FARMERS & MERCHANTS BANCORP 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __ _____ Commission File Number: 000-26099 FARMERS & MERCHANTS BANCORP (Exact name of registrant as specified in its charter) Delaware 94-3327828 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 111 W. Pine Street , Lodi , California 95240 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code ( 209 ) 367-2300 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered None Not Applicable Not Applicable Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Y es ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Y es ☐ No ☒ As of July 31, 2026, the registrant had 691,944 shares of common stock, $0.01 par value per share, outstanding. FARMERS & MERCHANTS BANCORP FORM 10-Q TABLE OF CONTENTS PART I. - FINANCIAL INFORMATION Page Item 1 - Consolidated Financial Statements (Unaudited) Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Changes in Shareholders’ Equity 6 Consolidated Statements of Cash Flows 7 Notes to Consolidated Financial Statements 8 Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 58 Item 4 - Controls and Procedures 60 PART II. - OTHER INFORMATION Item 1 – Legal Proceedings 60 Item 1A – Risk Factors 60 Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 60 Item 3 – Defaults Upon Senior Securities 61 Item 4 – Mine Safety Disclosures 61 Item 5 – Other Information 61 Item 6 – Exhibits 61 Signatures 62 2 Table of Contents PART 1. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) FARMERS & MERCHANTS BANCORP CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share amounts) June 30, 2026 December 31, 2025 ASSETS Cash and due from banks $ 92,632 $ 60,622 Interest-bearing deposits with banks 186,009 84,242 Total cash and cash equivalents 278,641 144,864 Securities available-for-sale, amortized cost $ 948,141 and $ 955,203 respectively 932,778 951,154 Securities held-to-maturity, fair value $ 568,644 and $ 592,736 , respectively 696,464 718,641 Allowance for credit losses - securities held-to-maturity ( 450 ) ( 450 ) Total investment securities 1,628,792 1,669,345 Non-marketable securities 15,549 15,549 Loans and leases held for investment, net of unearned income 3,703,857 3,648,945 Allowance for credit losses - loans and leases ( 77,253 ) ( 76,375 ) Loans held for investment, net 3,626,604 3,572,570 Bank-owned life insurance 77,914 76,614 Premises and equipment, net 67,270 55,847 Deferred income tax assets and income taxes receivevable 27,521 38,775 Accrued interest receivable 28,807 29,996 Goodwill 11,183 11,183 Other intangibles 922 1,165 Other real estate owned 1,015 - Other assets 71,241 74,202 Total Assets $ 5,835,459 $ 5,690,110 LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits: Non-interest bearing $ 1,596,642 $ 1,642,119 Interest-bearing: Demand 893,360 802,352 Savings and money market 1,859,920 1,790,274 Certificates of deposit 743,041 743,081 Total interest-bearing 3,496,321 3,335,707 Total deposits 5,092,963 4,977,826 Subordinated debentures 10,310 10,310 Interest payable and other liabilities 53,169 56,460 Total Liabilities 5,156,442 5,044,596 COMMITMENTS AND CONTINGENCIES (Note 12) SHAREHOLDERS’ EQUITY Preferred shares, no par value, 1,000,000 shares authorized and none issued or outstanding - - Common shares, $ 0.01 par value, 7,500,000 authorized, 722,840 and 728,560 issued and 691,944 and 697,904 outstanding at June 30, 2026 and December 31, 2025, respectively 7 7 Additional paid-in capital 11,856 11,550 Retained earnings 710,694 669,262 Accumulated other comprehensive loss, net of taxes ( 11,468 ) ( 3,512 ) Treasury stock, at cost; 30,896 shares at June 30, 2026 and 30,656 shares at December 31, 2025 ( 32,072 ) ( 31,793 ) TOTAL SHAREHOLDERS’ EQUITY 679,017 645,514 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 5,835,459 $ 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 June 30, Six Months Ended June 30, (Dollars in thousands, except share and per share amounts) 2026 2025 2026 2025 Interest income Interest and fees on loans and leases $ 55,707 $ 54,839 $ 110,389 $ 108,874 Interest and dividends on investment securities 14,926 11,036 30,670 21,498 Interest on deposits with others 1,845 4,186 3,129 6,827 Total interest income 72,478 70,061 144,188 137,199 Interest expense Deposits 14,951 15,999 29,582 29,804 Subordinated debentures 177 194 353 386 Total interest expense 15,128 16,193 29,935 30,190 Net interest income 57,350 53,868 114,253 107,009 Provision for credit losses 500 1,400 1,000 1,700 Net interest income after provision for credit losses 56,850 52,468 113,253 105,309 Non-interest income Card processing 1,888 1,789 3,622 3,456 Service charges on deposit accounts 793 744 1,612 1,516 Increase in cash surrender value of BOLI 662 627 1,300 1,230 Net gain on sale of securities available-for-sale 45 - 45 - Net gain on deferred compensation benefits - 764 - 1,597 Other 1,648 1,595 3,616 2,741 Total non-interest income 5,036 5,519 10,195 10,540 Non-interest expense Salaries and employee benefits 19,220 18,432 39,653 35,576 Data processing 1,798 1,784 3,662 3,422 Occupancy 1,318 1,293 2,561 2,595 Deposit insurance 837 750 1,677 1,498 Professional services 1,596 694 2,735 1,616 Marketing 412 452 990 919 Net gain on deferred compensation benefits - 764 - 1,597 Other 2,959 2,482 6,040 4,937 Total non-interest expense 28,140 26,651 57,318 52,160 INCOME BEFORE INCOME TAXES 33,746 31,336 66,130 63,689 Income tax expense 9,014 8,281 17,327 17,625 NET INCOME $ 24,732 $ 23,055 $ 48,803 $ 46,064 Earnings per common share: Basic $ 36.77 $ 33.06 $ 72.68 $ 65.94 Diluted $ 36.39 $ 32.94 $ 71.46 $ 65.80 Weighted average number of common shares