments to certain financial and non-financial assets and liabilities and to determine fair value disclosures. Various financial instruments such as available-for-sale securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets and liabilities on a non-recurring basis, such as collateral dependent loans and other real estate owned. These non-recurring fair value adjustments typically involve lower of cost or fair value accounting or write-down of individual assets. Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value. For accounting disclosure purposes, a three-level valuation hierarchy of fair value measurements has been established. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds). • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company’s best information and assumptions that a market participant would consider. The carrying amounts and estimated fair values of financial instruments held by the Company are set forth below. Fair value estimates are made at a specific point in time based on relevant market information. They do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for many of the Company’s financial instruments, fair value estimates are based on judgements regarding future expected loss experience, risk characteristics and economic conditions. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Management monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities or total earnings. Securities classified as available-for-sale are reported at fair value on a recurring basis utilizing Level 1, 2 and 3 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. 26 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The Company does not record all loans and leases at fair value on a recurring basis. However, from time to time, a loan or lease is considered collateral dependent and an allowance for credit losses is established. Once a loan or lease is identified as collateral dependent, management measures specific reserves in accordance FASB ASC Topic 326. The fair value of collateral dependent loans or leases is estimated using one of several methods, including collateral value when the loan is collateral dependent, market value of similar debt, enterprise value, and discounted cash flows. Collateral dependent loans and leases not requiring an allowance represent loans and leases for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans and leases. Collateral dependent loans and leases where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. In determining the value of real estate collateral, the Company relies on external and internal appraisals of property values depending on the size and complexity of the real estate collateral. These appraisals may utilize a single valuation approach or a combination of approaches including sales comparison, cost and the income approach. Adjustments are often made in the appraisal process by the appraisers to take into account differences between the comparable sales and income and other available data. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value. The valuation technique used for Level 3 non-recurring collateral dependent loans is primarily the sales comparison approach less estimated selling costs. The Company maintains a list of qualified property appraisers who review appraisal reports for reasonableness. In the case of non-real estate collateral, reliance is placed on a variety of sources, including external estimates of value and judgments based on the experience and expertise of internal specialists. Values of all loan collateral are regularly reviewed by credit administration. Unobservable inputs to these measurements, which include estimates and judgments often used in conjunction with appraisals, are not readily quantifiable. These measurements are classified as Level 3. Other Real Estate Owned (“OREO”) is reported at fair value on a non-recurring basis. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including sales comparison, cost and the income approach. Adjustments are often made in the appraisal process by the appraisers to take into account differences between the comparable sales and income and other available data. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value. The valuation technique used for Level 3 non-recurring OREO is primarily the sales comparison approach less estimated selling costs. 27 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. September 30, 2025 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Fair valued on a recurring basis: Financial assets Available-for-sale securities U.S. Government-sponsored securities $ 2,130 $ - $ 2,130 $ - $ 2,130 Mortgage-backed securities 746,463 - 746,463 - 746,463 Commercial mortgage-backed securities 1,254 - 1,254 - 1,254 Collateralized mortgage obligations 20,877 - 20,877 - 20,877 Municipal securities 69,486 - 69,486 - 69,486 Corporate securities 29,641 - 29,641 - 29,641 Other 310 - 310 - 310 Other equity investments $ 3,050 $ 3,050 $ - $ - $ 3,050 Derivatives not designated as hedging instruments $ 218 $ - $ 218 $ - $ 218 Financial liabilities Derivatives not designated as hedging instruments $ 229 $ - $ 229 $ - $ 229 Fair valued on a non-recurring basis: Other real estate owned $ 873 $ - $ - $ 873 $ 873 December 31, 2024 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Fair valued on a recurring basis: Available-for-sale securities U.S. Government-sponsored securities $ 2,644 $ - $ 2,644 $ - $ 2,644 Mortgage-backed securities 439,858 - 439,858 - 439,858 Commercial mortgage-backed securities 1,212 - 1,212 - 1,212 Collateralized mortgage obligations 5,497 - 5,497 - 5,497 Corporate securities 14,856 - 14,856 - 14,856 Other 347 - 347 - 347 Fair valued on a non-recurring basis: Collateral dependent loans $ 929 $ - $ - $ 929 $ 929 Other real estate owned 873 - - 873 873 28 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The following tables summarize