10 unchanged sentences
“Bank” or “F&M Bank”) and for other banking or banking-related subsidiaries, which the Company may establish or acquire.
−Removed: Over 108 years ago, August 1, 1916, marked the first day of business for Farmers & Merchants Bank (the “Bank”).
−Removed: Bank was incorporated under the laws of the State of California and licensed as a state-chartered bank.
+Added: Over 109 years ago, August 1, 1916, marked the first day of business for Farmers & Merchants Bank, later renamed
+Added: Farmers & Merchants Bank of Central California.
+Added: The Bank was incorporated under the laws of the State of California and licensed as a state-chartered bank.
The Bank’s first venture out of Lodi occurred when the Galt office opened in 1948.
−Removed: Since then the Bank has opened full-service branches in
−Removed: Linden, Manteca, Riverbank, Modesto, Sacramento, Elk Grove, Turlock, Hilmar, Stockton, Merced, Walnut Creek, Concord, Walnut Grove, Oakland, Napa, and Danville.
−Removed: As a legal entity separate and distinct from its subsidiary, the Company’s principal
−Removed: source of funds is, and will continue to be, dividends paid by and other funds received from the Bank.
−Removed: Legal limitations are imposed on the amount of dividends that may be paid and loans that may be made by the Bank to the Company.
−Removed: In March 2002, F & M Bancorp, Inc.
−Removed: was created to protect the name “F & M Bank.” During 2002, the Company completed a fictitious name filing in California to begin using the streamlined name, “F & M
−Removed: Bank,” as part of a larger effort to enhance the Company’s image and build brand name recognition.
−Removed: Since 2002, the Company has converted all of its daily operating and image advertising to the “F & M Bank” name and the Company’s logo, slogan
−Removed: and signage were redesigned to incorporate the trade name, “F & M Bank.”
+Added: Since then the Bank has opened full-service branches in Linden, Manteca, Riverbank, Modesto, Sacramento, Elk Grove, Turlock, Hilmar, Stockton, Merced, Walnut Creek, Concord, Walnut Grove, Oakland, Napa, and Danville.
+Added: As a legal entity separate
+Added: and distinct from its subsidiary, the Company’s principal source of funds is, and will continue to be, dividends paid by and other funds received from the Bank.
+Added: Legal limitations are imposed on the amount of dividends that may be paid and loans
+Added: that may be made by the Bank to the Company.
The Company’s outstanding common stock as of December 31, 2025, consisted of 697,904 shares of common stock, $0.01 par value.
14 unchanged sentences
The return on average assets is calculated by dividing the Company’s net income by its total average assets and
−Removed: the return on average equity is calculated by dividing the Company’s net income by its shareholder equity.
+Added: the return on average equity is calculated by dividing the Company’s net income by its shareholders’ equity.
The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income.
6 unchanged sentences
Years Ended December 31
−Removed: (Dollars in thousands, except per share data)
+Added: (Dollars in thousands, except share and per share amounts)
Selected Income Statement Information:
9 unchanged sentences
Selected financial ratios:
−Removed: Basic and diluted earnings per share
+Added: Basic earnings per share
+Added: Diluted earnings per share
Cash dividends per common share
8 unchanged sentences
As of December 31,
−Removed: (Dollars in thousands, except per share data)
+Added: (Dollars in thousands, except share and per share amounts)
Selected Balance Sheet Information:
11 unchanged sentences
Tangible book value per share
−Removed: Allowance for credit losses to total loans
+Added: Allowance for credit losses to total loans and leases
Non-performing assets to total assets
79 unchanged sentences
Tangible Book Value Per Common Share
−Removed: (Dollars in thousands, except per share data)
+Added: (Dollars in thousands, except share and per share amounts)
Shareholders' equity
23 unchanged sentences
The following table presents performance metrics for the periods indicated:
−Removed: (dollars in thousands, except per share amounts)
+Added: (Dollars in thousands, except share and per share amounts)
Earnings Summary:
8 unchanged sentences
Per Common Share Data:
+Added: Basic earnings per common share
Diluted earnings per common share
22 unchanged sentences
(Dollars in thousands)
−Removed: Average Balance
−Removed: Interest Income / Expense
−Removed: Average Yield /
−Removed: Average Balance
−Removed: Interest Income / Expense
−Removed: Average Yield /
Interest earnings deposits in other banks and federal funds sold
18 unchanged sentences
Certificates of deposit greater than $250,000
−Removed: Certificates of deposit less than $250,000
+Added: Certificates of deposit equal to or less than $250,000
Total interest-bearing deposits
18 unchanged sentences
Balances with the FRB earned an average interest rate of 4.36% and 5.35% for the years ended December 31, 2025 and 2024, respectively.
−Removed: The increase was primarily the result of the Federal
−Removed: Reserve increasing rates by 100 basis points from February 2023 to July 2023.
−Removed: The Federal Reserve dropped rates 100 basis points from September 2024 to December 2024.
−Removed: Average interest-bearing deposits with
−Removed: banks was $314.9 million and $519.3 million for the years ended December 31, 2024 and 2023, respectively, and decreased primarily to fund loan and lease growth and the purchases of investment securities.
−Removed: Interest income on interest-bearing
−Removed: deposits with banks was $16.9 million and $26.9 million for the years ended December 31, 2024 and 2023, respectively.
+Added: The decrease was primarily the result of the Federal
+Added: Reserve decreasing rates by 100 basis points from September 2024 to December 2024 and by 75 basis points from September 2025 to December 2025.
+Added: Average interest-bearing deposits with banks was $271.3 million and
+Added: $314.9 million for the years ended December 31, 2025 and 2024, respectively, and decreased primarily to fund the purchases of investment securities.
+Added: Interest income on interest-bearing deposits with banks was $11.8 million and $16.9 million for
+Added: the years ended December 31, 2025 and 2024, respectively.
+Added: The decrease was due to lower average interest-bearing deposits with banks and the decline in interest rates.
The investment portfolio is also a component of the Company’s earning assets.
8 unchanged sentences
generally lower than that of loans and leases, the yield earned on investments is generally less than that of loans and leases.
