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) March 31, 2026 December 31, 2025 ASSETS Cash and due from banks $ 66,099 $ 60,622 Interest-bearing deposits with banks 318,125 84,242 Total cash and cash equivalents 384,224 144,864 Securities available-for-sale, amortized cost $ 915,695 and $ 955,203 respectively 901,915 951,154 Securities held-to-maturity, fair value $ 581,514 and $ 592,736 , respectively 708,273 718,641 Allowance for credit losses - securities held-to-maturity ( 450 ) ( 450 ) Total investment securities 1,609,738 1,669,345 Non-marketable securities 15,549 15,549 Loans and leases held for investment, net of unearned income 3,616,871 3,648,945 Allowance for credit losses - loans and leases ( 76,918 ) ( 76,375 ) Loans held for investment, net 3,539,953 3,572,570 Bank-owned life insurance 77,252 76,614 Premises and equipment, net 64,571 55,847 Deferred income tax assets and income taxes receivevable 34,745 38,775 Accrued interest receivable 25,344 29,996 Goodwill 11,183 11,183 Other intangibles 1,044 1,165 Other assets 73,061 74,202 Total Assets $ 5,836,664 $ 5,690,110 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits: Non-interest bearing $ 1,615,425 $ 1,642,119 Interest-bearing: Demand 785,612 802,352 Savings and money market 1,916,012 1,790,274 Certificates of deposit 799,224 743,081 Total interest-bearing 3,500,848 3,335,707 Total deposits 5,116,273 4,977,826 Subordinated debentures 10,310 10,310 Interest payable and other liabilities 54,026 56,460 Total Liabilities 5,180,609 5,044,596 COMMITMENTS AND CONTINGENCIES (Note 11) 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, 723,880 and 728,560 issued and 693,043 and 697,904 outstanding at March 31, 2026 and December 31, 2025, respectively 7 7 Additional paid-in capital 8,765 11,550 Retained earnings 689,638 669,262 Accumulated other comprehensive loss, net of taxes ( 10,360 ) ( 3,512 ) Treasury stock, at cost; 30,837 shares at March 31, 2026 and 30,656 shares at December 31, 2025 ( 31,995 ) ( 31,793 ) TOTAL SHAREHOLDERS’ EQUITY 656,055 645,514 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 5,836,664 $ 5,690,110 See accompanying notes to the unaudited consolidated financial statements. 3 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, (Dollars in thousands, except share and per share amounts) 2026 2025 Interest income Interest and fees on loans and leases $ 54,682 $ 54,035 Interest and dividends on investment securities 15,744 10,462 Interest on deposits with others 1,284 2,641 Total interest income 71,710 67,138 Interest expense Deposits 14,631 13,805 Subordinated debentures 176 192 Total interest expense 14,807 13,997 Net interest income 56,903 53,141 Provision for credit losses 500 300 Net interest income after provision for credit losses 56,403 52,841 Non-interest income Card processing 1,734 1,667 Service charges on deposit accounts 819 772 Increase in cash surrender value of BOLI 638 603 Net gain on deferred compensation benefits - 833 Other 1,968 1,146 Total non-interest income 5,159 5,021 Non-interest expense Salaries and employee benefits 20,433 17,144 Data processing 1,864 1,638 Occupancy 1,243 1,302 Deposit insurance 840 748 Professional services 1,139 922 Marketing 578 467 Net gain on deferred compensation benefits - 833 Other 3,081 2,455 Total non-interest expense 29,178 25,509 INCOME BEFORE INCOME TAXES 32,384 32,353 Income tax expense 8,313 9,344 NET INCOME $ 24,071 $ 23,009 Earnings per common share: Basic $ 35.91 $ 32.88 Diluted $ 35.34 $ 32.86 Weighted average number of common shares Basic 670,265 699,736 Diluted 681,179 700,215 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 March 31, (Dollars in thousands) 2026 2025 Net income $ 24,071 $ 23,009 Other comprehensive income Unrealized (losses)/gains on available-for-sale securities ( 9,731 ) 6,959 Amortization of unrecognized gains/(loss) on securities transferred to held-to-maturity 9 ( 11 ) Net unrealized (losses)/gains on securities ( 9,722 ) 6,948 Income tax benefit/(expense) 2,874 ( 2,054 ) Other comprehensive (loss)/income, net of tax ( 6,848 ) 4,894 Total comprehensive income $ 17,223 $ 27,903 See accompanying notes to the unaudited consolidated financial statements. 5 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Dollars in thousands, except share and per 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 - - - 23,009 - - - 23,009 Other comprehensive income, net of tax - - - - 4,894 - - 4,894 Issuance of restricted stock awards 30,818 - - - - - - - Stock based compensation expense - - 2,042 - - - - 2,042 Repurchase of common stock ( 703 ) - - ( 711 ) - - - ( 711 ) Balance as of March 31, 2025 729,913 $ 7 $ 2,042 $ 614,729 $ ( 14,472 ) $ - $ - $ 602,306 Balance as of December 31, 2025 728,560 $ 7 $ 11,550 $ 669,262 $ ( 3,512 ) ( 30,656 ) $ ( 31,793 ) $ 645,514 Net income - - - 24,071 - - - 24,071 Other comprehensive loss, net of tax - - - - ( 6,848 ) - - ( 6,848 ) Issuance of restricted stock awards 1,168 - - - - - - - Restricted stock surrendered for tax withholdings upon vesting ( 5,470 ) - ( 6,303 ) - - - - ( 6,303 ) Forfeiture of restricted stock awards ( 378 ) - - - - - - - Stock based compensation expense - - 3,518 - - - - 3,518 Cash dividends declared ($ 5.10 per share) - - - ( 3,695 ) - - - ( 3,695 ) Purchase of treasury stock - - - - - ( 181 ) ( 202 ) ( 202 ) Balance as of March 31, 2026 723,880 $ 7 $ 8,765 $ 689,638 $ ( 10,360 ) ( 30,837 ) $ ( 31,995 ) $ 656,055 See accompanying notes to the unaudited consolidated financial statements. 6 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF C ASH FLOWS (Unaudited) Three Months Ended March 31, (Dollars in thousands) 2026 2025 Cash flows from operating activities: Net income $ 24,071 $ 23,009 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 500 300 Depreciation and amortization 756 763 Net accretion of securities premiums and discounts ( 1,025 ) ( 276 ) Stock based compensation expense 3,518 2,042 Increase in cash surrender value of BOLI ( 638 ) ( 603 ) Decrease in deferred income taxes, net 3,300 6,959 Net changes in: Other assets 10,124 3,935 Other liabilities 110 3,421 Net cash provided by operating activities 40,716 39,550 Cash flows from investing activities: Net decrease in loans and leases held for investment 32,158 94,058 Purchase of available-for-sale securities - ( 33,186 ) Purchase of held-to-maturity securities ( 1,050 ) ( 1,945 ) Proceeds from sales, maturities, calls and pay downs of available-for-sale securities 40,499 9,274 Proceeds from maturities, calls and pay downs of held-to-maturity securities 11,430 11,489 Purchase of premises and equipment ( 9,535 ) ( 673 ) Purchase of other investments ( 3,135 ) ( 2,047 ) Proceeds from sale of assets - 53 Net cash provided by investing activities 70,367 77,023 Cash flows from financing activities: Net increase in deposits 138,447 278,829 Cash dividends paid ( 3,665 ) - Restricted stock vesting distribution ( 6,303 ) - Cash used in share repurchase program - ( 711 ) Purchase of treasury stock ( 202 ) - Net cash provided by financing activities 128,277 278,118 Net change in cash and cash equivalents 239,360 394,691 Cash and cash equivalents, beginning of period 144,864 212,563 Cash and cash equivalents, end of period $ 384,224 $ 607,254 Supplemental disclosures of cash flow information: Cash paid for interest $ 16,121 $ 15,109 Income taxes paid $ - $ 1,234 Supplemental disclosures of non-cash transactions: Accrued cash dividend on restricted stock $ ( 30 ) $ - Net change in unrealized gains/(losses) on securities available-for-sale $ 9,731 $ ( 6,959 ) 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 one accounting policy that, due to the judgments, estimates and assumptions inherent in this policy, is significant to an understanding of the Bank’s financial statements. This policy relates to the determination of the allowance for credit losses on loans and leases held for investment. This policy and the related 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, 2025 filed with the SEC on March 13, 2026 (“2025 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 2025 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 2025 Form 10-K. As of March 31, 2026, there were no significant changes to accounting policies from those disclosed in our audited consolidated financial statements included in our 2025 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 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”). ASU 2025-05 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 adopted this new guidance on January 1, 2026 and there was no material impact on its consolidated financial statements. 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, but does not expect the impact to be material . In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements” (“ASU 2025-11”). ASU 2025-11 clarifies and improves the guidance for interim financial reporting by providing a list of required interim disclosures, clarifying the applicability of interim reporting requirements, and introducing a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance is effective for the Company starting January 1, 2029, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its financial presentation. In December 2025, the FASB issued ASU No. 2025-12, “Codification Improvements” (“ASU 2025-12”). ASU 2025-12 is part of the FASB’s standing “evergreen” project and makes a broad set of technical corrections, clarifications, and other minor improvements across many Topics to make the Codification easier to understand and apply. The amendments will be effective for the Company beginning with the fiscal year ending December 31, 2027, and interim periods within that fiscal year. The Company is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures. 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: Gross Unrealized (Dollars in thousands) Amortized Cost Gains Losses Fair Value As of March 31, 2026 U.S. Government-sponsored securities $ 1,944 $ 4 $ 8 $ 1,940 Mortgage-backed securities (1) 795,244 4,078 19,694 779,628 Commercial mortgage-backed obligations (1) 1,232 19 - 1,251 Collateralized mortgage obligations (1) 20,812 - 493 20,319 Municipal securities 66,548 2,262 19 68,791 Corporate securities 29,605 117 46 29,676 Other 310 - - 310 Total available-for-sale securities $ 915,695 $ 6,480 $ 20,260 $ 901,915 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. Gross Unrealized (Dollars in thousands) Amortized Cost Gains Losses Fair Value As of December 31, 2025 U.S. Government-sponsored securities $ 2,046 $ 2 $ 10 $ 2,038 Mortgage-backed securities (1) 834,820 9,140 17,720 826,240 Commercial mortgage-backed obligations (1) 1,231 22 - 1,253 Collateralized mortgage obligations (1) 21,087 5 362 20,730 Municipal securities 66,142 4,703 - 70,845 Corporate securities 29,567 171 - 29,738 Other 310 - - 310 Total available-for-sale securities $ 955,203 $ 14,043 $ 18,092 $ 951,154 (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: Allowance Amortized Gross Unrecognized for Credit (Dollars in thousands) Cost Gains Losses Fair Value Losses As of March 31, 2026 Mortgage-backed securities (1) $ 577,812 $ 48 $ 116,105 $ 461,755 $ - Collateralized mortgage obligations (1) 60,972 - 10,576 50,396 - Municipal securities 69,489 927 1,053 69,363 450 Total held-to-maturity securities $ 708,273 $ 975 $ 127,734 $ 581,514 $ 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 Allowance Amortized Gross Unrecognized for Credit (Dollars in thousands) Cost Gains Losses Fair Value Losses As of December 31, 2025 Mortgage-backed securities (1) $ 586,001 $ 88 $ 115,773 $ 470,316 $ - Collateralized mortgage obligations (1) 62,476 - 10,234 52,242 - Municipal securities 70,164 1,011 997 70,178 450 Total held-to-maturity securities $ 718,641 $ 1,099 $ 127,004 $ 592,736 $ 450 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 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. 