the carrying amount and estimated fair values of the Company’s financial assets and liabilities not carried at fair value, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. September 30, 2025 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Financial assets: Cash and cash equivalents $ 172,567 $ 172,567 $ - $ - $ 172,567 Held-to-maturity securities, net 734,178 - 532,147 71,984 604,131 Non-marketable securities, at cost 15,549 - 15,549 - 15,549 Loans and leases, net 3,532,383 - - 3,526,525 3,526,525 Financial liabilities: Total deposits $ 4,885,014 $ - $ 4,882,391 $ - $ 4,882,391 Subordinated debentures 10,310 - 12,180 - 12,180 December 31, 2024 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Financial assets: Cash and cash equivalents $ 212,563 $ 212,563 $ - $ - $ 212,563 Held-to-maturity securities, net 768,993 - 537,384 73,569 610,953 Non-marketable securities, at cost 15,549 - 15,549 - 15,549 Loans and leases, net 3,603,105 - - 3,523,057 3,523,057 Financial liabilities: Total deposits $ 4,699,139 $ - $ 4,695,388 $ - $ 4,695,388 Subordinated debentures 10,310 - 11,738 - 11,738 Non-marketable securities include FHLB stock, PCBB stock and TIB, National Association stock, which are recorded at cost. Ownership of these stocks is restricted to member banks. Purchases and sales of these securities are at par value with the issuer. The fair value of these investments is equal to the carrying amount. 29 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 8—Earnings Per Share Basic earnings per common share is computed by dividing net earnings allocated to common shareholders by the weighted average number of common shares outstanding during the applicable period. Diluted earnings per common share is computed using the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effects of outstanding restricted stock awards using the treasury stock method. Shares are excluded from the computations of diluted earnings per share when their inclusion has an anti-dilutive effect. For the three and nine months ended September 30, 2025, there were no potential common shares that were anti-dilutive. The following tables present the factors used in the earnings per share computation for the periods indicated: Three Months Ended September 30, (Dollars in thousands, except share and per share amounts) 2025 2024 Net income $ 23,718 $ 22,121 Weighted average common shares outstanding for basic earnings per common share 692,727 738,421 Dilutive potential common shares 6,484 - Shares used in computing diluted earnings per common share 699,211 738,421 Basic earnings per common share $ 34.24 $ 29.96 Diluted earnings per common share $ 33.92 $ 29.96 Nine Months Ended September 30, (Dollars in thousands, except share and per share amounts) 2025 2024 Net income $ 69,782 $ 66,611 Weighted average common shares outstanding for basic earnings per common share 696,572 740,898 Dilutive potential common shares 3,556 - Shares used in computing diluted earnings per common share 700,128 740,898 Basic earnings per common share $ 100.18 $ 89.91 Diluted earnings per common share $ 99.67 $ 89.91 30 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 9—Employee Benefit Plans Executive Retirement Plan The Company, through the Bank, sponsors an Executive Retirement Plan (“ERP”) for certain executive level employees. The ERP is a non-qualified deferred compensation plan and was developed to supplement the Company’s Profit Sharing Plan, which, as a qualified retirement plan, has a ceiling on benefits as set by the Internal Revenue Service. The ERP is comprised of: (1) a Performance Component which makes contributions based upon long-term cumulative profitability and increase in market value of the Company; (2) a Salary Component which makes contributions based upon participant salary levels; and (3) an Equity Component for which contributions are discretionary and subject to Board of Directors approval. The Company maintains a Rabbi Trust to fund, in part, the ERP. The Rabbi Trust is an irrevocable grantor trust to which the Company may contribute assets for the limited purpose of funding a non-qualified deferred compensation plan. The Company may not use the assets of the Rabbi Trust for any purpose other than meeting its obligations under the ERP; however, the assets of the Rabbi Trust remain subject to the claims of its creditors and are included in the consolidated financial statements. The Company contributes cash to the Rabbi Trust from time to time for the sole purpose of funding the ERP. The Rabbi Trust will use any cash the Company contributes to purchase shares of common stock of the Company, and other financial instruments, on the open market. ERP contributions are invested in a mix of financial instruments; however, the Equity Component contributions are invested primarily in common stock of the Company. Effective November 29, 2024, each component of the ERP was terminated and frozen and no future contributions are permitted to be made. For each existing participant, the account balances will be liquidated and paid out to each participant at a time to be determined, but which will occur sometime between the 12 -month anniversary and the 24 -month anniversary of the termination of the components of the ERP pursuant to regulations promulgated by the Department of the Treasury. The Company incurred no expense for the ERP during the nine months ended September 30, 2025 due to the freezing of the plans and a net expense of $ 6.8 million during the nine months ended September 30, 2024. The Company’s carrying value of the liability under the ERP was $ 58.1 million as of September 30, 2025 and $ 61.4 million as of December 31, 2024, which is included in interest payable and other liabilities on the balance sheet. The Company’s shares of common stock held as investments in the Rabbi Trust of the ERP as of September 30, 2025 and December 31, 2024 totaled 47,806 and 48,877 shares with an historical cost basis of $ 31.4 million and $ 31.8 million, respectively. All amounts have been fully funded into the Rabbi Trust as of September 30, 2025 and December 31, 2024. The consolidated investments held in the Rabbi Trust are recorded at fair value with changes in unrealized gains or losses recorded within non-interest income, and the equal and offsetting charges in the related liability are recorded in non-interest expense in the consolidated statements of income. Net gains on ERP investments were $ 2.2 million and $ 2.4 million at September 30, 2025 and 2024, respectively. Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices. Senior Management Retention Plan The Company, through the Bank, sponsors a Senior Management Retention Plan (“SMRP”) for certain senior level employees. The SMRP is a non-qualified deferred compensation plan and was developed to supplement the Company’s Profit Sharing Plan, which, as a qualified retirement plan, has a ceiling on benefits as set by the Internal Revenue Service. All contributions are discretionary and subject to the Board of Directors approval. The Company maintains a Rabbi Trust to fund, in part, the SMRP. The Rabbi Trust is an irrevocable grantor trust to which the Company may contribute assets for the limited purpose of funding a non-qualified deferred compensation plan. The Company may not use the assets of the Rabbi Trust for any purpose other than meeting its obligations under the SMRP; however, the assets of the Rabbi Trust remain subject to the claims of its creditors and are included in the consolidated financial statements. The Company contributes cash to the Rabbi Trust from time to time for the sole purpose of funding the SMRP. 31 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 9—Employee Benefit Plans—Continued The Rabbi Trust will use any cash the Company contributes to purchase shares of common stock of the Company, and other financial instruments, on the open market. Contributions to the SMRP are invested primarily in common stock of the Company. Effective November 29, 2024, the SMRP was terminated and frozen and no future contributions are permitted to be made. For each existing participant, the account balances will be liquidated and paid out to each participant at a time to be determined, but which will occur sometime between the 12 -month anniversary and the 24 -month anniversary of the termination of the plan pursuant to regulations promulgated by the Department of the Treasury. The Company incurred no expense for the SMRP during the nine months ended September 30, 2025 due to the freezing of the plans and a net expense of $ 3.4 million for the nine months ended September 30, 2024. The plan recognized $ 0.1 million in forfeitures for the nine months ended September 30, 2025. The Company’s carrying value of the liability under the SMRP was $ 20.6 million as of September 30, 2025 and $ 21.2 million as of December 31, 2024, which is included in interest payable and other liabilities on the balance sheet. The Company’s shares of stock held as investments in the Rabbi Trust of the SMRP as of September 30, 2025 and December 31, 2024 totaled 17,946 and 19,647 shares with an historical cost basis of $ 13.9 million and $ 14.6 million, respectively. All amounts have been fully funded into the Rabbi Trust as of September 30, 2025 and December 31, 2024. The consolidated investments held in the Rabbi Trust are recorded at fair value with changes recorded within non-interest income and the equal and offsetting charges in the related liability are recorded in non-interest expense in the consolidated statements of income. Net gains on SMRP plan investments were $ 0.6 million and $ 0.5 million at September 30, 2025 and 2024, respectively. Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices. 32 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 10—Stock-Based Compensation Restricted Stock Award Plan At the special meeting of shareholders held on November 25, 2024, the Company’s shareholders approved the Farmers & Merchants Bancorp 2025 Restricted Stock Retirement Plan (the “2025 Plan”). The 2025 Plan provides for the issuance of up to 80,000 shares to directors and employees of the Company and its subsidiaries and affiliates. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date. Due to the illiquidity of the stock, the fair value of the stock was determined using a volume weighted average price over a 30 -day period as of the grant date, which equaled $ 1,033.03 per share. The first awards were granted on February 3, 2025 and totaled 30,818 shares. The awards contain a service condition, which requires the employees to provide services during the applicable vesting periods. The awards were comprised of a one-year award for directors and two-year , three-year and four-year awards for employees depending on their roles and responsibilities. The awards vest on a pro-rated basis over the life of the award. Total remaining shares issuable under the 2025 Plan were 50,598 at September 30, 2025. The unvested restricted shares generally have voting rights and dividend rights; however, the dividends are paid to the holder only if, when and to the extent such unvested restricted shares vest. Dividends on forfeited restricted stock are also forfeited. The following tables summarize the change in the Company’s nonvested shares for the three and nine months ended September 30, 2025: Number of Shares Weighted Average Fair Value at Grant-Date Restricted Stock Award Nonvested shares outstanding, June 30, 2025 30,818 $ 1,033.03 Granted - - Vested - - Forfeited 1,416 - Nonvested shares outstanding, September 30, 2025 29,402 $ 1,033.03 Number of Shares Weighted Average Fair Value at Grant-Date Restricted Stock Award Nonvested shares outstanding, January 1, 2025 - $ - Granted 30,818 1,033.03 Vested - - Forfeited 1,416 - Nonvested shares outstanding, September 30, 2025 29,402 $ 1,033.03 For the nine months ended September 30, 2025, the Company has recognized $ 8.2 million in compensation cost related to shares granted under the 2025 Plan. As of September 30, 2025, there was $ 23.6 million of total unrecognized compensation cost related to nonvested shares granted under the 2025 Plan. The remaining cost is expected to be recognized over a weighted-average period of 1.92 years. No shares of restricted stock vested during the three and nine months ended September 30, 2025. 