−Removed: Average total investment securities were $1.1 billion and $990.5 million for the years ended December 31, 2024 and 2023, respectively.
+Added: Average total investment securities were $1.4 billion and $1.1 billion for the years ended December 31, 2025 and 2024, respectively.
The average yield on total investment securities was 3.44% and 2.79% for the
years ended December 31, 2025 and 2024, respectively.
−Removed: The increase in the yield reflects the higher yields on investment purchases during the year.
−Removed: See “Investment Securities” for a discussion of the Company’s investment strategy in 2024.
+Added: The increase in the yield reflects the higher interest rates on investment securities based on the yield curve and the higher yields on investment purchases made during the year.
+Added: “Investment Securities” for a discussion of the Company’s investment strategy in 2025.
Average loans and leases held for investment were $3.61 billion and $3.67 billion for the years ended December 31, 2025 and 2024, respectively.
1 unchanged sentence
for the years ended December 31, 2025 and 2024, respectively.
−Removed: The increase in the loan yield reflects the increase in market interest rates over the prior year.
+Added: The slight decrease in the loan yield reflects the decrease in market interest rates over the prior year.
Average interest-bearing deposits were $3.33 billion and $3.29 billion for the years ended December 31, 2025 and 2024, respectively.
1 unchanged sentence
years ended December 31, 2025 and 2024, respectively.
−Removed: Total interest expense on interest-bearing deposits was $63.4 million and $37.5 million for the years ended December 31, 2024 and 2023, respectively, with the increase driven by increases in
−Removed: short-term market interest rates during 2023 and customers seeking higher rates on deposit products.
+Added: Total interest expense on interest-bearing deposits was $59.6 million and $63.4 million for the years ended December 31, 2025 and 2024, respectively, with the decrease driven by decreases in
+Added: short-term market interest rates during 2024 and 2025.
The average rate paid on total funding costs was 1.24% and 1.38% for the years ended December 31, 2025 and 2024, respectively.
24 unchanged sentences
Certificates of deposit greater than $250,000
−Removed: Certificates of deposit less than $250,000
+Added: Certificates of deposit equal to or less than $250,000
Total interest-bearing deposits
5 unchanged sentences
(Dollars in thousands)
−Removed: $ Better / (Worse)
−Removed: % Better / (Worse)
Selected Income Statement Information:
9 unchanged sentences
For the years ended December 31, 2025 and 2024, net income was $93.6 million compared with $88.5 million, respectively.
−Removed: The increase in net income was primarily the result of no provision for credit losses in 2024
−Removed: compared to $9.4 million in 2023 and an increase in non-interest income of $5.8 million.
−Removed: This increase was offset by a decrease in net interest income of $8.7 million, higher income tax expense of $5.5 million and a higher non-interest expense
−Removed: $0.8 million.
+Added: The increase in net income was primarily the result of an increase in net interest income of
+Added: $12.5 million and an increase in non-interest income of $2.9 million.
+Added: This increase was partially offset by a higher non-interest expense of $5.4 million, an increase in the provision for credit losses of $3.5 million, and a higher income tax
+Added: expense of $1.4 million.
Net Interest Income and Net Interest Margin
−Removed: For the year ended December 31, 2024, net interest income decreased $8.7 million, or 4.04%, to $206.7 million compared with $215.4 million for the same period a year earlier.
−Removed: The decrease was primarily due to an
−Removed: increase in interest expense from $37.5 million to $63.4 million in 2024 as the average cost of total deposits increased from 0.80% in 2023 to 1.35% in 2024 and average total deposits increased from $4.66 billion for 2023 to $4.70 billion in
−Removed: The cost of funds for the year ended December 31, 2024, increased by 56 basis points from 0.82% to 1.38% compared to the same period a year earlier.
−Removed: The increase in interest expense was partially offset by an increase in loan and lease
−Removed: interest and fee income from $204.5 million in 2023 to $223.3 million in 2024 as the average loan yield increased from 5.84% in 2023 to 6.08% in 2024 and average loan and lease balances increased from $3.50 billion in 2023 to $3.67 billion in
+Added: For the year ended December 31, 2025, net interest income increased $12.5 million, or 6.04%, to $219.2 million compared with $206.7 million for the same period a year earlier.
+Added: The increase was primarily due to an
+Added: increase in interest income from $272.6 million in 2024 to $280.4 million in 2025 as the average investment yield increased from 2.79% in 2024 to 3.44% in 2025 and average investment balances increased from $1.1 billion in 2024 to $1.4 billion in
+Added: The increase in interest income was partially offset by a decrease in loan and lease interest and fee income from $223.3 million in 2024 to $218.7 million in 2025 as the average loan yield decreased from 6.08% in 2024 to 6.06% in 2025 and
+Added: average loan and lease balances decreased from $3.67 billion in 2024 to $3.61 billion in 2025.
+Added: The increase in the net interest income also benefited from a decrease in interest expense from $65.3 million in 2024 to $60.3 million in 2025 as the
+Added: cost of average total deposits decreased from 1.35% in 2024 to 1.22% in 2025 while average total deposits increased from $4.73 billion for 2024 to $4.87 billion in 2025.
+Added: The cost of funds for the year ended December 31, 2025, decreased by 14
+Added: basis points from 1.38% to 1.24% compared to the same period a year earlier.
+Added: The net interest margin increased to 4.15% in 2025 from 4.05% in 2024 due to the changes in net interest income as described above.
Provision for Credit Losses.
1 unchanged sentence
The provision is the amount
−Removed: required to maintain the allowance for credit losses at a level that, in management’s judgment, is adequate to absorb expected losses, over the life of the loans and leases, unfunded loan commitments and HTM securities portfolios.
−Removed: Based on the Company’s credit quality of the loan and lease portfolio, modest loan growth of 0.65% and the calculations of the allowance for credit losses under CECL, no provision for credit losses for the year
−Removed: ended December 31, 2024 was necessary compared with $9.4 million for the same period a year earlier comprised of $7.8 million for the provision for credit losses on loans and leases and $1.6 million for the provision for credit losses on unfunded
−Removed: Net charge-offs for the year ended December 31, 2024 were $0.7 million compared to net recoveries of $0.3 million for the same period a year earlier.