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: March 31, 2026 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 $ 359 $ 1 $ 563 $ 7 $ 922 $ 8 Mortgage-backed securities (1) 418,622 2,277 67,673 17,417 486,295 19,694 Collateralized mortgage obligations (1) 14,911 269 5,408 224 20,319 493 Municipal securities 3,980 19 - - 3,980 19 Corporate securities 9,689 46 - - 9,689 46 Total available-for-sale securities $ 447,561 $ 2,612 $ 73,644 $ 17,648 $ 521,205 $ 20,260 (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, 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 $ 461 $ 2 $ 676 $ 8 $ 1,137 $ 10 Mortgage-backed securities (1) 60,935 244 75,647 17,476 136,582 17,720 Collateralized mortgage obligations (1) 13,262 230 5,511 132 18,773 362 Total available-for-sale securities $ 74,658 $ 476 $ 81,834 $ 17,616 $ 156,492 $ 18,092 (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 March 31, 2026, the Company held 323 available-for-sale securities of which 55 securities were in an unrealized loss position for less than twelve months and 99 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: March 31, 2026 (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, 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 The amortized cost and estimated fair values of investment securities at March 31, 2026 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 $ 10,659 $ 10,673 $ 2,108 $ 2,107 After one year through five years 20,371 20,417 18,044 17,977 After five years through ten years 44,050 44,698 17,983 17,196 After ten years 840,615 826,127 670,138 544,234 Total $ 915,695 $ 901,915 $ 708,273 $ 581,514 Maturities are based on the final contractual payment dates, and do not reflect the impact of contractual monthly principal payments, 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 March 31, 2026, 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 March 31, 2026 Municipal securities $ 18,414 $ 937 $ 50,138 $ 69,489 Total $ 18,414 $ 937 $ 50,138 $ 69,489 Held-to-Maturity Amortized Cost (Dollars in thousands) AAA/AA/A BBB/BB/B Not Rated Total December 31, 2025 Municipal securities $ 18,562 $ 935 $ 50,667 $ 70,164 Total $ 18,562 $ 935 $ 50,667 $ 70,164 Proceeds from sales and calls of investment securities were as follows: For the Three Months Ended March 31, (Dollars in thousands) 2026 2025 Gross proceeds $ - $ 160 Gross gains - - Gross losses - - Pledged Securities At March 31, 2026, investment securities carried at $ 731.0 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 $ 673.8 million at December 31, 2025. 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) March 31, 2026 December 31, 2025 Loans and leases held for investment, net Real estate: Commercial $ 1,504,452 $ 1,480,906 Agricultural 689,981 705,668 Residential and home equity 403,777 405,080 Construction 132,487 128,179 Total real estate 2,730,697 2,719,833 Commercial & industrial 462,196 497,700 Agricultural 261,279 264,117 Commercial leases 175,744 181,004 Consumer and other 4,640 4,671 Total gross loans and leases 3,634,556 3,667,325 Unearned income ( 17,685 ) ( 18,380 ) Total net loans and leases 3,616,871 3,648,945 Allowance for credit losses ( 76,918 ) ( 76,375 ) Total loans and leases held for investment, net $ 3,539,953 $ 3,572,570 At March 31, 2026, the portion of loans that were approved for pledging as collateral on borrowing lines with the FHLB and the Federal Reserve Bank (“FRB”) were $ 1.4 billion and $ 1.4 billion, respectively. The borrowing capacity on these loans was $ 932.4 million from FHLB and $ 1.1 billion from the FRB at March 31, 2026. 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: March 31, 2026 (Dollars in thousands) 30-89 Days Past Due 90+ Days Past Due Non-accrual Total Past Due and Nonaccrual Current Total Non-accrual with no ACL Loans and leases held for investment, net Real estate: Commercial $ - $ - $ 730 $ 730 $ 1,495,765 $ 1,496,495 $ 730 Agricultural - 3,266 - 3,266 686,715 689,981 - Residential and home equity - - - - 403,777 403,777 - Construction - - - - 132,487 132,487 - Total real estate - 3,266 730 3,996 2,718,744 2,722,740 730 Commercial & industrial - - - - 462,196 462,196 - Agricultural - - - - 261,279 261,279 - Commercial leases - - - - 166,016 166,016 - Consumer and other 10 - - 10 4,630 4,640 - Total loans and leases, net $ 10 $ 3,266 $ 730 $ 4,006 $ 3,612,865 $ 3,616,871 $ 730 14 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2025 (Dollars in thousands) 30-89 Days Past Due 90+ Days Past Due Non-accrual Total Past Due and Nonaccrual Current Total Non-accrual with no ACL Loans and leases held for investment, net Real estate: Commercial $ 7,248 $ - $ 750 $ 7,998 $ 1,464,585 $ 1,472,583 $ 750 Agricultural - - - - 705,668 705,668 - Residential and home equity - - - - 405,080 405,080 - Construction - - - - 128,179 128,179 - Total real estate 7,248 - 750 7,998 2,703,512 2,711,510 750 Commercial & industrial - - - - 497,700 497,700 - Agricultural - - - - 264,117 264,117 - Commercial leases 1,659 - - 1,659 169,288 170,947 - Consumer and other 5 - - 5 4,666 4,671 - Total loans and leases, net $ 8,912 $ - $ 750 $ 9,662 $ 3,639,283 $ 3,648,945 $ 750 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 customers. 15 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued The following table presents 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: March 31, 2026 Amortized cost associated with the following modification types: (Dollars in thousands) Maturity or term extension Payment reduction Multiple modification types 1 Total 2 Percentage of total loan segment Loans and leases held for investment, net Real estate: Commercial $ - $ 730 $ - $ 730 0.05 % Agricultural - - - - 0.00 % Residential and home equity - - 37 37 0.01 % Construction - - - - 0.00 % Total real estate - 730 37 767 0.03 % Commercial & industrial 4,170 - - 4,170 0.90 % Agricultural - - - - 0.00 % Commercial leases - - - - 0.00 % Consumer and other - - - - 0.00 % Total $ 4,170 $ 730 $ 37 $ 4,937 0.14 % 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 at March 31, 2026. During the three months ended March 31, 2026, the Company modified one commercial real estate loan with a monthly payment reduction, two commercial and industrial loans with contractual term extensions of four and three months and one residential loan with an interest rate reduction and a contractual term extension of ten years . March 31, 2025 Amortized cost associated with the following modification types: (Dollars in thousands) Maturity or term extension 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 0.36 % Residential and home equity - - - - 0.00 % Construction - - - - 0.00 % Total real estate 983 - 1,656 2,639 0.10 % Commercial & industrial - - - - 0.00 % Agricultural 43 - - 43 0.02 % Commercial leases - - - - 0.00 % Consumer and other - - - - 0.00 % Total $ 1,026 $ - $ 1,656 $ 2,682 0.07 % 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 at March 31, 2025. 16 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued During the three months ended March 31, 2025, the Company modified one agricultural borrower with four agricultural real estate loans and one agricultural production loan. 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 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 12 months that had a payment default and was past due during the three months ended March 31, 2026. 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. 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. 17 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued 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: March 31, 2026 Term Loans Amortized Cost Basis by Origination Year (Dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Real estate: Commercial Pass $ 28,119 $ 211,127 $ 37,793 $ 100,013 $ 134,184 $ 532,706 $ 308,217 $ 143,381 $ 1,495,540 Special mention - 225 - - - - - - 225 Substandard - - - - 730 - - - 730 Total Commercial $ 28,119 $ 211,352 $ 37,793 $ 100,013 $ 134,914 $ 532,706 $ 308,217 $ 143,381 $ 1,496,495 Commercial Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Agricultural Pass $ 897 $ 45,684 $ 23,762 $ 33,334 $ 61,256 $ 192,470 $ 272,571 $ 49,622 $ 679,596 Special mention - 3,143 - - - 3,029 4,213 - 10,385 Substandard - - - - - - - - - Total Agricultural $ 897 $ 48,827 $ 23,762 $ 33,334 $ 61,256 $ 195,499 $ 276,784 $ 49,622 $ 689,981 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Residential and home equity Pass $ 7,946 $ 35,369 $ 27,823 $ 29,445 $ 50,307 $ 200,024 $ 52,089 $ 344 $ 403,347 Special mention - - - - - 25 - - 25 Substandard - - - - - 203 202 - 405 Total Residential and home equity $ 7,946 $ 35,369 $ 27,823 $ 29,445 $ 50,307 $ 200,252 $ 52,291 $ 344 $ 403,777 Residential and home equity Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction Pass $ - $ - $ - $ - $ - $ 1,375 $ 117,212 $ 13,900 $ 132,487 Special mention - - - - - - - - - Substandard - - - - - - - - - Total construction $ - $ - $ - $ - $ - $ 1,375 $ 117,212 $ 13,900 $ 132,487 Construction Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Real estate $ 36,962 $ 295,548 $ 89,378 $ 162,792 $ 246,477 $ 929,832 $ 754,504 $ 207,247 $ 2,722,740 Commercial & industrial Pass $ 1,691 $ 38,518 $ 16,266 $ 27,974 $ 15,494 $ 17,236 $ 312,178 $ 28,588 $ 457,945 Special mention - - - - 33 - 48 4,170 4,251 Substandard - - - - - - - - - Total Commercial & industrial $ 1,691 $ 38,518 $ 16,266 $ 27,974 $ 15,527 $ 17,236 $ 312,226 $ 32,758 $ 462,196 Commercial & industrial Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - 18 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued March 31, 2026 Term Loans Amortized Cost Basis by Origination Year (Dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Amortized Cost Revolving Loans Converted to Term Total Net loans and leases held for investment Agricultural Pass $ - $ 301 $ 2,688 $ 2,178 $ 1,621 $ 2,947 $ 241,017 $ 10,457 $ 261,209 Special mention - - - - 27 - - 43 70 Substandard - - - - - - - - - Total Agricultural $ - $ 301 $ 2,688 $ 2,178 $ 1,648 $ 2,947 $ 241,017 $ 10,500 $ 261,279 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial leases Pass $ 637 $ 24,854 $ 28,241 $ 65,506 $ 20,832 $ 25,946 $ - $ - $ 166,016 Special mention - - - - - - - - - Substandard - - - - - - - - - Total Commercial leases $ 637 $ 24,854 $ 28,241 $ 65,506 $ 20,832 $ 25,946 $ - $ - $ 166,016 Commercial leases Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer and other Pass $ 515 $ 1,178 $ 365 $ 485 $ 211 $ 935 $ 769 $ - $ 4,458 Special mention - - - - - - - - - Substandard 173 - - - - 9 - - 182 Total Consumer and other $ 688 $ 1,178 $ 365 $ 485 $ 211 $ 944 $ 769 $ - $ 4,640 Consumer and other Current-period gross charge-offs $ 8 $ - $ - $ - $ - $ - $ - $ - $ 8 Total net loans and leases Pass $ 39,805 $ 357,031 $ 136,938 $ 258,935 $ 283,905 $ 973,639 $ 1,304,053 $ 246,292 $ 3,600,598 Special mention - 3,368 - - 60 3,054 4,261 4,213 14,956 Substandard 173 - - - 730 212 202 - 1,317 Total net loans and leases $ 39,978 $ 360,399 $ 136,938 $ 258,935 $ 284,695 $ 976,905 $ 1,308,516 $ 250,505 $ 3,616,871 Total current-period gross charge-offs $ 8 $ - $ - $ - $ - $ - $ - $ - $ 8 19 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2025 Term Loans 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 $ 201,486 $ 38,557 $ 103,052 $ 135,472 $ 192,814 $ 356,496 $ 290,112 $ 146,371 $ 1,464,360 Special mention 225 - - - 7,248 - - - 7,473 Substandard - - - 750 - - - - 750 Total Commercial $ 201,711 $ 38,557 $ 103,052 $ 136,222 $ 200,062 $ 356,496 $ 290,112 $ 146,371 $ 1,472,583 Commercial Current-period gross charge-offs $ - $ - $ - $ 380 $ - $ - $ - $ - $ 380 Agricultural Pass $ 46,027 $ 23,735 $ 35,874 $ 62,515 $ 41,110 $ 161,982 $ 274,736 $ 48,493 $ 694,472 Special mention 3,151 - - - - 3,085 4,960 - 11,196 Substandard - - - - - - - - - Total Agricultural $ 49,178 $ 23,735 $ 35,874 $ 62,515 $ 41,110 $ 165,067 $ 279,696 $ 48,493 $ 705,668 Agricultural Current-period gross charge-offs $ - $ - $ 180 $ 939 $ - $ - $ - $ - $ 1,119 Residential and home equity Pass $ 35,670 $ 29,212 $ 31,874 $ 50,922 $ 76,178 $ 128,370 $ 52,266 $ 352 $ 404,844 Special mention - - - - - 34 - - 34 Substandard - - - - - - 202 - 202 Total Residential and home equity $ 35,670 $ 29,212 $ 31,874 $ 50,922 $ 76,178 $ 128,404 $ 52,468 $ 352 $ 405,080 Residential and home equity Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction Pass $ - $ - $ - $ - $ - $ 1,375 $ 112,904 $ 13,900 $ 128,179 Special mention - - - - - - - - - Substandard - - - - - - - - - Total construction $ - $ - $ - $ - $ - $ 1,375 $ 112,904 $ 13,900 $ 128,179 Construction Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Real estate $ 286,559 $ 91,504 $ 170,800 $ 249,659 $ 317,350 $ 651,342 $ 735,180 $ 209,116 $ 2,711,510 Commercial & industrial Pass $ 39,666 $ 21,289 $ 29,692 $ 16,244 $ 13,167 $ 5,310 $ 337,525 $ 30,455 $ 493,348 Special mention - - - 40 - - 50 4,262 4,352 Substandard - - - - - - - - - Total Commercial & industrial $ 39,666 $ 21,289 $ 29,692 $ 16,284 $ 13,167 $ 5,310 $ 337,575 $ 34,717 $ 497,700 Commercial & industrial Current-period gross charge-offs $ - $ - $ 70 $ 98 $ 53 $ 12 $ - $ - $ 233 20 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued December 31, 2025 Term Loans 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 $ 3,104 $ 2,857 $ 2,312 $ 1,772 $ 1,020 $ 2,264 $ 245,438 $ 5,278 $ 264,045 Special mention - - - 29 - - - 43 72 Substandard - - - - - - - - - Total Agricultural $ 3,104 $ 2,857 $ 2,312 $ 1,801 $ 1,020 $ 2,264 $ 245,438 $ 5,321 $ 264,117 Agricultural Current-period gross charge-offs $ - $ - $ - $ 200 $ 34 $ - $ - $ - $ 234 Commercial leases Pass $ 25,516 $ 29,201 $ 67,198 $ 21,749 $ 5,854 $ 21,429 $ - $ - $ 