33 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 11—Derivatives Derivatives Not Designated as Hedging Instruments As a customer accommodation, the Company may enter into interest rate swaps with its loan customers. The Company also enters into corresponding offsetting derivatives with third parties. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes. The fair value of these swaps are recorded as components of other assets and other liabilities in the Company’s consolidated balance sheets. September 30, 2025 December 31, 2024 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Derivatives not designated as hedging instruments: Interest rate swaps related to customer loans $ 8,842 $ 218 $ - $ - Total included in other assets $ 218 $ - Derivatives not designated as hedging instruments: Interest rate swaps related to customer loans $ 8,842 $ 229 $ - $ - Total included in other liabilities $ 229 $ - Location of Gain or (Loss) Recognized in Income on Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) Derivatives 2025 2024 2025 2024 Derivatives not designated as hedging instruments: Interest rate swaps related to loan customers Other (expense) income $ 1 $ - $ ( 11 ) $ - Total $ 1 $ - $ ( 11 ) $ - Note 12—Commitments and Contingencies In the normal course of business, the Company enters into financial instruments with off-balance-sheet risk/commitments in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These instruments include commitments to extend credit, letters of credit, and other types of financial guarantees. The Company had the following off-balance-sheet risk/commitments as of the dates indicated. (Dollars in thousands) September 30, 2025 December 31, 2024 Commitments to extend credit, including unsecured commitments of $ 20,926 and $ 20,535 as of September 30, 2025 and December 31, 2024, respectively $ 1,057,402 $ 1,006,649 Standby letters of credit, including unsecured commitments of $ 4,993 and $ 4,490 as of September 30, 2025 and December 31, 2024, respectively 18,995 15,411 The Company’s exposure to credit loss in the event of nonperformance by the other party with regard to standby letters of credit, undisbursed loan commitments, and financial guarantees is represented by the contractual notional amount of those instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. The Company uses the same credit policies in making commitments and conditional obligations as it does for recorded balance sheet items. The Company may or may not require collateral or other security to support financial instruments with credit risk. Evaluations of each customer’s creditworthiness are performed on a case-by-case basis. The estimated exposure to loss from these commitments is included in the allowance for credit losses for unfunded loan commitments, which amounted to $ 2.8 million at September 30, 2025 and $ 2.7 million at December 31, 2024. 34 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 12—Commitments and Contingencies—Continued Standby letters of credit are conditional commitments issued by the Company to guarantee performance of or payment for a customer to a third-party. Outstanding standby letters of credit at September 30, 2025 had maturity dates ranging from 1 to 54 months with a final expiration in some cases up to April 1, 2030. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company has commitments to fund investments in low income housing tax credit investments (“LIHTC”) partnerships and limited liability companies. The Company invests in LIHTC partnerships and solar tax funds that are designed to generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method, and tax credit investment amortization expense is a component of the provision for income taxes. At September 30, 2025 and December 31, 2024, the balance of the investments in LIHTC was $ 45.3 million and $ 43.8 million, respectively. These balances are reflected in other assets on the consolidated balance sheets. Total unfunded commitments related to the investments in LIHTC totaled $ 16.0 million and $ 18.9 million at September 30, 2025 and December 31, 2024, respectively. These balances are reflected in interest payable and other liabilities on the consolidated balance sheets. The Company expects to fulfill these commitments through 2040. Additionally, during the nine months ended September 30, 2025 and the year ended December 31, 2024, the Company recognized tax credits from its investments in LIHTC of $ 3.9 million and $ 4.4 million, respectively. In the ordinary course of business, the Company becomes involved in litigation arising out of its normal business activities. Management, after consultation with legal counsel, believes that the ultimate liability, if any, resulting from the disposition of such claims would not be material in relation to the financial position of the Company. The Company may be required to maintain average reserves on deposit with the FRB primarily based on deposits outstanding. Reserve requirements are offset by the Company’s vault cash and deposit balances maintained with the FRB. Note 13—Subsequent Events In accordance with ASC Topic 855, “ Subsequent Events ”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2025 up through the date the Company issued the financial statements. During this period, there were no subsequent events that required recognition or disclosure. 35 Table of Contents