Basic 672,666 697,332 671,472 698,527 Diluted 679,560 699,852 682,912 700,102 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 June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 Net income $ 24,732 $ 23,055 $ 48,803 $ 46,064 Other comprehensive income Unrealized (losses)/gains on available-for-sale securities ( 1,538 ) 1,976 ( 11,269 ) 8,935 Reclassification adjustment for gains on available-for-sale securities ( 45 ) - ( 45 ) - Amortization of unrecognized gains/(loss) on securities transferred to held-to-maturity 10 ( 3 ) 19 ( 14 ) Net unrealized (losses)/gains on securities ( 1,573 ) 1,973 ( 11,295 ) 8,921 Income tax benefit/(expense) 465 ( 583 ) 3,339 ( 2,637 ) Other comprehensive (loss)/income, net of tax ( 1,108 ) 1,390 ( 7,956 ) 6,284 Total comprehensive income $ 23,624 $ 24,445 $ 40,847 $ 52,348 See accompanying notes to the unaudited consolidated financial statements. 5 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) For the three and six months ended June 30, 2026 and 2025 (Dollars in thousands, except share and per share amounts) Common Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Treasury Shares Treasury Stock Total Balance as of March 31, 2026 723,880 $ 7 $ 8,765 $ 689,638 $ ( 10,360 ) ( 30,837 ) $ ( 31,995 ) $ 656,055 Net income - - - 24,732 - - - 24,732 Other comprehensive loss, net of tax - - - - ( 1,108 ) - - ( 1,108 ) Issuance of restricted stock awards 198 - - - - - - - Forfeiture of restricted stock awards ( 1,238 ) - - - - - - - Stock based compensation expense, net of forfeitures - - 3,091 - - - - 3,091 Cash dividends declared ($ 5.35 per share) - - - ( 3,676 ) - - - ( 3,676 ) Purchase of treasury stock - - - - - ( 59 ) ( 77 ) ( 77 ) Balance as of June 30, 2026 722,840 $ 7 $ 11,856 $ 710,694 $ ( 11,468 ) ( 30,896 ) $ ( 32,072 ) $ 679,017 Balance as of March 31, 2025 729,913 $ 7 $ 2,042 $ 614,729 $ ( 14,472 ) - $ - $ 602,306 Net income - - - 23,055 - - - 23,055 Other comprehensive income, net of tax - - - - 1,390 - - 1,390 Stock based compensation expense - - 3,150 - - - - 3,150 Cash dividends declared ($ 9.30 per share) - - - ( 6,768 ) - - - ( 6,768 ) Repurchase of common stock ( 2,191 ) - - ( 2,223 ) - - - ( 2,223 ) Purchase of treasury stock - - - - - ( 2,355 ) ( 2,378 ) ( 2,378 ) Balance as of June 30, 2025 727,722 $ 7 $ 5,192 $ 628,793 $ ( 13,082 ) ( 2,355 ) $ ( 2,378 ) $ 618,532 (Dollars in thousands, except share and per share amounts) Common Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Treasury Shares Treasury Stock Total Balance as of December 31, 2025 728,560 $ 7 $ 11,550 $ 669,262 $ ( 3,512 ) ( 30,656 ) $ ( 31,793 ) $ 645,514 Net income - - - 48,803 - - - 48,803 Other comprehensive loss, net of tax - - - - ( 7,956 ) - - ( 7,956 ) Issuance of restricted stock awards 1,366 - - - - - - - Restricted stock surrendered for tax withholdings upon vesting ( 5,470 ) - ( 6,303 ) - - - - ( 6,303 ) Forfeiture of restricted stock awards ( 1,616 ) - - - - - - - Stock based compensation expense, net of forfeitures - - 6,609 - - - - 6,609 Cash dividends declared ($ 10.45 per share) - - - ( 7,371 ) - - - ( 7,371 ) Purchase of treasury stock - - - - - ( 240 ) ( 279 ) ( 279 ) Balance as of June 30, 2026 722,840 $ 7 $ 11,856 $ 710,694 $ ( 11,468 ) ( 30,896 ) $ ( 32,072 ) $ 679,017 Balance as of December 31, 2024 699,798 $ 7 $ - $ 592,431 $ ( 19,366 ) - $ - $ 573,072 Net income - - - 46,064 - - - 46,064 Other comprehensive income, net of tax - - - - 6,284 - - 6,284 Issuance of restricted stock awards 30,818 - - - - - - - Stock based compensation expense - - 5,192 - - - - 5,192 Cash dividends declared ($ 9.30 per share) - - - ( 6,768 ) - - - ( 6,768 ) Repurchase of common stock ( 2,894 ) - - ( 2,934 ) - - - ( 2,934 ) Purchase of treasury stock - - - - - ( 2,355 ) ( 2,378 ) ( 2,378 ) Balance as of June 30, 2025 727,722 $ 7 $ 5,192 $ 628,793 $ ( 13,082 ) ( 2,355 ) $ ( 2,378 ) $ 618,532 See accompanying notes to the unaudited consolidated financial statements. 6 Table of Contents FARMERS & MERCHANTS BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, (Dollars in thousands) 2026 2025 Cash flows from operating activities: Net income $ 48,803 $ 46,064 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 1,000 1,700 Depreciation and amortization 1,539 1,530 Net accretion of securities premiums and discounts ( 2,095 ) ( 560 ) Stock based compensation expense 6,609 5,192 Increase in cash surrender value of BOLI ( 1,300 ) ( 1,230 ) Net gain on sale of OREO ( 340 ) - Decrease in deferred income taxes, net 10,990 1,125 Realized gain on sale of securities available-for-sale ( 45 ) - Net changes in: Other assets 8,075 2,943 Other liabilities 489 4,246 Net cash provided by operating activities 73,725 61,010 Cash flows from investing activities: Net (increase)/decrease in loans and leases held for investment ( 60,815 ) 54,064 Purchase of available-for-sale securities ( 78,311 ) ( 123,285 ) Purchase of held-to-maturity securities ( 2,435 ) ( 6,351 ) Proceeds from sales, maturities, calls and pay downs of available-for-sale securities 87,420 24,099 Proceeds from maturities, calls and pay downs of held-to-maturity securities 24,821 26,867 Purchase of premises and equipment ( 13,036 ) ( 3,266 ) Purchase of other investments ( 4,723 ) ( 3,441 ) Proceeds from sale of OREO 5,840 - Proceeds from sale of assets - 60 Net cash used in investing activities ( 41,239 ) ( 31,253 ) Cash flows from financing activities: Net increase in deposits 115,137 61,225 Cash dividends paid ( 7,264 ) ( 6,481 ) Restricted stock vesting distribution ( 6,303 ) - Cash used in share repurchase program - ( 2,934 ) Purchase of treasury stock ( 279 ) ( 2,378 ) Net cash provided