170,947 Special mention - - - - - - - - - Substandard - - - - - - - - - Total Commercial leases $ 25,516 $ 29,201 $ 67,198 $ 21,749 $ 5,854 $ 21,429 $ - $ - $ 170,947 Commercial leases Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer and other Pass $ 1,244 $ 478 $ 609 $ 234 $ 23 $ 1,001 $ 879 $ - $ 4,468 Special mention - - - - - - - - - Substandard 192 - - - - 11 - - 203 Total Consumer and other $ 1,436 $ 478 $ 609 $ 234 $ 23 $ 1,012 $ 879 $ - $ 4,671 Consumer and other Current-period gross charge-offs $ 37 $ 3 $ - $ - $ - $ 10 $ - $ - $ 50 Total net loans and leases Pass $ 352,713 $ 145,329 $ 270,611 $ 288,908 $ 330,166 $ 678,227 $ 1,313,860 $ 244,849 $ 3,624,663 Special mention 3,376 - - 69 7,248 3,119 5,010 4,305 23,127 Substandard 192 - - 750 - 11 202 - 1,155 Total net loans and leases $ 356,281 $ 145,329 $ 270,611 $ 289,727 $ 337,414 $ 681,357 $ 1,319,072 $ 249,154 $ 3,648,945 Total current-period gross charge-offs $ 37 $ 3 $ 250 $ 1,617 $ 87 $ 22 $ - $ - $ 2,016 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: March 31, December 31, (Dollars in thousands) 2026 2025 Balance at beginning of the period $ 13,300 $ 15,626 New loans or advances during year 385 495 Effect of changes in composition of related parties - ( 80 ) Repayments ( 15 ) ( 2,741 ) Balance at end of period $ 13,670 $ 13,300 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 the dates indicated: March 31, 2026 (Dollars in thousands) Real Estate Total Collateral dependent loans and leases Real estate: Commercial $ 730 $ 730 Agricultural - - Residential and home equity - - Construction - - Total real estate 730 730 Commercial & industrial - - Agricultural - - Commercial leases - - Consumer and other - - Total gross loans and leases $ 730 $ 730 December 31, 2025 (Dollars in thousands) Real Estate Total Collateral dependent loans and leases Real estate: Commercial $ 7,998 $ 7,998 Agricultural - - Residential and home equity - - Construction - - Total real estate 7,998 7,998 Commercial & industrial - - Agricultural - - Commercial leases - - Consumer and other - - Total gross loans and leases $ 7,998 $ 7,998 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 table present a summary of the activity in the ACL for loan and lease losses and the ACL for unfunded loan commitments for the periods indicated: For the Three Months Ended March 31, 2026 2025 (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 $ 76,375 $ 3,300 $ 79,675 $ 75,283 $ 2,690 $ 77,973 Provision for credit losses 500 - 500 300 - 300 Charge-offs ( 8 ) - ( 8 ) ( 273 ) - ( 273 ) Recoveries 51 - 51 113 - 113 Net recoveries/(charge-offs) 43 - 43 ( 160 ) - ( 160 ) Balance at end of period $ 76,918 $ 3,300 $ 80,218 $ 75,423 $ 2,690 $ 78,113 Changes in the ACL on loans and leases for the periods indicated are as follows: Three Months Ended March 31, 2026 (Dollars in thousands) Balance at beginning of year Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 22,574 $ ( 639 ) $ - $ - $ 21,935 Agricultural 23,647 ( 1,166 ) - - 22,481 Residential and home equity 7,620 ( 164 ) - 24 7,480 Construction 2,311 535 - - 2,846 Total real estate 56,152 ( 1,434 ) - 24 54,742 Commercial & industrial 7,355 1,733 - 12 9,100 Agricultural 6,760 412 - 1 7,173 Commercial leases 5,861 ( 179 ) - - 5,682 Consumer and other 247 ( 32 ) ( 8 ) 14 221 Total allowance for credit losses $ 76,375 $ 500 $ ( 8 ) $ 51 $ 76,918 23 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued Year Ended December 31, 2025 (Dollars in thousands) Balance at beginning of year Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of year Allowance for credit losses: Real estate: Commercial $ 20,382 $ 2,572 $ ( 380 ) $ - $ 22,574 Agricultural 23,615 1,146 ( 1,119 ) 5 23,647 Residential and home equity 7,340 270 - 10 7,620 Construction 3,055 ( 744 ) - - 2,311 Total real estate 54,392 3,244 ( 1,499 ) 15 56,152 Commercial & industrial 7,791 ( 359 ) ( 233 ) 156 7,355 Agricultural 6,725 245 ( 234 ) 24 6,760 Commercial leases 6,153 ( 292 ) - - 5,861 Consumer and other 222 52 ( 50 ) 23 247 Total allowance for credit losses $ 75,283 $ 2,890 $ ( 2,016 ) $ 218 $ 76,375 Note 4—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) March 31, 2026 December 31, 2025 Certificates of deposit: Certificates of deposit less than or equal to $250,000 $ 345,331 $ 344,818 Certificates of deposit greater than $250,000 453,893 398,263 Total certificates of deposit $ 799,224 $ 743,081 Scheduled maturities for certificates of deposit are as follows for the years ending December 31: (Dollars in thousands) Amount 2026 $ 723,183 2027 72,190 2028 2,103 2029 1,273 2030 345 Thereafter 130 Total certificates of deposit $ 799,224 Overdrawn deposit balances of $ 164,000 and $ 187,000 were classified as consumer loans at March 31, 2026 and December 31, 2025, respectively. 24 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 5—Short-term borrowings As of March 31, 2026 and December 31, 2025, committed lines of credit arrangements totaling $ 2.2 billion and $ 2.1 billion, respectively, 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 borrowing capacity and a committed credit line of $ 933.6 million, which is secured by $ 1.2 billion in various real estate loans and 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 3.96 % as of March 31, 2026. The Company has $ 1.4 billion in pledged loans with the FRB. As of March 31, 2026, the Company’s overnight borrowing capacity using the primary credit facilities from the Fed account was $ 1.1 billion. The borrowing rate was 3.64 % as of March 31, 2026. The Company has an unsecured borrowing capacity from unaffiliated banks of $ 133.0 million as of March 31, 2026. There were no outstanding advances on the above borrowing facilities as of March 31, 2026 or December 31, 2025. Note 6—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. 25 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 6—Fair Value—Continued 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. Securities classified as held-to-maturity are reported at fair value on a non-recurring basis utilizing Level 1, 2 and 3 inputs. Level 3 - Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. 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, 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. 26 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 6—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. March 31, 2026 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 $ 1,940 $ - $ 1,940 $ - $ 1,940 Mortgage-backed securities 779,628 - 779,628 - 779,628 Commercial mortgage-backed securities 1,251 - 1,251 - 1,251 Collateralized mortgage obligations 20,319 - 20,319 - 20,319 Municipal securities 68,791 - 68,791 - 68,791 Corporate securities 29,676 - 29,676 - 29,676 Other 310 - 310 - 310 Other equity investments $ 3,506 $ 3,506 $ - $ - $ 3,506 Derivatives not designated as hedging instruments $ 116 $ - $ 116 $ - $ 116 Financial liabilities Derivatives not designated as hedging instruments $ 124 $ - $ 124 $ - $ 124 December 31, 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 $ 2,038 $ - $ 2,038 $ - $ 2,038 Mortgage-backed securities 826,240 - 826,240 - 826,240 Commercial mortgage-backed securities 1,253 - 1,253 - 1,253 Collateralized mortgage obligations 20,730 - 20,730 - 20,730 Municipal securities 70,845 - 70,845 - 70,845 Corporate securities 29,738 - 29,738 - 29,738 Other 310 - 310 - 310 Other equity investments $ 3,256 $ 3,256 $ - $ - $ 3,256 Derivatives not designated as hedging instruments $ 172 $ - $ 172 $ - $ 172 Financial liabilities Derivatives not designated as hedging instruments $ 178 $ - $ 178 $ - $ 178 Fair valued on a non-recurring basis: Collateral dependent loans $ 7,998 $ - $ - $ 7,998 $ 7,998 27 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 6—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. March 31, 2026 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Financial assets: Cash and cash equivalents $ 384,224 $ 384,224 $ - $ - $ 384,224 Held-to-maturity securities, net 707,823 - 531,523 49,991 581,514 Non-marketable securities, at cost 15,549 - 15,549 - 15,549 Loans and leases, net 3,539,953 - - 3,568,049 3,568,049 Financial liabilities: Total deposits $ 5,116,273 $ - $ 5,113,421 $ - $ 5,113,421 Subordinated debentures 10,310 - 10,712 - 10,712 December 31, 2025 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Financial assets: Cash and cash equivalents $ 144,864 $ 144,864 $ - $ - $ 144,864 Held-to-maturity securities, net 718,191 - 542,161 50,575 592,736 Non-marketable securities, at cost 15,549 - 15,549 - 15,549 Loans and leases, net 3,572,570 - - 3,591,336 3,591,336 Financial liabilities: Total deposits $ 4,977,826 $ - $ 4,975,673 $ - $ 4,975,673 Subordinated debentures 10,310 - 10,810 - 10,810 Non-marketable securities include FHLB stock, Pacific Coast Bankers’ Bank 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. 28 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—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. There were no outstanding restricted stock awards prior to 2025. Shares are excluded from the computations of diluted earnings per share when their inclusion has an anti-dilutive effect. For the three months ended March 31, 2026, there were no potential common shares that were anti-dilutive. The following table presents the factors used in the earnings per share computation for the periods indicated: Three Months Ended March 31, (Dollars in thousands, except per share amounts) 2026 2025 Net income $ 24,071 $ 23,009 Weighted average common shares outstanding For basic earnings per common share 670,265 699,736 Dilutive potential common shares 10,914 479 Shares used in computing diluted earnings per common share 681,179 700,215 Basic earnings per share $ 35.91 $ 32.88 Diluted earnings per share $ 35.34 $ 32.86 Note 8—Employee Benefit Plans Executive Retirement Plan and Senior Management Retirement Plan The Company, through the Bank, sponsored an Executive Retirement Plan for certain executive level employees and a Senior Management Retention Plan for other senior level employees, collectively the “Plans”. Effective November 29, 2024, all components of the Plans were terminated and frozen and no subsequent contributions were made to the Plans. On December 10, 2025, the account balances of the Plans were liquidated and paid out to eligible participants. The Company incurred no expense for the Plans during the three months ended March 31, 2026 and March 31, 2025 due to the freezing of the Plans. The Company’s carrying value of the liability under the Plans for certain participants with different liquidation payout provisions was $ 2.5 million as of March 31, 2026 and $ 2.2 million as of December 31, 2025, 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 Plans as of March 31, 2026 and December 31, 2025 totaled 1,073 shares with a historical cost basis of $ 1.1 million. All amounts were fully funded into the Rabbi Trust as of March 31, 2026 and December 31, 2025. 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 the Plans’ investments were $ 0.8 million at March 31, 2025. 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. 29 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 9—Stock-Based Compensation Restricted Stock Award Plan 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, and an annual increase on the first day of each fiscal year beginning with January 1, 2026 and ending with the last January 1 during the initial ten-year term of the plan, equal to (a) two and one-half percent ( 2.5 %) of all outstanding shares on the last day of the immediately preceding fiscal year or (b) any lesser amount that the Personnel Committee sets for the purpose of that fiscal year. Pursuant to the 2.5 % evergreen provision described above, the total number of shares available to be issued under the 2025 Plan increased by 17,448 shares to 97,448 as of January 1, 2026. 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 is determined using a volume weighted average price over a 30 -day period as of the grant date. 