−Removed: The provision of $9.4 million in 2023 was due to loan growth of 4.05% and higher
−Removed: estimated losses inherent in the loan and lease portfolio based on the then current economic environment.
+Added: required to maintain the allowance for credit losses at a level that, in management’s judgment, is adequate to absorb expected losses, over the life of the loans and leases, unfunded loan commitments and the HTM securities portfolio.
+Added: Based on the Company’s evaluation of the credit quality of the loan and lease portfolio and the calculations of the allowance for credit losses under CECL methodology, the Company recorded a $3.5 million provision
+Added: for credit losses for the year ended December 31, 2025 compared with no provision for credit losses in 2024.
+Added: Net charge-offs for the year ended December 31, 2025 were $1.8 million compared to net charge-offs of $0.7 million in 2024.
+Added: The increases
+Added: in net charge-offs, the provision for credit losses, and the allowance for credit losses reflected the ongoing economic stress in certain agricultural sectors.
+Added: For the year ended December 31, 2024, based on the Company’s evaluation of the credit
+Added: quality of the loan and lease portfolio, modest loan growth of 0.65% and the calculations of the allowance for credit losses under CECL methodology, no provision for credit losses was necessary.
Non-interest Income
−Removed: Years Ended December 31
(Dollars in thousands)
−Removed: $ Better / (Worse)
−Removed: % Better / (Worse)
Non-interest Income:
4 unchanged sentences
Increase in cash surrender value of BOLI
−Removed: Net gain/(loss) on sale of securities available-for-sale
+Added: Net gain on sale of securities available-for-sale
Total non-interest income
−Removed: Non-interest income increased $5.8 million to $20.7 million for 2024 compared with $14.9 million for the same period a year earlier.
−Removed: The year-over-year increase in non-interest income was primarily a result of
−Removed: recording a $0.7 million gain on sale of available-for-sale securities in 2024 compared to a loss on sale of available-for-sale securities of $8.2 million in 2023, offset by a reduction of $4.3 million in non-taxable death benefit gains on
−Removed: bank-owned life insurance (“BOLI”) as 2023 included the death of a former employee with a significant BOLI policy.
−Removed: The Company recorded net gains on deferred compensation plan investments of $3.3 million in 2024 compared to net gains of $3.0 million in 2023.
+Added: Non-interest income increased $2.9 million to $23.6 million for 2025 compared with $20.7 million for 2024.
+Added: The year-over-year increase in non-interest income was primarily due to the $2.1 million increase in other
+Added: non-interest income, of which $1.3 million related to net gains on early lease terminations, a $1.4 million net gain on deferred compensation benefits and a $0.3 million gain on equity investments, partially offset by a reduction of $0.7 million
+Added: in net gains on the sale of investment securities as the net gain on the sale of securities in 2024 was $743,000 compared to a net gain of $44,000 in 2025.
+Added: The Company recorded net gains on deferred compensation plan investments of $4.6 million in 2025 compared to net gains of $3.3 million in 2024, due to market value changes in underlying assets and increases in
+Added: interest and dividends.
See Note 12 “Employee Benefit Plans”, located in Item 8.
−Removed: Statements and Supplementary Data” in this Form 10-K for a description of these plans.
−Removed: Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest
−Removed: rates and stock prices.
−Removed: Although GAAP requires these investment gains/losses be recorded in non-interest income, an offsetting entry is also required to be made to non-interest expense resulting in no net-effect on the Company’s net income.
+Added: “Financial Statements and Supplementary Data” in this Form 10-K for a description of these plans.
+Added: Balances in non-qualified deferred compensation plans may be
+Added: invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices.
+Added: Although GAAP requires these investment gains/losses be recorded in non-interest income, an offsetting entry is also required to
+Added: be made to non-interest expense resulting in no net-effect on the Company’s net income.
Non-interest Expense
−Removed: Years Ended December 31
(Dollars in thousands)
−Removed: $ Better / (Worse)
−Removed: % Better / (Worse)
Non-interest Expense:
5 unchanged sentences
Total non-interest expense
−Removed: Non-interest expense increased $0.8 million to $105.1 million for 2024 compared with $104.3 million for the same period a year earlier.
−Removed: The year-over-year increase was primarily comprised of a $1.6 million increase
−Removed: in salaries and employee benefits, a $1.3 million increase in professional services and a $0.8 million increase in data processing.
−Removed: The increase in professional services was due primarily to an increase in legal services related to corporate
−Removed: The increase in data processing was due primarily to upgrades in technology systems.
−Removed: These increases were partially offset by a decrease in other non-interest expense of $3.5 million primarily from the adoption of the proportional
−Removed: amortization approach under GAAP which shifts the amortization of low-income housing tax credits from other non-interest expense to income tax expense.
−Removed: For the year ended December 31, 2024, the Company’s expense efficiency ratio was 46.24%
−Removed: compared with 45.31% for the same period a year earlier as the reduction in revenue outpaced the slight increase in expenses.
−Removed: Net gains on deferred compensation plan obligations were $3.3 million in 2024 compared to net gains of $3.0 million in 2023.
+Added: Non-interest expense increased $5.4 million to $110.5 million for 2025 compared with $105.1 million for 2024.
+Added: The year-over-year increase was primarily comprised of a $1.7 million increase in salaries and employee
+Added: benefits, primarily due to an increase in FTEs from 373 in 2024 to 383 in 2025, normal annual cost of living increases, and higher cost of benefit premiums.
+Added: The remainder of the increase in non-interest expense was due to a $1.4 million increase
+Added: in the net gain on deferred compensation benefits, a $1.3 million increase in other operating expenses, primarily due to the write down of OREO of $873,000, and a $0.9 million increase in data processing expense.
+Added: Net gains on deferred compensation plan obligations were $4.6 million in 2025 compared to net gains of $3.3 million in 2024, due to market value changes in underlying assets and increases in interest and dividends.