by financing activities 101,291 49,432 Net change in cash and cash equivalents 133,777 79,189 Cash and cash equivalents, beginning of period 144,864 212,563 Cash and cash equivalents, end of period $ 278,641 $ 291,752 Supplemental disclosures of cash flow information: Cash paid for interest $ 30,853 $ 32,930 Income taxes paid $ 8 $ 10,002 Supplemental disclosures of non-cash transactions: Accrued cash dividend on restricted stock $ ( 107 ) $ ( 287 ) Net (increase)/decrease in unrealized losses on available-for-sale securities $ ( 11,314 ) $ 8,935 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 June 30, 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 interim periods within annual periods beginning after December 15, 2027 and 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 on 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: Amortized Gross Unrealized (Dollars in thousands) Cost Gains Losses Fair Value As of June 30, 2026 U.S. Government-sponsored securities $ 1,836 $ 2 $ 10 $ 1,828 Mortgage-backed securities (1) 834,003 3,447 21,846 815,604 Commercial mortgage-backed obligations (1) 1,233 16 - 1,249 Collateralized mortgage obligations (1) 20,492 - 646 19,846 Municipal securities 65,624 3,632 - 69,256 Corporate securities 24,643 96 54 24,685 Other 310 - - 310 Total available-for-sale securities $ 948,141 $ 7,193 $ 22,556 $ 932,778 (1) All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government. Amortized Gross Unrealized (Dollars in thousands) Cost Gains Losses Fair Value As of December 31, 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 June 30, 2026 Mortgage-backed securities (1) $ 567,079 $ 36 $ 117,068 $ 450,047 $ - Collateralized mortgage obligations (1) 59,669 - 10,575 49,094 - Municipal securities 69,716 745 958 69,503 450 Total held-to-maturity securities $ 696,464 $ 781 $ 128,601 $ 568,644 $ 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 municipal 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: June 30, 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 $ 284 $ 1 $ 840 $ 9 $ 1,124 $ 10 Mortgage-backed securities (1) 415,344 4,328 65,133 17,518 480,477 21,846 Collateralized mortgage obligations (1) 14,503 369 5,343 277 19,846 646 Corporate securities 4,720 54 - - 4,720 54 Total available-for-sale securities $ 434,851 $ 4,752 $ 71,316 $ 17,804 $ 506,167 $ 22,556 (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 June 30, 2026, the Company held 327 available-for-sale securities of which 51 securities were in an unrealized loss position for less than twelve months and 102 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: June 30, 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 June 30, 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 $ 5,545 $ 5,553 $ 2,609 $ 2,604 After one year through five years 20,485 20,505 18,116 18,075 After five years through ten years 49,576 51,062 17,849 17,101 After ten years 872,535 855,658 657,890 530,864 Total $ 948,141 $ 932,778 $ 696,464 $ 568,644 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. 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 12 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 2—Investment Securities—Continued 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 June 30, 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 June 30, 2026 Municipal securities $ 18,427 $ 938 $ 50,351 $ 69,716 Total $ 18,427 $ 938 $ 50,351 $ 69,716 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 Six Months Ended June 30, (Dollars in thousands) 2026 2025 Gross proceeds $ 1,374 $ 460 Gross gains 45 - Gross losses - - Pledged Securities At June 30, 2026, investment securities carried at $ 715.0 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) June 30, 2026 December 31, 2025 Loans and leases held for investment, net Real estate: Commercial $ 1,541,826 $ 1,480,906 Agricultural 692,554 705,668 Residential and home equity 404,005 405,080 Construction 115,150 128,179 Total real estate 2,753,535 2,719,833 Commercial & industrial 527,508 497,700 Agricultural 255,767 264,117 Commercial leases 180,223 181,004 Consumer and other 4,392 4,671 Total gross loans and leases 3,721,425 3,667,325 Unearned income ( 17,568 ) ( 18,380 ) Total net loans and leases 3,703,857 3,648,945 Allowance for credit losses ( 77,253 ) ( 76,375 ) Total loans and leases held for investment, net $ 3,626,604 $ 3,572,570 At June 30, 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 $ 1.3 billion, respectively. The borrowing capacity on these loans was $ 937.8 million from the FHLB and $ 1.1 billion from the FRB at June 30, 2026. The following tables show an aging analysis of the loan and lease portfolio, net of unearned income, for the periods indicated: June 30, 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 $ - $ - $ 712 $ 712 $ 1,532,944 $ 1,533,656 $ 712 Agricultural - 2,284 1,732 4,016 688,538 692,554 1,732 Residential and home equity 203 - - 203 403,802 404,005 - Construction - - - - 115,150 115,150 - Total real estate 203 2,284 2,444 4,931 2,740,434 2,745,365 2,444 Commercial & industrial - - 230 230 527,278 527,508 230 Agricultural - - - - 255,767 255,767 - Commercial leases - - - - 170,825 170,825 - Consumer and other 4 - - 4 4,388 4,392 - Total loans and leases, net $ 207 $ 2,284 $ 2,674 $ 5,165 $ 3,698,692 $ 3,703,857 $ 2,674 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 Totl 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: Three Months Ended June 30, 2026 Amortized cost associated with the following modification types: (Dollars in thousands) Maturity or term extension Payment reduction Total 2 Percentage of total loan segment Loans and leases held for investment, net Real estate: Commercial $ - $ 712 $ 712 0.05 % Agricultural - - - 0.00 % Residential and home equity - - - 0.00 % Construction - - - 0.00 % Total real estate - 712 712 0.03 % Commercial & industrial 4,087 - 4,087 0.77 % Agricultural - - - 0.00 % Commercial leases - - - 0.00 % Consumer and other - - - 0.00 % Total $ 4,087 $ 712 $ 4,799 0.13 % 1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. 