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 70,460 at March 31, 2026, including 2,370 shares forfeited and available for future awards under the 2025 Plan. The unvested restricted shares generally have voting rights and dividend rights; however, the dividends are paid to the holder only when the restricted shares vest. Dividends on forfeited restricted shares are also forfeited. During the three months ended March 31, 2026, the Company issued the following restricted stock awards under the 2025 Plan: Date of Grant Number of Shares Volume Weighted Average Price over a 30-day Period as of the Grant Date February 10, 2026 913 $ 1,122.22 March 4, 2026 255 1,180.00 The following table summarizes the change in the Company’s restricted stock award shares for the periods indicated. Three Months Ended March 31, 2026 2025 Number of Shares Average of the Volume Weighted Average Price over a 30-day Period as of the Grant Date Number of Shares Average of the Volume Weighted Average Price over a 30-day Period as of the Grant Date Restricted Stock Award Outstanding at beginning of period 31,668 $ 1,033.84 - $ - Granted 1,168 1,134.83 30,818 1,033.03 Vested 12,106 1,033.03 - - Forfeited 378 1,033.03 - - Outstanding at end of period 20,352 $ 1,040.13 30,818 $ 1,033.03 The total intrinsic value of the shares vested during the three months ended March 31, 2026 was $ 14.0 million. For the three months ended March 31, 2026, the Company recognized $ 3.5 million in compensation cost related to shares granted under the 2025 Plan and $ 2.0 million for the three months ended March 31, 2025. As of March 31, 2026, there was $ 18.7 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 1.26 years. 12,106 shares of restricted stock vested during the three months ended March 31, 2026. 30 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 10—Derivatives Derivatives Not Designated as Hedging Instruments As a customer accommodation, the Company may enter into interest rates 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. March 31, 2026 December 31, 2025 (Dollars in thousands) Notional Amount Fair Value Notional Amount Fair Value Derivatives not designated as hedging instruments: Interest rate swaps related to customer loans $ 8,584 $ 116 $ 8,715 $ 172 Total included in other assets $ 116 $ 172 Derivatives not designated as hedging instruments: Interest rate swaps related to customer loans $ 8,584 $ 124 $ 8,715 $ 178 Total included in other liabilities $ 124 $ 178 Three Months Ended March 31, (Dollars in thousands) Location of Gain or (Loss) Recognized in Income on Derivatives 2026 2025 Derivatives not designated as hedging instruments: Interest rate swaps related to loan customers Other (expense) income $ ( 1 ) $ ( 10 ) Total $ ( 1 ) $ ( 10 ) Note 11—Commitments and Contingencies In the normal course of business, the Company enters into financial instruments with off balance sheet risk 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 commitments as of the dates indicated. (Dollars in thousands) March 31, 2026 December 31, 2025 Commitments to extend credit, including unsecured commitments of $ 21,800 and $ 20,995 as of March 31, 2026 and December 31, 2025, respectively $ 1,134,524 $ 1,049,468 Stand-by letters of credit, including unsecured commitments of $ 5,398 and $ 5,248 as of March 31, 2026 and December 31, 2025, respectively 19,805 19,250 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 31 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 11—Commitments and Contingencies—Continued 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 $ 3.3 million at March 31, 2026 and December 31, 2025. 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 March 31, 2026 had maturity dates ranging from 1 to 48 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 March 31, 2026 and December 31, 2025, the balance of the investments in LIHTC was $ 44.0 million and $ 45.5 million, respectively. These balances are reflected in the other assets line on the consolidated balance sheets. Total unfunded commitments related to the investments in LIHTC totaled $ 14.2 million and $ 16.8 million at March 31, 2026 and December 31, 2025, respectively. These balances are reflected in the interest payable and other liabilities line on the consolidated balance sheets. The Company expects to fulfill these commitments through 2044. Additionally, during the three months ended March 31, 2026 and 2025, the Company recognized tax credits from its investments in LIHTC of $ 1.5 million and $ 1.3 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 12—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 eval uated all events or transactions that occurred after March 31, 2026 up through the date the Company issued the financial statements. During this period, there were no subsequent events that req uired recognition or disclosure. 32 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to provide a comprehensive review of the Company’s operating results and financial condition. The information contained in this section should be read in conjunction with the Unaudited Consolidated Financial Statements and the accompanying Notes to Unaudited Consolidated Financial Statements in this Quarterly Report on Form 10-Q included in “Part I. Item 1. Financial Statements.” FORWARD-LOOKING INFORMATION This Quarterly Report on Form 10–Q may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act. These forward-looking statements reflect our current views and are not historical facts. These statements may include statements regarding projected performance for periods following the date of this report. These statements can generally be identified by use of phrases such as “believe,” “expect,” “will,” “seek,” “should,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “commit” or other words of similar import. Similarly, statements that describe our future financial condition, results of operations, objectives, strategies, plans, goals or future performance and business are also forward-looking statements. Statements that project future financial conditions, results of operations, and shareholder value are not guarantees of performance and many of the factors that will determine these results and values are beyond our ability to control or predict. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including, but not limited to, those described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and other parts of this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“Form 10-K”), and our actual results may differ materially from those anticipated in these forward-looking statements. The following is a non-exclusive list of factors which could cause actual results to differ materially from forward-looking statements in this Quarterly Report on Form 10-Q: ■ changes in general economic conditions, either nationally, in California, or in our local markets; ■ inflation, changes in interest rates, securities market volatility and monetary fluctuations; ■ increases in competitive pressures among financial institutions and businesses offering similar products and services; ■ impacts of tariff policies by U.S. and foreign governments; ■ risks associated with negative events in the banking industry, and any legislative and/or bank regulatory actions, that could potentially impact earnings, liquidity and/or the availability of capital or which could increase the cost of our deposit insurance by the FDIC; ■ higher defaults in our loan and lease portfolio than we expect; ■ changes in management’s estimate of the adequacy of the allowance for credit losses; ■ risks associated with our growth and expansion strategy and related costs; ■ increased lending risks associated with our high concentration of real estate loans or agricultural loans; ■ legislative or regulatory changes, changes in monetary and fiscal policies or changes in accounting principles, policies or guidelines; ■ technological changes; ■ operational risks, including processing, information systems, cybersecurity, vendor problems, business interruption, and fraud; ■ regulatory or judicial proceedings; and ■ other factors and risks including those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and the Company’s 2025 Form 10-K. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected, projected, intended, or believed. Please take into account that forward-looking statements speak only as of the date of this Form 10-Q (or documents incorporated by reference, if applicable). 33 Table of Contents The Company does not undertake any obligation to publicly correct or update any forward-looking statements if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statements, except as required by law. Overview Farmers & Merchants Bancorp (the “Company” or “FMCB”) is a Delaware registered bank holding company organized in 1999. As a registered bank holding company, FMCB is subject to regulation, supervision, and examination by the Federal Reserve and by the California Department of Financial Protection and Innovation (“DFPI”). The Company’s principal business is to serve as a holding company for Farmers & Merchants Bank of Central California (the “Bank” or “F&M Bank”) and for other banking or banking related subsidiaries, which the Company may establish or acquire. Over 109 years ago, August 1, 1916, marked the first day of business for Farmers & Merchants Bank, later renamed Farmers & Merchants Bank of Central California. 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. 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. As a legal entity separate 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. 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. The Company’s outstanding common stock as of March 31, 2026, consisted of 693,043 shares of common stock, $0.01 par value. No shares of preferred stock were issued or outstanding as of March 31, 2026. The common stock of the Company is not widely held or listed on any exchange. However, trades are reported on the OTCQX under the symbol “FMCB.” The primary source of funding for the Company’s growth has been the generation of deposits, which the Company raises through its existing branch locations, newly opened branch locations, or through acquisitions. Loan growth over the years is the result of organic growth generated by the Company’s seasoned relationship managers and supporting associates who provide outstanding service and responsiveness to the Company’s clients. The Company’s results of operations are largely dependent on net interest income. Net interest income is the difference between interest income earned on interest earning assets, which are comprised of loans and leases, investment securities, short-term investments and interest-bearing deposits at other banks, and the interest the Company pays on interest bearing liabilities, which are primarily deposits, and, to a lesser extent, other borrowings. Management strives to match the re-pricing characteristics of the interest earning assets and interest-bearing liabilities to protect net interest income from changes in market interest rates and changes in the shape of the yield curve. The Company measures its performance by calculating the net interest margin, return on average assets, return on average equity and the efficiency ratio. Net interest margin is calculated by dividing net interest income, which is the difference between interest income on interest earning assets and interest expense on interest bearing liabilities, by average interest earning assets. Net interest income is the Company’s largest source of revenue. Interest rate fluctuations, as well as changes in the amount and type of earning assets and liabilities, combine to affect net interest income. The return on average assets is calculated by dividing the Company’s net income by its total average assets and 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. 34 Table of Contents Critical Accounting Policies and Estimates Our accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. We identify critical policies and estimates as those that require management to make particularly difficult, subjective, and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. Our critical accounting policy relates to the allowance for credit losses on loans and leases held for investment. Further details are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. Impact of Recently Issued Accounting Standards See Note 1. “Basis of Presentation and Significant Accounting Policies” to the Unaudited Consolidated Financial Statements in “Item 1. Financial Information” in this Quarterly Report on Form 10-Q. Non-GAAP Measurements We use certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. The methodology for determining these non-GAAP measures may differ among companies. We used the following non-GAAP measures in this Form 10-Q: • Tangible common equity ratio and tangible book value per common share: Given that the use of these measures is prevalent among banking regulators, investors, and analysts, we disclose them in addition to the related GAAP measures of return on average equity and book value per common share. The reconciliations of these non-GAAP measurements to the GAAP measurements are presented in the following tables for and as of the periods presented. Tangible Common Equity Ratio and March 31, December 31, March 31, Tangible Book Value Per Common Share 2026 2025 2025 (Dollars in thousands, except share and per share amounts) Shareholders’ equity $ 656,055 $ 645,514 $ 602,306 Less: Intangible assets 12,227 12,348 12,740 Tangible common equity $ 643,828 $ 633,166 $ 589,566 Total assets $ 5,836,664 $ 5,690,110 $ 5,680,024 Less: Intangible assets 12,227 12,348 12,740 Tangible assets $ 5,824,437 $ 5,677,762 $ 5,667,284 Tangible common equity ratio (1) 11.05 % 11.15 % 10.40 % Book value per common share (2) $ 946.63 $ 924.93 $ 825.18 Tangible book value per common share (3) $ 928.99 $ 907.24 $ 807.72 Common shares outstanding 693,043 697,904 729,913 (1) Tangible common equity divided by tangible assets. (2) Total common equity divided by common shares outstanding. (3) Tangible common equity divided by common shares outstanding. 