See Note 12 “Employee Benefit Plans”, located in “Item 8.
−Removed: “Financial Statements and
−Removed: Supplementary Data” in this Form 10-K, for a description of these plans.
−Removed: 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
−Removed: Although GAAP requires these gains on obligations to be recorded in non-interest expense, an offsetting entry is also required to be made to non-interest income resulting in no net-effect on the Company’s net income.
+Added: “Financial Statements and Supplementary Data” in this Form 10-K, for a description of these plans.
+Added: Balances in non-qualified deferred compensation plans may be invested in financial
+Added: instruments whose market value fluctuates based upon trends in interest rates and stock prices.
+Added: Although GAAP requires these gains on obligations to be recorded in non-interest expense, an offsetting entry is also required to be made to
+Added: non-interest income resulting in no net-effect on the Company’s net income.
+Added: For the year ended December 31, 2025, the Company’s expense efficiency ratio was 45.52% compared with 46.24% for 2024 as the increase in revenue outpaced the increase in expenses.
+Added: The efficiency ratio is calculated
+Added: by dividing non-interest expense by the sum of net interest income and non-interest income.
Income Tax Expense
−Removed: For the year ended December 31, 2024, income tax expense was $33.8 million, compared with $28.2 million for the same period a year earlier.
−Removed: For the year ended December 31, 2024, the effective tax rate was 27.64%
−Removed: compared with 24.23% for the same period a year earlier.
−Removed: The Company’s higher income tax expense and effective tax rates for 2024 compared to 2023 was due in part to the adoption of ASC 2023-02 which shifts the amortization of low-income housing
−Removed: tax credits from other non-interest expense to the income tax line under the proportional amortization method thereby increasing income tax expense resulting in an increase in the effective tax rate.
−Removed: The Company’s effective tax rate for 2023 was
−Removed: also lower than normal due to the non-taxable BOLI death benefit gain of $4.3 million in 2023.
−Removed: The Company’s effective tax rate can also fluctuate from year to year due to changes in the mix of taxable and tax-exempt earning sources.
+Added: For the year ended December 31, 2025, income tax expense was $35.2 million, compared with $33.8 million in 2024.
+Added: For the year ended December 31, 2025, the effective tax rate was 27.31% compared with 27.64% in 2024.
+Added: The Company’s effective tax rate can also fluctuate from year to year due primarily to changes in the mix of taxable and tax-exempt earning assets.
+Added: The effective rates were lower than the combined Federal and State statutory rate of 30% primarily
+Added: due to credits associated with low-income housing tax credit investments (“LIHTC”) and tax-exempt interest income on municipal securities and loans.
+Added: The Company files U.S.
+Added: and state income tax returns in jurisdictions with various statutes of limitations.
+Added: The 2022 through 2025 federal tax years and the 2021 through 2025 state tax years remain subject to
+Added: selection for examination as of December 31, 2025.
+Added: The IRS is in the process of reviewing the Company’s 2023 tax return including inquiries related to certain leasing investment tax credits.
+Added: The timing related to when the IRS review will be
+Added: complete remains uncertain.
Balance Sheet Analysis
Total assets were $5.7 billion at December 31, 2025, an increase of $319.9 million or 5.96% compared to December 31, 2024.
−Removed: Loans and leases held for investment grew $23.7 million or 0.65% to $3.68 billion at
−Removed: December 31, 2024, compared with $3.65 billion at December 31, 2023.
−Removed: Total deposits were $4.70 billion at December 31, 2024 compared with $4.67 billion at December 31, 2023, an increase of $31.0 million, or 0.67%.
+Added: The net investment portfolio increased by $436.0 million, or 35.34%, to $1.7 billion at
+Added: December 31, 2025, compared to $1.2 billion at December 31, 2024.
+Added: Total cash and cash equivalents were $144.9 million at December 31, 2025, a decrease of $67.7 million or 31.85% from $212.6 million at December 31, 2024.
+Added: Gross loans and leases
+Added: held for investment were $3.6 billion at December 31, 2025, compared with $3.7 billion at December 31, 2024, a decrease of $29.4 million, or 0.80%.
+Added: Total deposits were $5.0 billion at December 31, 2025 compared with $4.7 billion at December 31,
+Added: 2024, an increase of $278.7 million, or 5.93%.
+Added: Our loan to deposit ratio was 73.67% and 78.53% as of December 31, 2025 and December 31, 2024, respectively.
Cash and Cash Equivalents
1 unchanged sentence
Interest-bearing deposits with banks consisted primarily of FRB
−Removed: Since balances at the FRB are effectively risk free, the Company elected to maintain its excess cash at the FRB.
Interest-bearing deposits with banks totaled $84.2 million at December 31, 2025 and $141.5 million at December 31, 2024.
−Removed: The decrease was primarily due to funding loan and lease growth and the purchase of available-for-sale securities during the year.
−Removed: The Company’s total cash and cash equivalents as of December 31, 2024 represented 4.0% of the Company’s total
−Removed: assets as compared to 7.7% as of December 31, 2023.
+Added: The decrease was primarily due to the Company proactively moving excess cash into available-for-sale securities in
+Added: anticipation of lower market rates in the second half of 2025.
+Added: The Company’s total cash and cash equivalents as of December 31, 2025 represented 2.6% of the Company’s total assets as compared to 4.0% as of December 31, 2024.
Investment Securities
1 unchanged sentence
The increase was due to the purchase of $574.4 million in
−Removed: investment securities during 2024 offset by normal principal maturities and pay downs and the sale of $69.5 million in available-for-sale securities.
−Removed: During 2024, as part of managing the investment portfolio and balance sheet, the portfolio mix
−Removed: shifted as available-for-sale securities increased from $182.5 million as of December 31, 2023 to $464.4 million as of December 31, 2024 while the held-to-maturity securities decreased from $817.7 million as of December 31, 2023 to $769.4 million
−Removed: as of December 30, 2024.
+Added: investment securities during 2025 offset by normal principal maturities and pay downs and the sale of $24.8 million in securities comprised of $21.6 million in available-for-sale securities and $3.2 million in held-to-maturity securities.