2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 0 million during the three months ended June 30, 2026. During the three months ended June 30, 2026, the Company modified one commercial real estate loan with a monthly payment reduction, and two commercial & industrial loans with contractual term extensions of three months . Six Months Ended June 30, 2026 Amortized cost associated with the following modification types: (Dollars in thousands) Maturity or term extension Payment reduction Total 2 Percentage of total loan segment Loans and leases held for investment, net Real estate: Commercial $ - $ 712 $ 712 0.05 % Agricultural - - - 0.00 % Residential and home equity - - - 0.00 % Construction - - - 0.00 % Total real estate - 712 712 0.03 % Commercial & industrial 4,087 - 4,087 0.77 % Agricultural - - - 0.00 % Commercial leases - - - 0.00 % Consumer and other - - - 0.00 % Total $ 4,087 $ 712 $ 4,799 0.13 % 1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. 2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 0 million during the six months ended June 30, 2026. 16 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued During the six months ended June 30, 2026, the Company modified one commercial real estate loan with a monthly payment reduction, two commercial & industrial loans with contractual term extensions of three months and one residential loan with an interest rate reduction and a contractual term extension of ten years . The residential loan modified during the first quarter 2026 has been paid in full. During the three months ended June 30, 2025, the Company modified one $ 34,000 home equity loan with a 10 -year maturity extension and re-amortization. Six Months Ended June 30, 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 $ - $ - $ - $ - 0.000 % Agricultural 983 - 1,656 2,639 0.366 % Residential and home equity 34 - - 34 0.008 % Construction - - - - 0.000 % Total real estate 1,017 - 1,656 2,673 0.099 % Commercial & industrial - - - - 0.000 % Agricultural 43 - - 43 0.016 % Commercial leases - - - - 0.000 % Consumer and other - - - - 0.000 % Total $ 1,060 $ - $ 1,656 $ 2,716 0.075 % 1 Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications. 2 Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $ 0 million during the six months ended June 30, 2025. During the six months ended June 30, 2025, the Company modified four agricultural real estate loans and one agricultural production loan, all related to the same agricultural borrower. Two of the loans had the contractual term extended by six months and three loans had principal and interest deferrals of six months . During the six months ended June 30, 2025, the Company also modified one home equity loan with a 10 -year maturity extension and re-amortization. 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 for $ 712,000 modified within the last 12 months that had a payment default and was past due during the six months ended June 30, 2026, and one loan for $ 176,000 modified and past due that had a payment default and was 86 days past due during the six months ended June 30, 2025. 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 17 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued 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 inadequate cash flow or collateral support, a project’s lack of marketability, failure to complete construction on time or the project’s failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful — Loans or leases classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, highly questionable or improbable. Loss — Loans or leases classified as loss are considered uncollectible. Once a loan or lease becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Company will estimate its probable loss and immediately charge-off some or all of the balance. 18 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued 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: June 30, 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 $ 91,155 $ 197,201 $ 35,903 $ 95,907 $ 132,077 $ 504,142 $ 333,967 $ 142,367 $ 1,532,719 Special mention - 225 - - - - - - 225 Substandard - - - - 712 - - - 712 Total Commercial $ 91,155 $ 197,426 $ 35,903 $ 95,907 $ 132,789 $ 504,142 $ 333,967 $ 142,367 $ 1,533,656 Commercial Current-period gross charge-offs $ 75 $ - $ - $ - $ - $ - $ - $ - $ 75 Agricultural Pass $ 11,661 $ 43,525 $ 23,671 $ 33,266 $ 60,663 $ 188,784 $ 267,436 $ 49,147 $ 678,153 Special mention - 3,139 - - - 3,032 6,498 - 12,669 Substandard - - - - - - 1,732 - 1,732 Total Agricultural $ 11,661 $ 46,664 $ 23,671 $ 33,266 $ 60,663 $ 191,816 $ 275,666 $ 49,147 $ 692,554 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Residential and home equity Pass $ 18,285 $ 34,529 $ 26,442 $ 28,311 $ 48,822 $ 195,562 $ 51,498 $ 341 $ 403,790 Special mention - - - - - 12 - - 12 Substandard - - - - - - 203 - 203 Total Residential and home equity $ 18,285 $ 34,529 $ 26,442 $ 28,311 $ 48,822 $ 195,574 $ 51,701 $ 341 $ 404,005 Residential and home equity Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Construction Pass $ - $ - $ - $ - $ - $ 1,375 $ 99,875 $ 13,900 $ 115,150 Special mention - - - - - - - - - Substandard - - - - - - - - - Total construction $ - $ - $ - $ - $ - $ 1,375 $ 99,875 $ 13,900 $ 115,150 Construction Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Real estate $ 121,101 $ 278,619 $ 86,016 $ 157,484 $ 242,274 $ 892,907 $ 761,209 $ 205,755 $ 2,745,365 Commercial & industrial Pass $ 14,690 $ 36,814 $ 15,288 $ 22,478 $ 10,274 $ 15,995 $ 380,938 $ 26,183 $ 522,660 Special mention - - - - 26 - 505 4,087 4,618 Substandard - - - - - - 230 - 230 Total Commercial & industrial $ 14,690 $ 36,814 $ 15,288 $ 22,478 $ 10,300 $ 15,995 $ 381,673 $ 30,270 $ 527,508 Commercial & industrial Current-period gross charge-offs $ - $ - $ - $ 505 $ - $ - $ - $ - $ 505 19 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued June 30, 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 Agricultural Pass $ 133 $ 296 $ 2,662 $ 1,954 $ 1,572 $ 2,722 $ 236,136 $ 10,225 $ 255,700 Special mention - - - - 24 - - 43 67 Substandard - - - - - - - - - Total Agricultural $ 133 $ 296 $ 2,662 $ 1,954 $ 1,596 $ 2,722 $ 236,136 $ 10,268 $ 255,767 Agricultural Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Commercial leases Pass $ 11,460 $ 24,429 $ 27,264 $ 63,293 $ 19,928 $ 24,451 $ - $ - $ 170,825 Special mention - - - - - - - - - Substandard - - - - - - - - - Total Commercial leases $ 11,460 $ 24,429 $ 27,264 $ 63,293 $ 19,928 $ 24,451 $ - $ - $ 170,825 Commercial leases Current-period gross charge-offs $ - $ - $ - $ - $ - $ - $ - $ - $ - Consumer and other Pass $ 653 $ 1,012 $ 272 $ 416 $ 181 $ 838 $ 809 $ - $ 4,181 Special mention - - - - - - - - - Substandard 205 - - - - 6 - - 211 Total Consumer and other $ 858 $ 1,012 $ 272 $ 416 $ 181 $ 844 $ 809 $ - $ 4,392 Consumer and other Current-period gross charge-offs $ 16 $ - $ - $ - $ - $ - $ - $ - $ 16 Total net loans and leases Pass $ 148,037 $ 337,806 $ 131,502 $ 245,625 $ 273,517 $ 933,869 $ 1,370,659 $ 242,163 $ 3,683,178 Special mention - 3,364 - - 50 3,044 7,003 4,130 17,591 Substandard 205 - - - 712 6 2,165 - 3,088 Total net loans and leases $ 148,242 $ 341,170 $ 131,502 $ 245,625 $ 274,279 $ 936,919 $ 1,379,827 $ 246,293 $ 3,703,857 Total current-period gross charge-offs $ 91 $ - $ - $ 505 $ - $ - $ - $ - $ 596 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 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 21 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: (Dollars in thousands) June 30, 2026 December 31, 2025 Balance at beginning of the period $ 13,300 $ 15,626 New loans or advances during year 390 495 Effect of changes in composition of related parties - ( 80 ) Repayments ( 131 ) ( 2,741 ) Balance at end of period $ 13,559 $ 13,300 22 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: June 30, 2026 (Dollars in thousands) Real Estate Collateral dependent loans and leases Real estate: Commercial $ 712 Agricultural 4,016 Residential and home equity - Construction - Total real estate 4,728 Commercial & industrial - Agricultural - Commercial leases - Consumer and other - Total gross loans and leases $ 4,728 December 31, 2025 (Dollars in thousands) Real Estate Collateral dependent loans and leases Real estate: Commercial $ 7,998 Agricultural - Residential and home equity - Construction - Total real estate 7,998 Commercial & industrial - Agricultural - Commercial leases - Consumer and other - Total gross loans and leases $ 7,998 23 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued Allowance for Credit Losses The allowance for credit losses (“ACL”) is the combination of the allowance for credit losses for loan and lease losses and the allowance for credit losses for unfunded loan commitments. The ACL for unfunded loan commitments is included within “Interest payable and other liabilities” on the consolidated balance sheets. The following tables present a summary of the activity in the ACL for loan and lease losses and the ACL for unfunded loan commitments for the periods indicated: For the Three Months Ended June 30, 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 $ 76,918 $ 3,300 $ 80,218 $ 75,423 $ 2,690 $ 78,113 Provision for credit losses 500 - 500 1,290 110 1,400 Charge-offs ( 588 ) - ( 588 ) ( 569 ) - ( 569 ) Recoveries 423 - 423 25 - 25 Net charge-offs ( 165 ) - ( 165 ) ( 544 ) - ( 544 ) Balance at end of period $ 77,253 $ 3,300 $ 80,553 $ 76,169 $ 2,800 $ 78,969 For the Six Months Ended June 30, 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 1,000 - 1,000 1,590 110 1,700 Charge-offs ( 596 ) - ( 596 ) ( 842 ) - ( 842 ) Recoveries 474 - 474 138 - 138 Net charge-offs ( 122 ) - ( 122 ) ( 704 ) - ( 704 ) Balance at end of period $ 77,253 $ 3,300 $ 80,553 $ 76,169 $ 2,800 $ 78,969 Changes in the ACL on loans and leases for the periods indicated are as follows: For the Three Months Ended June 30, 2026 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 21,935 $ 1,108 $ ( 75 ) $ 11 $ 22,979 Agricultural 22,481 451 - 75 23,007 Residential and home equity 7,480 165 - 19 7,664 Construction 2,846 ( 757 ) - - 2,089 Total real estate 54,742 967 ( 75 ) 105 55,739 Commercial & industrial 9,100 ( 266 ) ( 505 ) 317 8,646 Agricultural 7,173 ( 150 ) - - 7,023 Commercial leases 5,682 ( 64 ) - - 5,618 Consumer and other 221 13 ( 8 ) 1 227 Total allowance for credit losses $ 76,918 $ 500 $ ( 588 ) $ 423 $ 77,253 24 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 3—Loans and Leases—Continued For the Three Months Ended June 30, 2025 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 20,313 $ 808 $ ( 175 ) $ - $ 20,946 Agricultural 24,077 572 ( 180 ) - 24,469 Residential and home equity 7,479 118 - 2 7,599 Construction 2,648 118 - - 2,766 Total real estate 54,517 1,616 ( 355 ) 2 55,780 Commercial & industrial 7,843 ( 534 ) - 17 7,326 Agricultural 