35 Table of Contents Results of Operations The following discussion and analysis is intended to provide a better understanding of the Company’s performance during each of the three-month periods ended March 31, 2026 and 2025 and the material changes in financial condition, operating income, and expense of the Company and its subsidiaries as shown in the accompanying unaudited consolidated financial statements. Information related to the comparison of the results of operations for the years ended December 31, 2025, and 2024 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2025 Form 10-K. Factors that determine the level of net income include the volume of earning assets and interest-bearing liabilities, yields earned and rates paid, fee income, non-interest expense, the level of non-performing loans and other non-earning assets, and the amount of non-interest bearing liabilities supporting earning assets. Non-interest income includes card processing fees, service charges on deposit accounts, bank-owned life insurance income, gains/losses on the sale of investment securities, and gains/losses on deferred compensation plan investments. Non-interest expense consists primarily of salaries and employee benefits, cost of deferred compensation benefits, occupancy, data processing, deposit insurance, marketing, professional services, and other expenses. The efficiency ratio is calculated by dividing non-interest expense by net interest income plus non-interest income. Earnings Performance The following table presents performance metrics for the periods indicated: Three Months Ended March 31, December 31, March 31, (Dollars in thousands, except share and per share amounts) 2026 2025 2025 Earnings Summary: Interest income $ 71,710 $ 71,701 $ 67,138 Interest expense 14,807 14,967 13,997 Net interest income 56,903 56,734 53,141 Provision for credit losses 500 1,100 300 Non-interest income 5,159 6,226 5,021 Non-interest expense 29,178 29,409 25,509 Income before taxes 32,384 32,451 32,353 Income tax expense 8,313 8,628 9,344 Net Income $ 24,071 $ 23,823 $ 23,009 Per Common Share Data: Basic earnings per common share $ 35.91 $ 34.79 $ 32.88 Diluted earnings per common share $ 35.34 $ 34.29 $ 32.86 Book value per common share $ 946.63 $ 924.93 $ 825.18 Tangible book value per common share (1) $ 928.99 $ 907.24 $ 807.72 Performance Ratios: Return on average assets 1.68 % 1.66 % 1.70 % Return on average equity 14.69 % 14.64 % 15.65 % Net interest margin (tax equivalent) 4.25 % 4.18 % 4.20 % Yield on average loans and leases (tax equivalent) 6.08 % 6.06 % 6.07 % Cost of average total deposits 1.18 % 1.18 % 1.18 % Efficiency ratio 47.01 % 46.71 % 43.86 % Loan-to-deposit ratio 71.04 % 73.67 % 72.23 % Percentage of checking deposits to total deposits 46.93 % 49.11 % 45.76 % Capital Ratios Bancorp: Common equity tier 1 capital to risk-weighted assets 14.23 % 13.81 % 13.75 % Tier 1 capital to risk-weighted assets 14.45 % 14.04 % 13.97 % Risk-based capital to risk-weighted assets 15.71 % 15.29 % 15.23 % Tier 1 leverage capital ratio 11.35 % 11.00 % 11.32 % Tangible common equity ratio (1) 11.05 % 11.15 % 10.40 % (1) See “Non-GAAP Measurements” 36 Table of Contents Average Balance and Yields The following table sets forth a summary of average balances with corresponding interest income and interest expense as well as average yield, cost and net interest margin information for the periods presented. Average balances are derived from daily balances. Three Months Ended March 31, 2026 2025 (Dollars in thousands) Average Balance Interest Income / Expense Average Yield / Rate Average Balance Interest Income / Expense Average Yield / Rate ASSETS Interest earnings deposits in other banks and federal funds sold $ 146,029 $ 1,284 3.57 % $ 241,277 $ 2,641 4.44 % Investment securities: (1) Taxable securities 1,592,225 13,486 3.39 % 1,212,632 9,464 3.12 % Non-taxable securities (2) 62,812 1,823 11.61 % 66,528 785 4.72 % Total investment securities 1,655,037 15,309 3.70 % 1,279,160 10,249 3.20 % Loans: (3) Real estate: Commercial 1,488,189 20,577 5.61 % 1,346,456 17,806 5.36 % Agricultural 690,888 9,797 5.75 % 739,339 10,985 6.03 % Residential and home equity 403,358 5,126 5.15 % 398,410 4,831 4.92 % Construction 129,304 2,266 7.11 % 184,867 3,022 6.63 % Total real estate 2,711,739 37,766 5.65 % 2,669,072 36,644 5.57 % Commercial & industrial 501,445 8,781 7.10 % 493,797 8,870 7.28 % Agricultural 259,334 4,931 7.71 % 268,350 5,264 7.96 % Commercial leases 169,512 3,125 7.48 % 174,314 3,172 7.38 % Consumer and other 4,825 79 6.64 % 5,055 85 6.82 % Total loans and leases 3,646,855 54,682 6.08 % 3,610,588 54,035 6.07 % Non-marketable securities 15,549 798 20.81 % 15,549 368 9.60 % Total interest earning assets 5,463,470 72,073 5.35 % 5,146,574 67,293 5.30 % Allowance for credit losses (76,827 ) (75,821 ) Non-interest earning assets 344,846 346,762 Total average assets $ 5,731,489 $ 5,417,515 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest-bearing deposits: Demand $ 787,524 $ 567 0.29 % $ 842,785 541 0.26 % Savings and money market accounts 1,881,322 8,310 1.79 % 1,679,076 7,333 1.77 % Certificates of deposit greater than $250,000 417,655 3,389 3.29 % 386,650 3,518 3.69 % Certificates of deposit equal to or less than $250,000 343,059 2,365 2.80 % 327,596 2,413 2.99 % Total interest-bearing deposits 3,429,560 14,631 1.73 % 3,236,107 13,805 1.73 % Short-term borrowings 3 - 0.00 % 3 - 0.00 % Subordinated debentures 10,310 176 6.92 % 10,310 192 7.55 % Total interest-bearing liabilities 3,439,873 14,807 1.75 % 3,246,420 13,997 1.75 % Non-interest bearing deposits 1,578,485 1,493,663 Total funding 5,018,358 14,807 1.20 % 4,740,083 13,997 1.20 % Other non-interest bearing liabilities 57,894 89,255 Shareholders’ equity 655,237 588,177 Total average liabilities and shareholders’ equity $ 5,731,489 $ 5,417,515 Net interest income and margin (4) $ 57,266 4.25 % $ 53,296 4.20 % Interest rate spread 3.60 % 3.55 % Tax equivalent adjustment (2) (363 ) (155 ) Net interest income $ 56,903 4.22 % $ 53,141 4.19 % (1) Excludes average unrealized losses of $2.0 million and $23.6 million for the three months ended March 31, 2026, and 2025, respectively, which are included in non-interest earning assets. (2) Yield and interest income are calculated on a fully taxable equivalent basis using the current statutory federal tax rate of 21%. (3) Loan interest income includes loan fees of $2.2 million and $1.7 million for the three months ended March 31, 2026 and 2025, respectively. (4) Net interest margin is computed by dividing net interest income by average interest earning assets. 37 Table of Contents Interest-bearing deposits with banks and FRB balances are earning assets available to the Company. Average interest-bearing deposits with banks consisted primarily of FRB deposits. Balances with the FRB earned an average interest rate of 3.57% and 4.44% for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily the result of the Federal Reserve decreasing rates by 75 basis points from September 2025 to December 2025. Average interest-bearing deposits with banks was $146.0 million and $241.3 million for the three months ended March 31, 2026 and 2025, respectively. Interest income on interest bearing deposits with banks was $1.3 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively. 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. Historically, the Company invested primarily in: (1) mortgage-backed securities issued by government-sponsored entities; (2) debt securities issued by the U.S. Treasury, government agencies and government-sponsored entities; and (3) investment grade bank-qualified municipal bonds. However, at certain times the Company has selectively added investment grade corporate securities (floating rate and fixed rate with maturities less than 7 years) to the portfolio in order to obtain yields that exceed government agency securities of equivalent maturity. Since the risk factor for these types of investments is generally lower than that of loans and leases, the yield earned on investments is generally less than that of loans and leases. Average total investment securities were $1.66 billion and $1.28 billion for the three months ended March 31, 2026 and 2025, respectively. The average yield on total investment securities was 3.70% and 3.20% for the three months ended March 31, 2026 and 2025, respectively. 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 2025. Average loans and leases held for investment were $3.65 billion and $3.61 billion for the three months ended March 31, 2026 and 2025, respectively. The average yield on the loan and lease portfolio was 6.08% and 6.07% for the three months ended March 31, 2026 and 2025, respectively. Average interest-bearing deposits were $3.43 billion and $3.24 billion for the three months ended March 31, 2026 and 2025, respectively. The average rate paid on interest bearing deposits was 1.73% for the three months ended March 31, 2026 and 2025. Total interest expense on interest- bearing deposits was $14.6 million and $13.8 million for the three months ended March 31, 2026 and 2025, respectively, with the increase driven by an increase in average balances. The average rate paid on total funding costs was 1.20% for the three months ended March 31, 2026 and 2025. 38 Table of Contents Rate/Volume Analysis The following table shows the change in interest income and interest expense and the amount of change attributable to variances in volume, rates and the combination of volume and rates based on the relative changes of volume and rates. For purposes of this table, the change in interest due to both volume and rate has been allocated to change due to volume and rate in proportion to the relationship of absolute dollar amounts of change in each. Three Months Ended March 31, 2026 compared with 2025 Increase (Decrease) Due to: (Dollars in thousands) Volume Rate Net Interest income: Interest earnings deposits in other banks and federal funds sold $ (906 ) $ (451 ) $ (1,357 ) Investment securities: Taxable securities 3,161 861 4,022 Non-taxable securities (299 ) 1,337 1,038 Total investment securities 2,862 2,198 5,060 Loans: Real estate: Commercial 1,934 837 2,771 Agricultural (701 ) (487 ) (1,188 ) Residential and home equity 61 234 295 Construction (2,034 ) 1,278 (756 ) Total real estate (740 ) 1,862 1,122 Commercial & industrial 655 (744 ) (89 ) Agricultural (174 ) (159 ) (333 ) Commercial leases (260 ) 213 (47 ) Consumer and other (4 ) (2 ) (6 ) Total loans and leases (523 ) 1,170 647 Non-marketable securities - 430 430 Total interest income 1,433 3,347 4,780 Interest expense: Interest-bearing deposits: Demand (178 ) 204 26 Savings and money market accounts 892 85 977 Certificates of deposit greater than $250,000 1,259 (1,388 ) (129 ) Certificates of deposit equal to or less than $250,000 512 (560 ) (48 ) Total interest-bearing deposits 2,485 (1,659 ) 826 Subordinated debentures - (16 ) (16 ) Total interest expense 2,485 (1,675 ) 810 Net interest income $ (1,052 ) $ 5,022 $ 3,970 39 Table of Contents Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025 Three Months Ended March 31, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) Selected Income Statement Information: Interest income $ 71,710 $ 67,138 $ 4,572 6.81 % Interest expense 14,807 13,997 (810 ) (5.79 %) Net interest income 56,903 53,141 3,762 7.08 % Provision for credit losses 500 300 (200 ) (66.67 %) Net interest income after provision for credit losses 56,403 52,841 3,562 6.74 % Non-interest income 5,159 5,021 138 2.75 % Non-interest expense 29,178 25,509 (3,669 ) (14.38 %) Income before income tax expense 32,384 32,353 31 0.10 % Income tax expense 8,313 9,344 1,031 11.03 % Net income $ 24,071 $ 23,009 $ 1,062 4.62 % For the three months ended March 31, 2026 and 2025, net income was $24.1 million compared with $23.0 million, respectively. The increase in net income was primarily the result of higher net interest income of $3.8 million. This increase was offset by an increase in non-interest expense of $3.7 million during the three months ended March 31, 2026, compared to the same period in the prior year, and a $0.5 million provision for credit losses during the first quarter of 2026 compared to a $0.3 million provision in 2025. Net Interest Income and Net Interest Margin For the three months ended March 31, 2026 and 2025, net interest income was $56.9 million compared with $53.1 million, respectively. The increase in net interest income is primarily the result of the net interest margin (tax equivalent basis) increasing 5 basis points to 4.25% compared with 4.20% for the same period a year earlier. The increase in the net interest margin was primarily the result of the increase in investment securities income of $5.1 million as the average balance increased $375.9 million compared to the first quarter of 2025. The investment securities yield during the first quarter of 2026 increased 50 basis points from 3.20% to 3.70% compared to the first quarter of 2025. The loan yield increased 1 basis point from 6.07% to 6.08% compared to the first quarter of 2025. The yield on interest-bearing deposits remained flat at 1.73% for the first quarter of 2026 and 2025. The cost of average total deposits was also flat at 1.18% for the first quarter of 2026 and 2025. Provision for Credit Losses The provision for credit losses in each period is a charge against earnings in that period. The provision is the amount required to maintain the allowance for credit losses at a level that, in management’s judgment, is adequate to absorb expected credit losses over the life of the loans and leases, unfunded loan commitments and HTM securities portfolios. 