+Added: held-to-maturity securities sold were mortgage-backed securities with a remaining book value of less than 15% of the original principal balance at the time of purchase and, as allowed under ASC 320-10-25-14 ,
+Added: the sales were considered maturities for purposes of security classification.
The Company uses its investment portfolio to manage interest rate and liquidity risks.
−Removed: The Company's total investment portfolio as of December 31, 2024 represented 22.98% of the Company’s total assets as compared to
−Removed: 18.84% at December 31, 2023.
+Added: The Company's total investment portfolio as of December 31, 2025 represented
+Added: 29.35% of the Company’s total assets as compared to 22.98% of total assets as of December 31, 2024.
Available-for-sale securities are carried at fair value and held-to-maturity securities are carried at amortized cost under GAAP.
−Removed: The carrying value of our portfolio of investment securities was as follows:
+Added: The carrying value of our portfolio of investment securities for the dates indicated
+Added: were as follows:
As of December 31,
5 unchanged sentences
Collateralized mortgage obligations (1)
+Added: Municipal securities
Corporate securities
Total available-for-sale securities
−Removed: (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government
−Removed: sponsored entity of the U.S.
+Added: All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S.
As of December 31,
7 unchanged sentences
Total held-to-maturity securities
−Removed: (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government
−Removed: sponsored entity of the U.S.
−Removed: The following table shows the carrying value for final contractual maturities of investment securities and the weighted average yields of such securities, including the benefit of tax-exempt securities:
+Added: All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S.
+Added: The following tables show the carrying value for final contractual maturities of investment securities and the weighted average yields of such securities, including the benefit of tax-exempt securities:
As of December 31, 2025
11 unchanged sentences
Collateralized mortgage obligations (1)
+Added: Municipal securities
Corporate securities
142 unchanged sentences
“Quantitative and Qualitative Disclosures about Market Risk” in this Form 10-K for further details.
−Removed: The Company's loan and lease portfolio at December 31, 2024 totaled $3.7 billion, an increase of $23.7 million or 0.65% over December 31, 2023.
−Removed: The following table sets forth the distribution of the loan and lease portfolio by type and percent at the end of each period presented:
+Added: The Company's loan and lease portfolio at December 31, 2025 totaled $3.6 billion, a decrease of $29.4 million or 0.80% compared to December 31, 2024.
+Added: The decrease was due to the Company prioritizing risk
+Added: appropriate loan pricing and structure over loan growth.
+Added: This was primarily due to industry market pricing on loans not adequately compensating for overall loan risk and duration risk on loans.
+Added: The following table sets forth the distribution of the loan and lease portfolio by type and percent at the dates indicated:
(Dollars in thousands)
−Removed: Percent of Total
−Removed: Percent of Total
Gross Loans and Leases
5 unchanged sentences
Total gross loans and leases
−Removed: The following table shows the maturity distribution and interest rate sensitivity of the loan and lease portfolio of the Company as of December 31, 2024.
+Added: The following table shows the maturity distribution and interest rate sensitivity of the loan and lease portfolio of the Company at December 31, 2025:
Loan Contractual Maturity
(Dollars in thousands)
−Removed: One Year or Less
−Removed: After One But Within Five Years
−Removed: After Five But Within Fifteen Years
−Removed: After Fifteen Years
+Added: Fifteen Years
+Added: After Fifteen
Gross loan and leases:
5 unchanged sentences
Total gross loans and leases
−Removed: Rate Structure for Loans
−Removed: Variable Rate
+Added: Rate structure for loans and leases
+Added: Adjustable rate
Total gross loans and leases
−Removed: The following table summarizes the loans for which the accrual of interest has been discontinued and loans more than 90 days past due and still accruing interest, and OREO (as hereinafter defined):
+Added: The following table summarizes the loans for which the accrual of interest has been discontinued and OREO (as hereinafter defined) at the dates indicated:
(Dollars in thousands)
12 unchanged sentences
Non-performing assets to total assets
−Removed: Non-Accrual Loans and Leases – Accrual of interest on loans and leases is generally discontinued when a loan or lease becomes
−Removed: contractually past due by 90 days or more with respect to interest or principal.
−Removed: When loans and leases are 90 days past due, but in management's judgment are well secured and in the process of collection, they may not be classified as
−Removed: When a loan or lease is placed on non-accrual status, all interest previously accrued but not collected is reversed.
−Removed: Income on such loans and leases is then recognized only to the extent that cash is received and where the future
−Removed: collection of principal is probable.
−Removed: The Company had $929,000 in non-accrual loans and leases as of December 31, 2024, and no non-accrual loans or leases at December 31, 2023.
+Added: Non-Accrual Loans and Leases – Accrual of interest on loans and leases is generally discontinued when a loan or lease becomes contractually past due by 90 days or more with
+Added: respect to interest or principal.
+Added: When loans and leases are 90 days past due, but in management's judgment are well secured and in the process of collection, they may not be classified as non-accrual.
+Added: When a loan or lease is placed on non-accrual
+Added: status, all interest previously accrued but not collected is reversed.
+Added: Income on such loans and leases is then recognized only to the extent that cash is received and where the future collection of principal is probable.
+Added: The Company had $750,000
+Added: in non-accrual loans and leases at December 31, 2025, compared to $929,000 at December 31, 2024.
Although management believes that non-performing loans and leases are generally well-secured and that potential losses are provided for in the Company’s allowance for credit losses, there can be no assurance that
future deterioration in economic conditions and/or collateral values will not result in future credit losses.
−Removed: See Note 4 “Loans and Leases”, located in Item 8.
−Removed: “Financial Statements and Supplementary Data” in this Form 10-K for an allocation of
−Removed: the allowance classified to collateral dependent loans and leases.
Other Real Estate Owned – OREO represents real property taken either through foreclosure or through a deed in lieu thereof from the borrower.
The Company records all OREO properties at amounts equal to or less than the fair market value of the properties based on current independent appraisals reduced by estimated selling costs.
−Removed: The Company reported $873,000 of foreclosed
−Removed: OREO at December 31, 2024, and 2023.