6,417 765 ( 200 ) - 6,982 Commercial leases 6,429 ( 571 ) - - 5,858 Consumer and other 217 14 ( 14 ) 6 223 Total allowance for credit losses $ 75,423 $ 1,290 $ ( 569 ) $ 25 $ 76,169 For the Six Months Ended June 30, 2026 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 22,574 $ 470 $ ( 75 ) $ 10 $ 22,979 Agricultural 23,647 ( 716 ) - 76 23,007 Residential and home equity 7,620 1 - 43 7,664 Construction 2,311 ( 222 ) - - 2,089 Total real estate 56,152 ( 467 ) ( 75 ) 129 55,739 Commercial & industrial 7,355 1,467 ( 505 ) 329 8,646 Agricultural 6,760 263 - - 7,023 Commercial leases 5,861 ( 243 ) - - 5,618 Consumer and other 247 ( 20 ) ( 16 ) 16 227 Total allowance for credit losses $ 76,375 $ 1,000 $ ( 596 ) $ 474 $ 77,253 For the Six Months Ended June 30, 2025 (Dollars in thousands) Balance at beginning of period Provision for/(recapture of) credit losses Charge-Offs Recoveries Balance at end of period Allowance for credit losses: Real estate: Commercial $ 20,382 $ 739 $ ( 175 ) $ - $ 20,946 Agricultural 23,615 1,034 ( 180 ) - 24,469 Residential and home equity 7,340 253 - 6 7,599 Construction 3,055 ( 289 ) - - 2,766 Total real estate 54,392 1,737 ( 355 ) 6 55,780 Commercial & industrial 7,791 ( 356 ) ( 232 ) 123 7,326 Agricultural 6,725 491 ( 234 ) - 6,982 Commercial leases 6,153 ( 295 ) - - 5,858 Consumer and other 222 13 ( 21 ) 9 223 Total allowance for credit losses $ 75,283 $ 1,590 $ ( 842 ) $ 138 $ 76,169 25 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 4—Other Real Estate Owned OREO was $ 1.0 million at June 30, 2026 compared to zero at December 31, 2025. OREO includes property no longer utilized for business operations and property acquired through foreclosure proceedings. Note 5—Deposits Certificates of deposit greater than and less than or equal to the FDIC insurance limit of $250,000 are summarized as follows: (Dollars in thousands) June 30, 2026 December 31, 2025 Certificates of deposit: Certificates of deposit less than or equal to $250,000 $ 342,040 $ 344,818 Certificates of deposit greater than $250,000 401,001 398,263 Total certificates of deposit $ 743,041 $ 743,081 Scheduled maturities for certificates of deposit are as follows for the years ending December 31: (Dollars in thousands) Amount 2026 $ 569,958 2027 167,398 2028 3,007 2029 2,084 2030 351 Thereafter 243 Total certificates of deposit $ 743,041 Overdrawn deposit balances of $ 201,000 and $ 187,000 were classified as consumer loans at June 30, 2026 and December 31, 2025, respectively. Note 6—Short-term borrowings As of June 30, 2026 and December 31, 2025, committed lines of credit arrangements totaling $ 2.1 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 as of June 30, 2026, had a borrowing capacity and a committed credit line of $ 938.9 million, which was secured by $ 1.4 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 4.00 % as of June 30, 2026. The Company has $ 1.3 billion in pledged loans with the FRB. As of June 30, 2026, the Company’s overnight borrowing capacity using the primary credit facilities from the Fed account was $ 1.1 billion. The borrowing rate was 3.63 % as of June 30, 2026. The Company has an unsecured borrowing capacity from unaffiliated banks of $ 133.0 million as of June 30, 2026. There were no outstanding advances on the above borrowing facilities as of June 30, 2026 or December 31, 2025. 26 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value The Company uses fair value measurements to record fair value adjustments to certain financial and non-financial assets and liabilities and to determine fair value disclosures. Various financial instruments such as available-for-sale securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets and liabilities on a non-recurring basis, such as collateral dependent loans and other real estate owned. These non-recurring fair value adjustments typically involve lower of cost or fair value accounting or write-down of individual assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value. For accounting disclosure purposes, a three-level valuation hierarchy of fair value measurements has been established. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 – inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. • Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds). • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company’s best information and assumptions that a market participant would consider. The carrying amounts and estimated fair values of financial instruments held by the Company are set forth below. Fair value estimates are made at a specific point in time based on relevant market information. They do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for many of the Company’s financial instruments, fair value estimates are based on judgements regarding future expected loss experience, risk characteristics and economic conditions. These estimates are subjective, involve uncertainties, and cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Management monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities or total earnings. Securities classified as available-for-sale are reported at fair value on a recurring basis utilizing Level 1, 2 and 3 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. 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. 27 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The Company does not record all loans and leases at fair value on a recurring basis. However, from time to time, a loan or lease is considered collateral dependent and an allowance for credit losses is established. Once a loan or lease is identified as collateral dependent, management measures specific reserves in accordance with 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. 