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 the current expected credit losses (“CECL”) methodology, the Company recorded a $0.5 million provision for credit losses during the first three months of 2026 compared to a $0.3 million provision for credit losses during the first three months of 2025. Net recoveries for the three months ended March 31, 2026 were $43,000 compared to net charge-offs of $161,000 for the same period a year earlier. 40 Table of Contents Non-interest Income Three Months Ended March 31, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) Non-interest Income: Card processing $ 1,734 $ 1,667 $ 67 4.02 % Net gain on deferred compensation benefits - 833 (833 ) N/A Service charges on deposit accounts 819 772 47 6.09 % Increase in cash surrender value of BOLI 638 603 35 5.80 % Other 1,968 1,146 822 71.73 % Total non-interest income $ 5,159 $ 5,021 $ 138 2.75 % Non-interest income increased $138,000, or 2.8%, to $5.2 million for the three months ended March 31, 2026, compared with $5.0 million for the same period a year earlier. The year-over-year increase in non-interest income was primarily due to a $0.8 million increase in other income due to a gain on the sale of other real estate owned of $340,000 and a net gain on equity investments of $283,000. The Company’s deferred compensation plans were terminated and frozen effective November 29, 2024, and all of the components of the plans were liquidated and paid out to eligible participants on December 10, 2025. The Company recorded net gains on deferred compensation plan investments of $0.8 million for the three months ended March 31, 2025, due to market value changes in underlying assets and increases in interest and dividends. See Note 10, “Employee Benefit Plans,” located in Item 8. “Financial Statements and Supplementary Data” in the Company’s 2025 Form 10-K for a description of these plans. 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. Although GAAP requires these investment gains/losses to 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. Non-interest Expense Three Months Ended March 31, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) Non-interest Expense: Salaries and employee benefits $ 20,433 $ 17,144 $ (3,289 ) (19.18 %) Data processing 1,864 1,638 (226 ) (13.80 %) Occupancy 1,243 1,302 59 4.53 % Net gain on deferred compensation benefits - 833 833 N/A Deposit insurance 840 748 (92 ) (12.30 %) Professional services 1,139 922 (217 ) (23.54 %) Marketing 578 467 (111 ) (23.77 %) Other 3,081 2,455 (626 ) (25.50 %) Total non-interest expense $ 29,178 $ 25,509 $ (3,669 ) (14.38 %) Non-interest expense increased $3.7 million, or 14.38%, to $29.2 million for the three months ended March 31, 2026, compared with $25.5 million for the same period a year ago. This year-over-year increase was primarily due to an increase in salaries and employee benefits which included an increase in compensation expense of $2.8 million due to an increase in employee headcount of eleven, annual increases in salaries, an increase in payroll taxes and three months of stock compensation expense in 2026 versus two months in 2025 since the first ever restricted stock awards were issued in February 2025. Professional services increased $0.2 million due to higher legal and consulting services while most expenses continued to rise due in part to ongoing inflation. 41 Table of Contents The Company’s deferred compensation plans were terminated and frozen effective November 29, 2024, and all of the components of the plans were liquidated and paid out to eligible participants on December 10, 2025. Net gains on deferred compensation plan obligations were $0.8 million for the three months ended March 31, 2025, due to market value changes in underlying assets and increases in interest and dividends. See Note 10 “Employee Benefit Plans,” located in “Item 8. Financial Statements and Supplementary Data” in the Company’s 2025 Form 10-K for a description of these plans. 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. 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. Income Tax Expense For the three months ended March 31, 2026, income tax expense was $8.3 million compared to $9.3 million for the same period a year earlier. For the three months ended March 31, 2026, the Company’s effective tax rate was 25.67% compared to 28.88% for the same period a year earlier. The Company’s effective tax rate can fluctuate from quarter to quarter due primarily to changes in the mix of taxable and tax-exempt earning assets. The effective rates were lower than the combined Federal and State statutory rate of 30% primarily due to credits associated with low-income housing tax credit investments (“LIHTC”); and tax-exempt interest income on municipal securities and loans. The Company files U.S. and state income tax returns in jurisdictions with various statutes of limitations. The 2022 through 2025 federal tax years and the 2021 through 2025 state tax years remain subject to selection for examination as of March 31, 2026. The IRS is in the process of reviewing the Company’s 2023 tax return including inquiries related to certain leasing investment tax credits. The timing related to when the IRS review will be complete remains uncertain. Balance Sheet Analysis Total assets were $5.8 billion at March 31, 2026, compared with $5.7 billion at December 31, 2025, an increase of $146.6 million, or 2.58%. Total cash and cash equivalents increased $239.4 million from $144.9 million as of December 31, 2025 to $384.2 million as of March 31, 2026.The net investment portfolio decreased by $59.6 million, or 3.57%, to $1.6 billion at March 31, 2026, compared to $1.7 billion at December 31, 2025. Total loans and leases held for investment were $3.62 billion at March 31, 2026, compared with $3.65 billion at December 31, 2025, a decrease of $32.1 million, or 0.88%. Total deposits were $5.1 billion at March 31, 2026, compared with $5.0 billion at December 31, 2025, an increase of $138.4 million, or 2.78%. Our loan to deposit ratio was 71.04% and 73.67% as of March 31, 2026 and December 31, 2025, respectively. Cash and Cash Equivalents The Company’s cash and cash equivalents consist of interest-bearing deposits with banks and overnight investments in Federal Reserve balances. Interest-bearing deposits with banks consisted primarily of FRB deposits. 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 $318.1 million at March 31, 2026 and $84.2 million at December 31, 2025. The increase in cash was primarily due to the increase in deposits of $138.4 million. The Company’s total cash and cash equivalents as of March 31, 2026 represented 6.6% of the Company’s total assets as compared to 2.6% of total assets as of December 31, 2025. 42 Table of Contents Investment Securities The Company’s net investment portfolio decreased by $59.6 million, or 3.57%, to $1.61 billion at March 31, 2026, compared to $1.67 billion at December 31, 2025. The Company uses its investment portfolio to manage interest rate and liquidity risks. The Company’s total investment portfolio as of March 31, 2026 represents 27.59% of the Company’s total assets as compared to 29.35% of total assets at December 31, 2025. Available-for-sale securities are carried at fair value and held-to-maturity securities are carried at amortized cost under GAAP. The carrying value of our portfolio of investment securities for the dates indicated are as follows: (Dollars in thousands) March 31, 2026 December 31, 2025 Available-for-sale securities U.S. Government-sponsored securities $ 1,940 $ 2,038 Mortgage-backed securities (1) 779,628 826,240 Commercial mortgage-backed securities (1) 1,251 1,253 Collateralized mortgage obligations (1) 20,319 20,730 Municipal securities 68,791 70,845 Corporate securities 29,676 29,738 Other 310 310 Total available-for-sale securities $ 901,915 $ 951,154 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. (Dollars in thousands) March 31, 2026 December 31, 2025 Held-to-maturity securities Mortgage-backed securities (1) $ 577,812 $ 586,001 Collateralized mortgage obligations (1) 60,972 62,476 Municipal securities 69,489 70,164 Total held-to-maturity securities $ 708,273 $ 718,641 Allowance for credit losses (450 ) (450 ) Total held-to-maturity securities $ 707,823 $ 718,191 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 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 March 31, 2026 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Securities available-for-sale U.S. Government-sponsored securities $ - 0.00 % $ 18 5.20 % $ 278 5.60 % $ 1,644 4.51 % $ 1,940 4.67 % Mortgage-backed securities (1) 346 2.27 % 740 2.61 % 2,552 4.08 % 775,990 4.75 % 779,628 4.74 % Commercial mortgage-backed securities (1) - 0.00 % - 0.00 % - 0.00 % 1,251 5.81 % 1,251 5.81 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % 12,968 4.41 % 7,351 5.21 % 20,319 4.70 % Municipal securities - 0.00 % - 0.00 % 28,900 4.71 % 39,891 4.73 % 68,791 4.72 % Corporate securities 10,017 4.44 % 19,659 4.56 % - 0.00 % - 0.00 % 29,676 4.52 % Other 310 6.81 % - 0.00 % - 0.00 % - 0.00 % 310 6.81 % Total securities available-for-sale $ 10,673 4.44 % $ 20,417 4.49 % $ 44,698 4.59 % $ 826,127 4.75 % $ 901,915 4.74 % (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 43 Table of Contents As of March 31, 2026 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Securities held-to-maturity Mortgage-backed securities (1) $ - 0.00 % $ 44 2.66 % $ 5,313 1.67 % $ 572,455 1.90 % $ 577,812 1.89 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % - 0.00 % 60,972 1.76 % 60,972 1.76 % Municipal securities 2,108 3.45 % 18,000 3.77 % 12,670 2.35 % 36,711 2.78 % 69,489 2.98 % Total securities held-to-maturity $ 2,108 3.45 % $ 18,044 3.77 % $ 17,983 2.15 % $ 670,138 1.93 % $ 708,273 1.99 % (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. As of December 31, 2025 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Securities available-for-sale U.S. Government-sponsored securities $ - 0.00 % $ 14 5.36 % $ 290 6.03 % $ 1,734 5.03 % $ 2,038 5.17 % Mortgage-backed securities (1) 362 2.40 % 981 2.53 % 2,816 4.09 % 822,081 4.76 % 826,240 4.75 % Commercial mortgage-backed securities (1) - 0.00 % - 0.00 % - 0.00 % 1,253 5.82 % 1,253 5.82 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % - 0.00 % 20,730 4.74 % 20,730 4.74 % Municipal securities - 0.00 % - 0.00 % 22,672 4.70 % 48,173 4.76 % 70,845 4.74 % Corporate securities 5,000 4.34 % 24,738 4.72 % - 0.00 % - 0.00 % 29,738 4.66 % Other 310 7.45 % - 0.00 % - 0.00 % - 0.00 % 310 7.45 % Total securities available-for-sale $ 5,672 4.39 % $ 25,733 4.64 % $ 25,778 4.65 % $ 893,971 4.76 % $ 951,154 4.75 % (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. As of December 31, 2025 Within One Year After One but Within Five Years After Five but Within Ten Years After Ten Years Total (Dollars in thousands) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Securities held-to-maturity Mortgage-backed securities (1) $ - 0.00 % $ 48 2.64 % $ 5,649 1.68 % $ 580,304 1.90 % $ 586,001 1.90 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % - 0.00 % 62,476 1.74 % 62,476 1.74 % Municipal securities 1,918 3.57 % 18,363 4.56 % 13,004 4.09 % 36,879 5.10 % 70,164 4.73 % Total securities held-to-maturity $ 1,918 3.57 % $ 18,411 4.55 % $ 18,653 3.36 % $ 679,659 2.06 % $ 718,641 2.16 % (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. 