−Removed: Loan Modifications to Borrowers Experiencing Financial Difficulties – In the normal
−Removed: course of business, the Company may execute loan modifications to borrowers experiencing financial difficulties.
+Added: The Company reported no OREO at December 31,
+Added: 2025 compared to $873,000 at December 31, 2024.
+Added: Loan Modifications to Borrowers Experiencing Financial Difficulties – In the normal course of business, the Company may execute loan
+Added: modifications to borrowers experiencing financial difficulties.
Some of these modifications include:
−Removed: term extension, principal forgiveness, rate reduction, other-than-insignificant payment delay,
−Removed: or any combination of those.
−Removed: ASU 2022-02 requires certain disclosure of loans and leases that have been modified within the past 12 months and the effects that those modifications had on the modified loans and leases.
−Removed: Because the effect of most
−Removed: modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses and because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is
−Removed: generally not recorded upon modification.
+Added: term extension, principal forgiveness, rate reduction, other-than-insignificant payment delay, or any combination of those.
+Added: requires certain disclosure of loans and leases that have been modified within the past 12 months and the effects that those modifications had on the modified loans and leases.
+Added: Because the effect of most modifications made to borrowers
+Added: experiencing financial difficulty is already included in the allowance for credit losses and because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon
+Added: modification.
Occasionally, the Company modifies loans by providing principal forgiveness that is deemed to be uncollectable;
−Removed: therefore, that portion of the loan is written off, resulting in a reduction of the
−Removed: amortized cost basis and a corresponding adjustment to the allowance for credit losses.
−Removed: The Company modified six loans, with two borrowers, in the aggregate amount of $13.2 million, during the year ended December 31, 2024.
−Removed: These loans were current as of December 31, 2024.
+Added: therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a
+Added: corresponding adjustment to the allowance for credit losses.
+Added: The Company modified nine loans, with five borrowers, in the aggregate amount of $7.0 million, during the year ended December 31, 2025.
+Added: These loans were current at December 31, 2025.
Allowance for Credit Losses—Loans and Leases
15 unchanged sentences
is included within “Interest payable and other liabilities” on the consolidated balance sheets.
−Removed: The following table sets forth the activity in our allowance for credit losses on loans and leases held for investment and unfunded loan commitments for the periods indicated:
+Added: The following table sets forth the activity in our ACL on loans and leases held for investment and unfunded loan commitments for the periods indicated:
Year Ended December 31,
6 unchanged sentences
Total provision for credit losses
−Removed: Provision for credit losses
Residential and home equity
10 unchanged sentences
Total recoveries
−Removed: Net (charge-offs) / recoveries
+Added: Net charge-offs
Balance at end of year
7 unchanged sentences
Allowance for credit losses to non-performing loans and leases
−Removed: Net (charge-offs) / recoveries to average loans and leases
+Added: Net charge-offs to average loans and leases
Provision for credit losses to average loans and leases
Allowance for loan and lease losses to loans and leases held for investment
−Removed: (1) Not meaningful
−Removed: The following table indicates management’s allocation of the ACL for loan and leases by loan type as of each of the following dates:
+Added: Not meaningful (N/M)
+Added: The following table indicates management’s allocation of the ACL for loan and leases by loan type as of the dates indicated:
(Dollars in thousands)
−Removed: Percent of Each Loan Type to Total Loans
−Removed: Percent of ACL to Each Loan Type
−Removed: Percent of Each Loan Type to Total Loans
−Removed: Percent of ACL to Each Loan Type
+Added: Type to Total
+Added: Type to Total
Allowance for credit losses:
5 unchanged sentences
Total allowance for credit losses
−Removed: Total deposits were $4.70 billion and $4.67 billion at December 31, 2024 and 2023, respectively, or an increase of $31.0 million or 0.67%.
−Removed: The modest increase in total deposits was primarily due to a $35.7 million
−Removed: or 2.41% increase in non-interest bearing deposits.
−Removed: The Company experienced fluctuations in deposits during the year due in part to the seasonality within our agriculture client base along with changes in customer behavior over the last year as
−Removed: customers were seeking higher yielding deposit products or other investment alternatives such as U.S.
−Removed: Treasuries or money market funds given the interest rate environment.
−Removed: Non-interest bearing demand deposits grew $35.7 million from $1.48 billion at December 31, 2023 to $1.52 billion at December 31, 2024.
−Removed: Non-interest bearing deposits were 32.31% and 31.76% of total deposits, at
−Removed: December 31, 2024 and 2023, respectively.
−Removed: Interest bearing deposits were $3.18 billion and $3.19 billion as of December 31, 2024 and 2023, respectively.
−Removed: Interest bearing deposits are comprised of interest-bearing transaction accounts, money
−Removed: market accounts, regular savings accounts, and certificates of deposit.
−Removed: Interest-bearing transaction accounts decreased $51.3 million, or 5.5%, to $882.1 million at December 31, 2024, compared with $933.4 million at December 31, 2023.
−Removed: money market accounts decreased $24.3 million, or 1.51%, to $1.58 billion at December 31, 2024 compared with $1.61 billion at December 31, 2023.
−Removed: Certificates of deposit accounts increased $70.9 million, or 11.0%, to $715.5 million at December 31,
−Removed: 2024, compared with $664.6 million at December 31, 2023.
+Added: The following table shows the deposit balances at the dates indicated:
+Added: (Dollars in thousands)
+Added: Non-interest bearing
+Added: Interest-bearing:
+Added: Savings and money market
+Added: Certificates of deposit
+Added: Total interest-bearing
+Added: Total deposits
+Added: Total deposits increased by $278.7 million or 5.93% from December 31, 2024 to December 31, 2025.
+Added: The increase was driven by an increase in savings and money market accounts of $207.1 million or 13.1%, an increase
+Added: in non-interest bearing demand deposits of $123.9 million or 8.16%, and an increase in certificates of deposit of $27.5 million or 3.9% from 2024 to 2025, respectively, all partially offset by a decrease of $79.8 million or 9.0% in
+Added: interest-bearing demand deposits from 2024 to 2025.