28 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. June 30, 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 $ 1,828 $ - $ 1,828 $ - $ 1,828 Mortgage-backed securities 815,604 - 815,604 - 815,604 Commercial mortgage-backed securities 1,249 - 1,249 - 1,249 Collateralized mortgage obligations 19,846 - 19,846 - 19,846 Municipal securities 69,256 - 69,256 - 69,256 Corporate securities 24,685 - 24,685 - 24,685 Other 310 - 310 - 310 Other equity investments $ 3,654 $ 3,654 $ - $ - $ 3,654 Fair valued on a non-recurring basis: Other real estate owned $ - $ - $ - $ 1,015 $ 1,015 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 29 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 7—Fair Value—Continued The following tables summarize the carrying amount and estimated fair values of the Company’s financial assets and liabilities not carried at fair value, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. June 30, 2026 Fair Value Measurements (Dollars in thousands) Carrying Amount Level 1 Level 2 Level 3 Total Fair Value Financial assets: Cash and cash equivalents $ 278,641 $ 278,641 $ - $ - $ 278,641 Held-to-maturity securities, net 696,014 - 518,552 50,092 568,644 Non-marketable securities, at cost 15,549 - 15,549 - 15,549 Loans and leases, net 3,626,604 - - 3,638,096 3,638,096 Financial liabilities: Total deposits $ 5,092,963 $ - $ 5,089,400 $ - $ 5,089,400 Subordinated debentures 10,310 - 10,600 - 10,600 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. 30 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 8—Earnings Per Share Basic earnings per common share is computed by dividing net earnings allocated to common shareholders by the weighted average number of common shares outstanding during the applicable period. Diluted earnings per common share is computed using the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effects of outstanding restricted stock awards using the treasury stock method. Shares are excluded from the computations of diluted earnings per common share when their inclusion has an anti-dilutive effect. For the three and six months ended June 30, 2026, there were no potential common shares that were anti-dilutive. The following tables present the factors used in the earnings per common share computation for the periods indicated: Three Months Ended June 30, (Dollars in thousands, except share and per share amounts) 2026 2025 Net income $ 24,732 $ 23,055 Weighted average common shares outstanding for basic earnings per common share 672,666 697,332 Dilutive potential common shares 6,894 2,520 Shares used in computing diluted earnings per common share 679,560 699,852 Basic earnings per common share $ 36.77 $ 33.06 Diluted earnings per common share $ 36.39 $ 32.94 Six Months Ended June 30, (Dollars in thousands, except share and per share amounts) 2026 2025 Net income $ 48,803 $ 46,064 Weighted average common shares outstanding for basic earnings per common share 671,472 698,527 Dilutive potential common shares 11,440 1,575 Shares used in computing diluted earnings per common share 682,912 700,102 Basic earnings per common share $ 72.68 $ 65.94 Diluted earnings per common share $ 71.46 $ 65.80 31 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 9—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 six months ended June 30, 2026 and 2025 due to the termination of the Plans. The Company’s carrying value of the liability under the Plans for certain participants with different liquidation payout provisions was $ 2.4 million as of June 30, 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 June 30, 2026 and December 31, 2025 totaled 1,014 and 1,073 shares with a historical cost basis of $ 1.0 million and $ 1.1 million, respectively. All amounts were fully funded into the Rabbi Trust as of June 30, 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 $ 1.6 million at June 30, 2025. Balances in non-qualified deferred compensation plans may be invested in financial instruments the market value of which fluctuates based upon trends in interest rates and stock prices. Note 10—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 of Company common stock 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, of Company common stock 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 award at the grant date 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 are 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 71,500 at June 30, 2026; included in the number is 1,616 shares forfeited during 2026 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. The Company had 19,312 and 30,818 unvested restricted shares outstanding as of June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, the Company recognized $ 6.6 million in compensation cost related to shares granted under the 2025 Plan and $ 5.2 million for the six months ended June 30, 2025. As of June 30, 2026, there was $ 14.5 million of total unrecognized compensation cost related to unvested shares granted under the 2025 Plan and $ 23.9 million for the six months ended June 30, 2025. The remaining cost is expected to be recognized over a weighted-average period of 1.10 years. 