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 penalties. The Company evaluates securities for expected credit losses at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Loans and Leases Loans and leases can be categorized by borrowing purpose and use of funds. For detailed descriptions of the various loan types offered by the Company see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K. The Company’s loan and lease portfolio at March 31, 2026 totaled $3.6 billion, a decrease of $32.1 million, or 0.88%, from December 31, 2025, due partially to seasonality in the agricultural portfolio and due to lower loan production as the Company continued to prioritize appropriate loan pricing and loan structure over loan growth. 44 Table of Contents The following table sets forth the distribution of the loan and lease portfolio by type and percent at the dates indicated: March 31, 2026 December 31, 2025 (Dollars in thousands) Dollars Percent of Total Dollars Percent of Total Gross loans and leases Real estate: Commercial $ 1,504,452 41.38 % $ 1,480,906 40.37 % Agricultural 689,981 18.98 % 705,668 19.24 % Residential and home equity 403,777 11.11 % 405,080 11.05 % Construction 132,487 3.65 % 128,179 3.50 % Total real estate 2,730,697 75.12 % 2,719,833 74.16 % Commercial & industrial 462,196 12.72 % 497,700 13.57 % Agricultural 261,279 7.19 % 264,117 7.20 % Commercial leases 175,744 4.84 % 181,004 4.94 % Consumer and other 4,640 0.13 % 4,671 0.13 % Total gross loans and leases $ 3,634,556 100.00 % $ 3,667,325 100.00 % The following table shows the maturity distribution and interest rate sensitivity of the loan and lease portfolio of the Company at March 31, 2026. Loan Contractual Maturity (Dollars in thousands) One Year or Less After One But Within Five Years After Five But Within Fifteen Years After Fifteen Years Total Gross loan and leases: Real estate: Commercial $ 90,630 $ 691,948 $ 692,936 $ 28,938 $ 1,504,452 Agricultural 44,844 188,434 425,550 31,153 689,981 Residential and home equity 135 6,008 121,853 275,781 403,777 Construction 101,967 30,520 - - 132,487 Total real estate 237,576 916,910 1,240,339 335,872 2,730,697 Commercial & industrial 145,152 232,318 82,485 2,241 462,196 Agricultural 175,654 75,832 9,793 - 261,279 Commercial leases 2,674 95,395 77,675 - 175,744 Consumer and other 1,229 2,824 141 446 4,640 Total gross loans and leases $ 562,285 $ 1,323,279 $ 1,410,433 $ 338,559 $ 3,634,556 Rate structure for loans and leases Fixed rate $ 174,763 $ 962,950 $ 780,937 $ 183,618 $ 2,102,268 Adjustable rate 387,522 360,329 629,496 154,941 1,532,288 Total gross loans and leases $ 562,285 $ 1,323,279 $ 1,410,433 $ 338,559 $ 3,634,556 45 Table of Contents 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) March 31, 2026 December 31, 2025 Non-performing assets: Non-accrual loans and leases Real estate: Commercial $ 730 $ 750 Agricultural - - Residential and home equity - - Construction - - Total real estate 730 750 Commercial & industrial - - Agricultural - - Commercial leases - - Consumer and other - - Total non-performing loans and leases 730 750 Other real estate owned (“OREO”) - - Total non-performing assets $ 730 $ 750 Selected ratios: Non-performing loans to total loans and leases 0.02 % 0.02 % Non-performing assets to total assets 0.01 % 0.01 % 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 respect to interest or principal. 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. When a loan or lease is placed on non-accrual status, all interest previously accrued but not collected is reversed. 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. The Company had $730,000 in non-accrual loans at March 31, 2026, compared to $750,000 in non-accrual loans at December 31, 2025. 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. See Note 3. “Loans and Leases”, located in “Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for an allocation of 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. The Company reported no OREO at March 31, 2026 and December 31, 2025. Loan Modifications to Borrowers Experiencing Financial Difficulties – In the normal course of business, the Company may execute loan modifications to borrowers experiencing financial difficulties. Some of these modifications include: term extension, principal forgiveness, rate reduction, other-than-insignificant payment delay, or any combination of those. 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. Because the effect of most 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 generally not recorded upon modification. Occasionally, the Company modifies loans by providing principal forgiveness that is deemed to be uncollectable; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses. The Company modified four loans in the aggregate amount of $5.0 million, during the first three months of March 31, 2026. There was one loan modified within the last twelve months that had a payment default and was past due at of March 31, 2026. 46 Table of Contents The Company modified nine loans, with five borrowers, in the aggregate amount of $7.0 million, during the year ended December 31, 2025. These loans were current at December 31, 2025. Allowance for Credit Losses—Loans and Leases The Company maintains an allowance for credit losses (“ACL”) under ASC Topic 326, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“CECL”). The allowance is established through a provision for credit losses, which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan and lease growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is recorded as a recovery to the allowance. The overall allowance consists of two primary components: specific reserves related to individually evaluated loans and leases and general reserves comprised of both quantitative and qualitative factors for current expected credit losses related to loans and leases that are not individually evaluated. The Company uses the Weighted Average Remaining Maturity (“WARM”) methodology to calculate the ACL, as this method is deemed the most appropriate given the Company’s size and complexity. See Note 1 “Summary of Significant Accounting Policies - Allowance for Credit Losses – Loans and Leases” in our 2025 Form 10-K. The allowance for credit losses is the combination of the allowance for credit losses on loan and lease losses and the allowance for credit losses on unfunded loan commitments. The ACL for unfunded loan commitments is included within “Interest payable and other liabilities” on the consolidated balance sheets. 47 Table of Contents 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: Three Months Ended March 31, (Dollars in thousands) 2026 2025 Allowance for credit losses: Balance at beginning of year $ 79,675 $ 77,973 Provision for credit losses: Allowance for credit losses - loans and leases 500 300 Allowance for credit losses - unfunded loan commitments - - Total provision for credit losses 500 300 Charge-offs: Real estate: Commercial - - Agricultural - - Residential and home equity - - Construction - - Total real estate - - Commercial & industrial - (232 ) Agricultural - (34 ) Commercial leases - - Consumer and other (8 ) (7 ) Total charge-offs (8 ) (273 ) Recoveries: Real estate: Commercial - - Agricultural - - Residential and home equity 24 3 Construction - - Total real estate 24 3 Commercial & industrial 12 106 Agricultural 1 - Commercial leases - - Consumer and other 14 4 Total recoveries 51 113 Net recoveries/(charge-offs) 43 (160 ) Balance at end of period $ 80,218 $ 78,113 Allowance for credit losses - loans and leases 76,918 75,423 Allowance for credit losses - unfunded loan commitments 3,300 2,690 Total allowance for credit losses $ 80,218 $ 78,113 Selected financial information: Net loans and leases held for investment $ 3,616,871 $ 3,584,174 Average loans and leases 3,646,855 3,610,588 Non-performing loans and leases 730 193 Allowance for credit losses to non-performing loans and leases N/M (1) N/M (1) Net recoveries/(charge-offs) to average loans and leases 0.001 % (0.004 %) Provision for credit losses to average loans and leases 0.01 % 0.01 % Allowance for loan and lease losses to loans and leases held for investment 2.12 % 2.10 % (1) Not meaningful (N/M) 48 Table of Contents The following table indicates management’s allocation of the ACL for loans and leases by loan type as of each of the following dates: March 31, 2026 December 31, 2025 (Dollars in thousands) Dollars Percent of Each Loan Type to Total Loans Percent of ACL to Each Loan Type Dollars Percent of Each Loan Type to Total Loans Percent of ACL to Each Loan Type Allowance for credit losses: Real estate: Commercial $ 21,935 41.38 % 1.46 % $ 22,574 40.37 % 1.52 % Agricultural 22,481 18.98 % 3.26 % 23,647 19.24 % 3.35 % Residential and home equity 7,480 11.11 % 1.85 % 7,620 11.05 % 1.88 % Construction 2,846 3.65 % 2.15 % 2,311 3.50 % 1.80 % Total real estate 54,742 75.12 % 2.00 % 56,152 74.16 % 2.06 % Commercial & industrial 9,100 12.72 % 1.97 % 7,355 13.57 % 1.48 % Agricultural 7,173 7.19 % 2.75 % 6,760 7.20 % 2.56 % Commercial leases 5,682 4.84 % 3.23 % 5,861 4.94 % 3.24 % Consumer and other 221 0.13 % 4.76 % 247 0.13 % 5.29 % Total allowance for credit losses $ 76,918 100.00 % 2.12 % $ 76,375 100.00 % 2.08 % Deposits The following table shows the deposit balances as of the dates indicated: March 31, December 31, (Dollars in thousands) 2026 2025 Deposits: Non-interest bearing $ 1,615,425 $ 1,642,119 Interest-bearing: Demand 785,612 802,352 Savings and money market 1,916,012 1,790,274 Certificates of deposit 799,224 743,081 Total interest-bearing 3,500,848 3,335,707 Total deposits $ 5,116,273 $ 4,977,826 Total deposits were $5.1 billion and $5.0 billion as of March 31, 2026 and December 31, 2025, respectively, an increase of $138.4 million or 2.78%. The increase was primarily due to an increase in savings and money market accounts of $125.7 million or 7.02%, and an increase in certificates of deposit of $56.1 million or 7.56% from December 31, 2025 to March 31, 2026, respectively. The increase in certificates of deposit reflects a $50.0 million increase in public time deposits related to the State of California which matures in June 2026. These increases were partially offset by a decrease of $26.7 million or 1.63% in non-interest bearing demand deposits and a decrease of $16.7 million or 2.1% in interest-bearing demand deposits from December 31, 2025 to March 31, 2026. 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 savings and money market accounts and certificates of deposit. Conversely, this shift contributed to the decrease in interest-bearing demand deposits. Non-interest bearing deposits were 31.57% and 32.99% of total deposits, at March 31, 2026 and December 31, 2025, respectively. 49 Table of Contents The following table shows the average amount and average rate paid on the categories of deposits for each of the periods presented: Three Months Ended March 31, 2026 2025 (Dollars in thousands) Average Balance Interest Expense Average Rate Average Balance Interest Expense Average Rate Total deposits: Interest-bearing deposits: Demand $ 787,524 $ 567 0.29 % $ 842,785 $ 541 0.26 % Savings and money market 1,881,322 8,310 1.79 % 1,679,076 7,333 1.77 % Certificates of deposit greater than $250,000 417,655 3,389 3.29 % 386,650 3,518 3.69 % Certificates of deposit equal to or less than $250,000 343,059 2,365 2.80 % 327,596 2,413 2.99 % Total interest-bearing deposits 3,429,560 14,631 1.73 % 3,236,107 13,805 1.73 % Non-interest bearing deposits 1,578,485 1,493,663 Total deposits $ 5,008,045 $ 14,631 1.18 % $ 4,729,770 $ 13,805 1.18 % Deposits are gathered from individuals and businesses in our market areas. The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements. The Company reduced interest rates during the last four months of 2025 after the Federal Reserve cut interest rates by 75 basis points between September and December. The average cost of total deposits, including non-interest bearing deposits, remained flat at 1.18% for the three months ended March 31, 2026, compared to the same period a year ago. The following table shows deposits with a balance greater than $250,000 at March 31, 2026 and December 31, 2025: March 31, December 31, (Dollars in thousands) 2026 2025 Non-Maturity Deposits greater than $250,000 $ 2,781,415 $ 2,729,456 Certificates of deposit greater than $250,000, by maturity: Less than 3 months 265,928 137,517 3 months to 6 months 111,796 192,804 6 months to 12 months 74,757 67,313 More than 12 months 1,412 629 Total certificates of deposit greater than $250,000 $ 453,893 $ 398,263 Total deposits greater than $250,000 $ 3,235,308 $ 3,127,719 Refer to the Year-To-Date Average Balance and Yield Schedule located in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information on separate deposit categories. The Bank participates in a program wherein the State of California places time deposits with the Bank at the Bank’s option. As of March 31, 2026 the Bank had $53.0 million of such deposits compared to $3.0 million at December 31, 2025. Total estimated uninsured deposits based on our regulatory reporting amounted to $2.7 billion and $2.6 billion at March 31, 2026 and December 31, 2025, respectively. Federal Home Loan Bank Advances and Federal Reserve Bank Borrowings Lines of Credit with the Federal Home Loan Bank and FRB are other key sources of funds to support earning assets and liquidity. These sources of funds are also used to manage the Company’s interest rate risk exposure and, as opportunities arise, to borrow and invest the proceeds at a positive spread through the investment portfolio. There were no FHLB advances at March 31, 2026 or December 31, 2025. There were no Federal Funds purchased or advances from the FRB at March 31, 2026 or December 31, 2025. 