+Added: The increases were primarily from an increase in the number of client accounts and fluctuations in client balances along with shifts from lower yielding demand deposits into higher yielding
+Added: savings and money market accounts and certificates of deposit.
+Added: Conversely, this shift contributed to the decrease in interest-bearing demand deposits.
+Added: Non-interest bearing deposits were 32.99% and 32.31% of total deposits, at December 31, 2025
+Added: and 2024, respectively.
The following table shows the average amount and average rate paid on the categories of deposits for each of the periods presented:
11 unchanged sentences
Certificates of deposit greater than $250,000
−Removed: Certificates of deposit less than $250,000
+Added: Certificates of deposit equal to or less than $250,000
Total interest-bearing deposits
3 unchanged sentences
The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements.
−Removed: increase in short-term interest rates during 2023 and customers seeking higher yielding deposit products continued to place pressure on deposit pricing during 2024.
−Removed: The Company did reduce interest rates during the last four months of 2024 after
−Removed: the Federal Reserve cut interest rates by 100 basis points between September and December.
−Removed: The average cost of total deposits, including non-interest bearing deposits, increased to 1.35% for 2024 compared to 0.80% for 2023 due to the higher
−Removed: interest rate environment during the year before the Federal Reserve rate cuts.
−Removed: The Company had no brokered deposits at December 31, 2024.
+Added: Company reduced interest rates during the last four months of 2024 when the FOMC cut interest rates by 100 basis points between September and December 2024 and then another 75 basis points when the FOMC cut interest rates again, between September
+Added: 2025 and December 2025.
+Added: The average cost of total deposits, including non-interest bearing deposits, decreased to 1.22% for 2025 compared to 1.35% for 2024.
+Added: The Company had no brokered deposits as of December 31, 2025 or 2024.
The following table shows deposits with a balance greater than $250,000 at December 31, 2025 and 2024:
28 unchanged sentences
These securities accrue interest at a variable rate based upon 3-month SOFR plus 2.85%.
−Removed: Interest rates reset quarterly (the next reset is March 17, 2025) and the rate was 7.35% as of December 31, 2024.
+Added: Interest rates reset quarterly and the rate was 6.82% at December 31, 2025 (the next reset is March 17, 2026).
rate paid for these securities was 7.44% in 2025 and 8.45% in 2024.
6 unchanged sentences
Shareholders’ equity totaled $645.5 million at December 31, 2025, and $573.1 million at the end of 2024, an increase of $72.4 million or 12.64%.
+Added: The growth in capital during the year ended
+Added: December 31, 2025 was driven by net income of $93.6 million partially offset by stock repurchases of $34.7 million and cash dividends paid on common shares of $13.8 million.
The Company and the Bank are subject to various regulatory capital adequacy guidelines as outlined under Part 324 of the FDIC Rules and Regulations.
4 unchanged sentences
Company and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
−Removed: As of December 31, 2024, the Company was in compliance with all of these capital requirements and there were no restrictions on the Company’s business activity.
−Removed: As of December 31, 2024 the Bank met the requirements
−Removed: to be categorized as “well-capitalized” under the FDIC regulatory framework for prompt corrective action.
−Removed: To be categorized as “well-capitalized,” the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as
−Removed: set forth in the following tables as of December 31, 2024 and 2023.
+Added: At December 31, 2025, the Company was in compliance with all of these capital requirements and there were no restrictions on the Company’s business activity.
+Added: At December 31, 2025 the Bank met the requirements to be
+Added: categorized as “well-capitalized” under the FDIC regulatory framework for prompt corrective action.
+Added: To be categorized as “well-capitalized,” the Bank must maintain minimum Total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set
+Added: forth in the following tables at December 31, 2025 and 2024.
The Company’s and the Bank’s actual and required capital amounts and ratios are as follows:
December 31, 2025
−Removed: Required for Capital Adequacy Purposes
−Removed: Minimum to be Categorized as
−Removed: "Well Capitalized" Under
+Added: Required for Capital
+Added: Adequacy Purposes
+Added: Minimum to be Categorized
+Added: as "Well Capitalized" Under
Prompt Corrective Action
(Dollars in thousands)
+Added: Farmers & Merchants Bancorp
CET1 capital to risk-weighted assets
7 unchanged sentences
December 31, 2024
−Removed: Required for Capital Adequacy Purposes
−Removed: Minimum to be Categorized as
−Removed: "Well Capitalized" Under
+Added: Required for Capital
+Added: Adequacy Purposes
+Added: Minimum to be Categorized
+Added: as "Well Capitalized" Under
Prompt Corrective Action
(Dollars in thousands)
+Added: Farmers & Merchants Bancorp
CET1 capital to risk-weighted assets
8 unchanged sentences
represented approximately 9% of outstanding shareholders’ equity at the time of approval.
−Removed: The new Repurchase Plan extends through December 31, 2026.
−Removed: The Board concurrently terminated the existing $25.0 million repurchase plan previously approved
−Removed: on November 14, 2023.
−Removed: Repurchases by the Company under the Repurchase Plan may be made from time to time at market prices through open market purchases, trading plans established in accordance with SEC rules and privately negotiated
−Removed: transactions.
+Added: On August 14, 2025, the Board of Directors authorized an increase of $45.0 million to the existing share repurchase program along with an extension of the
+Added: program through December 31, 2027.
+Added: Repurchases by the Company under the Repurchase Plan may be made from time to time through open market purchases, trading plans established in accordance with SEC rules, privately negotiated transactions, or by
In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted.
2 unchanged sentences
During 2025, the Company repurchased 33,562 shares under the Repurchase Plan, for a total of $34.7 million, inclusive of the excise tax.
−Removed: The largest repurchase transaction occurred on October 3, 2024, when the
−Removed: Company entered into and executed a Stock Purchase Agreement with the living trust of one of the Company’s largest shareholders under which the Company repurchased 37,990 shares of common stock of the Company at a cost of $34.8 million.
−Removed: time of purchase, this transaction represented the repurchase of 5.15% of the Company’s outstanding shares of common stock.
−Removed: As of December 31, 2024, there remains $19.9 million authorized for repurchases under the new Repurchase Plan.
+Added: At December 31, 2025, there remained $30.3 million authorized for repurchases
+Added: under the Repurchase Plan.
+Added: On August 13, 2025, the Company announced that it changed its dividend policy related to the frequency of cash dividend payments from semi-annually to quarterly.
+Added: The first quarterly cash dividend of $5.00 per share
+Added: was declared on August 12, 2025 and paid on October 1, 2025.
+Added: On November 12, 2025, the Company declared a quarterly cash dividend of $5.05 per share which was paid on January 2, 2026, to shareholders of record on December 4, 2025.
Off-Balance-Sheet Arrangements
6 unchanged sentences
research and development services with the Company.
−Removed: The following table sets forth our off-balance sheet lending commitments as of December 31, 2024:
+Added: The following table sets forth our off-balance sheet lending commitments at December 31, 2025:
Amount of Commitment Expiration per Period
(Dollars in thousands)
−Removed: Total Committed Amount
−Removed: One to Three Years
−Removed: Three to Five Years
−Removed: After Five Years
Off-balance sheet commitments
13 unchanged sentences
Standby letters of credit are conditional commitments issued by the Company to guarantee performance of or payment for a customer to a third-party.
−Removed: Most standby letters of credit have maturity dates ranging from 1
−Removed: to 48 months with final expiration in October 2028.
+Added: Outstanding standby letters of credit at December 31, 2025 had
+Added: maturity dates ranging from 1 to 51 months with 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.
2 unchanged sentences
we actively manage our assets and liabilities.
−Removed: We have access to immediate liquid resources in the form of cash, which totaled $212.6 million or 4.0% of total assets as of December 31, 2024.
+Added: We have access to immediate liquid resources in the form of cash, which totaled $144.9 million or 2.6% of total assets at December 31, 2025.
The majority of cash is on deposit with the FRB and
amounted to $84.2 million.
−Removed: Potential sources of liquidity also include our ability to sell or pledge our available-for-sale securities portfolio, our held-to-maturity portfolio which can be pledged for borrowing purposes, our ability to sell
+Added: Potential sources of liquidity also include our ability to sell or pledge our available-for-sale securities portfolio, our ability to pledge for borrowing purposes our held-to-maturity portfolio, our ability to sell
loans in the secondary market, and our ability to borrow from the FRB and FHLB.
9 unchanged sentences
We had the following borrowing lines available at December 31, 2025:
−Removed: As of December 31, 2024
+Added: December 31, 2025
(Dollars in thousands)
−Removed: Total Credit Line Limit
−Removed: Outstanding Amount
−Removed: Remaining Credit Line Available
−Removed: Value of Collateral Pledged
Additional liquidity sources:
5 unchanged sentences
Total additional liquidity sources
−Removed: We continued our focus on maintaining a strong liquidity position throughout 2024 and we believe our liquid assets and short-term borrowing credit lines are adequate to meet our cash flow needs for loan and lease
−Removed: funding and deposit cash withdrawal for the foreseeable future.
−Removed: As of December 31, 2024, we had internal sources of liquidity comprised of $212.6 million in cash and $465.8 million of unencumbered investment securities, which represented in the
−Removed: aggregate 12.63% of total assets.
−Removed: We also had $2.1 billion in external sources of liquidity as outlined in the table above, bringing our total available liquidity to $2.7 billion.
−Removed: Our pledged collateral on short-term borrowing lines was comprised
−Removed: of $2.5 billion in loans and $1.6 million in investment securities held at market value.
−Removed: We have the option of either borrowing on our credit lines or selling these investment securities for cash flow needs.
+Added: We maintained a strong liquidity position throughout 2025 and we believe our liquid assets and short-term borrowing credit lines are adequate to meet our cash flow needs for loan and
+Added: lease funding and deposit cash withdrawal for the foreseeable future.
+Added: At December 31, 2025, we had internal sources of liquidity comprised of $144.9 million in cash and $945.0 million of unencumbered investment securities, which represented in
+Added: the aggregate 19.15% of total assets.
+Added: We also had $2.1 billion in external sources of liquidity as outlined in the table above, bringing our total available liquidity to $3.2 billion at December 31, 2025.
+Added: Our pledged collateral on short-term
+Added: borrowing lines was comprised of $2.5 billion in loans and $1.4 million in investment securities held at market value at December 31, 2025.
+Added: We have the option of either borrowing on our credit lines or selling these investment securities for cash
On a long-term basis, we can, as needed, meet our liquidity needs by changing the relative distribution of our asset portfolios by reducing our investment or loan and lease volumes, or selling or encumbering
13 unchanged sentences
Net cash used in investing activities was $402.0 million during 2025 driven by a net
−Removed: increase in loans and leases of $24.3 million and activity in our investment portfolio, including purchases of $389.5 million in available-for-sale securities offset by proceeds from the sale, maturities, calls, and pay downs of investment
−Removed: securities of $152.6 million.
−Removed: As of December 31, 2024, we had unfunded loan commitments of $1.0 billion and unfunded letters of credit of $15.4 million.
−Removed: At December 31, 2024, we believe that we had sufficient funds available to meet current loan
−Removed: Net cash used in financing activities totaled $27.2 million in 2024 driven by the repurchase of $45.3 million in common stock, $13.0 million in cash dividends paid to shareholders offset by an increase in deposits
+Added: increase of purchases in our investment portfolio of $564.8 million in available-for-sale securities offset by a decrease in loans and leases of $27.7 million and proceeds from the sale, maturities, calls, and pay downs of investment securities
of $162.8 million.
+Added: At December 31, 2025, we had unfunded loan commitments of $1.0 billion and unfunded letters of credit of $19.3 million.
+Added: At December 31, 2025, we believe that we had sufficient sources of funds available to meet
+Added: current loan commitments.
+Added: Net cash provided by financing activities totaled $230.1 million in 2025, driven by an increase in deposits of $278.7 million partially offset by the repurchase of $34.7 million in common stock and $13.8 million in
+Added: cash dividends paid to shareholders.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.