50 Table of Contents Long-Term Subordinated Debentures On December 17, 2003, the Company raised $10.0 million through the sale of subordinated debentures to an off-balance-sheet trust and its sale of trust-preferred securities. See Note 9. “Long-Term Subordinated Debentures” located in “Item 8. Financial Statements and Supplementary Data” in our 2025 Form 10-K. Although this amount is reflected as subordinated debt on the Company’s balance sheet, under current regulatory guidelines, our Trust Preferred Securities continue to qualify as regulatory capital. These securities accrue interest at a variable rate based upon 3-month SOFR plus 2.85%. Interest rates reset quarterly and the rate was 6.79% at March 31, 2026 (the next reset is June 17, 2026). The average rate paid for these securities was 6.92% for the first three months of 2026 and 7.55% for the first three months of 2025. Additionally, if the Company decided to defer interest on the subordinated debentures, the Company would be prohibited by the terms of the debentures from paying cash dividends on the Company’s common stock. Capital Resources The Company relies primarily on capital generated through the retention of earnings to satisfy its capital requirements. The Company engages in an ongoing assessment of its capital needs in order to support business growth and to insure depositor protection. Shareholders’ equity totaled $656.1 million at March 31, 2026, an increase of $10.5 million, or 1.63%, from $645.5 million at December 31, 2025 due primarily to net income of $24.1 million during the first quarter of 2026 offset by dividends of $3.7 million and a decrease in other comprehensive income of $6.8 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. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The 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. As of March 31, 2026, the Company was in compliance with all of these capital requirements and there were no restrictions on the Company’s business activity. As of March 31, 2026 the Bank met the requirements to be categorized as “well-capitalized” under the FDIC regulatory framework for prompt corrective action. 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 forth in the following tables as of March 31, 2026 and December 31, 2025. 51 Table of Contents The Company’s and Bank’s actual and required capital amounts and ratios are as follows: March 31, 2026 Actual Required for Capital Adequacy Purposes Minimum to be Categorized as “Well Capitalized” Under Prompt Corrective Action Regulation (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Farmers & Merchants Bancorp CET1 capital to risk-weighted assets $ 637,845 14.23 % $ 201,755 4.50 % N/A N/A Tier 1 capital to risk-weighted assets 647,845 14.45 % 269,007 6.00 % N/A N/A Risk-based capital to risk-weighted assets 704,192 15.71 % 358,676 8.00 % N/A N/A Tier 1 leverage capital ratio 647,845 11.35 % 228,394 4.00 % N/A N/A F & M Bank CET1 capital to risk-weighted assets $ 645,364 14.40 % $ 201,708 4.50 % $ 291,356 6.50 % Tier 1 capital to risk-weighted assets 645,364 14.40 % 268,944 6.00 % 358,592 8.00 % Risk-based capital to risk-weighted assets 701,698 15.65 % 358,592 8.00 % 448,240 10.00 % Tier 1 leverage capital ratio 645,364 11.31 % 228,157 4.00 % 285,196 5.00 % December 31, 2025 Actual Required for Capital Adequacy Purposes Minimum to be Categorized as “Well Capitalized” Under Prompt Corrective Action Regulation (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Farmers & Merchants Bancorp CET1 capital to risk-weighted assets $ 620,134 13.81 % $ 202,001 4.50 % N/A N/A Tier 1 capital to risk-weighted assets 630,134 14.04 % 269,334 6.00 % N/A N/A Risk-based capital to risk-weighted assets 686,542 15.29 % 359,112 8.00 % N/A N/A Tier 1 leverage capital ratio 630,134 11.00 % 229,189 4.00 % N/A N/A F & M Bank CET1 capital to risk-weighted assets $ 627,683 13.99 % $ 201,969 4.50 % $ 291,733 6.50 % Tier 1 capital to risk-weighted assets 627,683 13.99 % 269,292 6.00 % 359,056 8.00 % Risk-based capital to risk-weighted assets 684,082 15.24 % 359,056 8.00 % 448,820 10.00 % Tier 1 leverage capital ratio 627,683 10.98 % 228,755 4.00 % 285,944 5.00 % On September 10, 2024 the Board of Directors authorized a new share repurchase program (the “Repurchase Plan”) in which the Company may repurchase up to $55.0 million of the Company’s common stock, which represented approximately 9% of outstanding shareholders’ equity at the time of approval. 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 program through December 31, 2027. 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 other means. In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted. Among other things, the IRA imposes an excise tax equal to 1% of the fair market value of any stock repurchased by covered corporations during a taxable year, subject to certain limits and provisions. During the first three months of 2026, the Company repurchased 181 shares under the Repurchase Plan, for a total of $202,000, inclusive of the excise tax. As of March 31, 2026, there remains $30.1 million authorized for repurchases under the Repurchase Plan. 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. On February 12, 2026, the Company declared a quarterly cash dividend of $5.10 per share which was paid on April 1, 2026, to shareholders of record on March 11, 2026. 52 Table of Contents Off-Balance-Sheet Arrangements Off-balance-sheet arrangements are any contractual arrangement to which an unconsolidated entity is a party, under which the Company has: (1) any obligation under a guarantee contract; (2) a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity, or market risk support to that entity for such assets; (3) any obligation under certain derivative instruments; or (4) any obligation under a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to the Company, or engages in leasing, hedging, or research and development services with the Company. The following table sets forth our off-balance-sheet lending commitments as of March 31, 2026: Amount of Commitment Expiration per Period (Dollars in thousands) Total Committed Amount Less than One Year One to Three Years Three to Five Years After Five Years Off-balance sheet commitments Commitments to extend credit $ 1,134,524 $ 490,422 $ 439,361 $ 60,780 $ 143,961 Standby letters of credit 19,805 13,796 5,009 1,000 - Total off-balance sheet commitments $ 1,154,329 $ 504,218 $ 444,370 $ 61,780 $ 143,961 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. Additionally, the Company maintains an allowance for credit losses for unfunded loan commitments, which totaled $3.3 million at March 31, 2026 and December 31, 2025. 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 March 31, 2026 had maturity dates ranging from 1 to 48 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. Liquidity The ability to have readily available funds sufficient to repay maturing and non-maturing liabilities is of primary importance to depositors, creditors and regulators. In an effort to satisfy our liquidity needs, we actively manage our assets and liabilities. We have access to immediate liquid resources in the form of cash, which totaled $384.2 million, or 6.6% of total assets, as of March 31, 2026. The majority of cash is on deposit with the FRB and amounted to $318.1 million. 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. Our diversified deposit portfolio has historically provided us with a long-term source of stable low-cost funding. Maturities and payments on outstanding loans and investment securities also provide a steady flow of funds. Our liquidity, represented by cash borrowing lines, federal funds and available-for-sale securities, is a result of our operating, investing and financing activities and related cash flows. In order to ensure funds are available at all times, we devote resources to projecting the amount of funds that will be required and we maintain relationships with a diversified client base. Liquidity requirements can also be met through short-term borrowings or the disposition of short-term assets. We actively monitor our liquidity on a daily basis and manage our liquidity and overall balance sheet positions through both our management and Board-level Asset and Liability Management committees (“ALCO”), which meet regularly during the year. 53 Table of Contents We had the following borrowing lines available at March 31, 2026: March 31, 2026 (Dollars in thousands) Total Credit Line Limit Outstanding Amount Remaining Credit Line Available Value of Collateral Pledged Additional liquidity sources: Federal Reserve BIC $ 1,149,879 $ - $ 1,149,879 $ 1,426,681 Federal Home Loan Bank 933,637 - 933,637 1,206,242 US Bank Fed Funds 65,000 - 65,000 - PCBB Fed Funds 50,000 - 50,000 - FHLB Fed Funds 18,000 - 18,000 - Total additional liquidity sources $ 2,216,516 $ - $ 2,216,516 $ 2,632,923 We continued our focus on maintaining a strong liquidity position throughout the first three months of 2026, and we believe our liquid assets and short-term borrowing credit lines are adequate to meet our cash flow needs for loan and lease funding and deposit cash withdrawals for the foreseeable future. As of March 31, 2026, we had $1.2 billion in internal sources of liquidity comprised of $384.2 million in cash and $829.0 million unencumbered investment securities, which represented in the aggregate 20.8% of total assets. We also had $2.2 billion in external sources of liquidity as outlined in the table above, bringing our total available liquidity to $3.4 billion at March 31, 2026. Our pledged collateral on short-term borrowing lines is comprised of $2.6 billion in loans and $1.3 million in investment securities held at market value at March 31, 2026. We have the option of either borrowing on our credit lines or selling these investment securities for cash flow needs. 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 assets. Further, we can increase liquidity by soliciting higher levels of deposit accounts through promotional activities and/or borrowing from our correspondent banks as well as the Federal Reserve and FHLB. At the current time, our long-term liquidity needs primarily relate to funds required to support loan and lease originations and commitments and deposit withdrawals. We believe we can meet all of these needs from existing liquidity sources. Our liquidity is comprised of three primary classifications: cash flows from or used in operating activities; cash flows from or used in investing activities; and cash flows from or used in financing activities. Net cash provided by or used in operating activities has consisted primarily of net income adjusted for certain non-cash income and expense items such as the credit loss provision, investment and other amortization and depreciation. Our net cash provided by operating activities for the first three months of 2026 was $40.7 million, driven by net income of $24.1 million. Our primary investing activities are the origination of loans and leases and purchases and sales of investment securities. Net cash provided by investing activities was $70.4 million during the first three months of 2026, driven by $52.0 million in proceeds from maturities, calls, and pay downs of investment securities and a net decrease in loans and leases of $32.2 million offset by $10.0 million decrease of premises and equipment. Net cash provided by financing activities totaled $128.3 million in the first three months of 2026, driven by an increase in deposits of $138.4 million partially offset by a restricted stock vesting distribution of $6.3 million and $3.7 million in cash dividends paid to shareholders. 54 Table of Contents