32 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 11—Derivatives Derivatives Not Designated as Hedging Instruments As a customer accommodation, the Company may enter into interest 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. June 30, 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 $ - $ - $ 8,715 $ 172 Total included in other assets $ - $ 172 Derivatives not designated as hedging instruments: Interest rate swaps related to customer loans $ - $ - $ 8,715 $ 178 Total included in other liabilities $ - $ 178 Location of Gain or (Loss) Recognized in Income on Derivatives Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 Derivatives not designated as hedging instruments: Interest rate swaps related to loan customers Other (expense) income $ 8 $ ( 2 ) $ 6 $ ( 12 ) Total $ 8 $ ( 2 ) $ 6 $ ( 12 ) Note 12—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) June 30, 2026 December 31, 2025 Commitments to extend credit, including unsecured commitments of $ 21,566 and $ 20,995 as of June 30, 2026 and December 31, 2025, respectively $ 1,112,922 $ 1,049,468 Stand-by letters of credit, including unsecured commitments of $ 5,579 and $ 5,248 as of June 30, 2026 and December 31, 2025, respectively 21,238 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 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 June 30, 2026 and December 31, 2025. 33 Table of Contents FARMERS & MERCHANTS BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 12—Commitments and Contingencies—Continued Standby letters of credit are conditional commitments issued by the Company to guarantee performance of or payment for a customer to a third-party. Outstanding standby letters of credit at June 30, 2026 had maturity dates ranging from 1 to 45 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 June 30, 2026 and December 31, 2025, the balance of the investments in LIHTC was $ 42.9 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 $ 12.9 million and $ 16.8 million at June 30, 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 six months ended June 30, 2026 and 2025, the Company recognized tax credits from its investments in LIHTC of $ 2.9 million and $ 2.6 million, respectively. In the ordinary course of business, the Company becomes involved in litigation arising out of its normal business activities. Management, after consultation with legal counsel, believes that the ultimate liability, if any, resulting from the disposition of such claims would not be material in relation to the financial position of the Company. The Company may be required to maintain average reserves on deposit with the FRB primarily based on deposits outstanding. Reserve requirements are offset by the Company’s vault cash and deposit balances maintained with the FRB. Note 13—Subsequent Events In accordance with ASC Topic 855, “ Subsequent Events ”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2026 up through the date the Company issued the financial statements. During this period, there were no subsequent events that required recognition or disclosure. 34 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). 35 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 110 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, Rio Vista, 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 June 30, 2026, consisted of 691,944 shares of common stock, $0.01 par value. No shares of preferred stock were issued or outstanding as of June 30, 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. 36 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 June 30, December 31, June 30, Tangible Book Value Per Common Share 2026 2025 2025 (Dollars in thousands, except share and per share amounts) Shareholders’ equity $ 679,017 $ 645,514 $ 618,532 Less: Intangible assets 12,105 12,348 12,609 Tangible common equity $ 666,912 $ 633,166 $ 605,923 Total assets $ 5,835,459 $ 5,690,110 $ 5,478,773 Less: Intangible assets 12,105 12,348 12,609 Tangible assets $ 5,823,354 $ 5,677,762 $ 5,466,164 Tangible common equity ratio (1) 11.45 % 11.15 % 11.08 % Book value per common share (2) $ 981.32 $ 924.93 $ 852.72 Tangible book value per common share (3) $ 963.82 $ 907.24 $ 835.33 Common shares outstanding 691,944 697,904 725,367 (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. 37 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- and six-month periods ended June 30, 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 Six Months Ended June 30, June 30, (Dollars in thousands, except share and per share amounts) 2026 2025 2026 2025 Earnings Summary: Interest income $ 72,478 $ 70,061 $ 144,188 $ 137,199 Interest expense 15,128 16,193 29,935 30,190 Net interest income 57,350 53,868 114,253 107,009 Provision for credit losses 500 1,400 1,000 1,700 Non-interest income 5,036 5,519 10,195 10,540 Non-interest expense 28,140 26,651 57,318 52,160 Income before taxes 33,746 31,336 66,130 63,689 Income tax expense 9,014 8,281 17,327 17,625 Net Income $ 24,732 $ 23,055 $ 48,803 $ 46,064 Per Common Share Data: Basic earnings per common share $ 36.77 $ 33.06 $ 72.68 $ 65.94 Diluted earnings per common share $ 36.39 $ 32.94 $ 71.46 $ 65.80 Book value per common share $ 981.32 $ 852.72 $ 981.32 $ 852.72 Tangible book value per common share (1) $ 963.82 $ 835.33 $ 963.82 $ 835.33 Performance Ratios: Return on average assets 1.71 % 1.65 % 1.70 % 1.67 % Return on average equity 14.84 % 15.09 % 14.75 % 15.37 % Net interest margin (tax equivalent) 4.20 % 4.07 % 4.22 % 4.13 % Yield on average loans and leases (tax equivalent) 6.11 % 6.08 % 6.10 % 6.07 % Cost of average total deposits 1.19 % 1.31 % 1.19 % 1.25 % Efficiency ratio 45.11 % 44.88 % 46.06 % 44.37 % Loan-to-deposit ratio 73.07 % 76.38 % 73.07 % 76.38 % Percentage of checking deposits to total deposits 48.89 % 49.23 % 48.89 % 49.23 % Capital Ratios Bancorp: Common equity tier 1 capital to risk-weighted assets 14.56 % 13.88 % 14.56 % 13.88 % Tier 1 capital to risk-weighted assets 14.78 % 14.10 % 14.78 % 14.10 % Risk-based capital to risk-weighted assets 16.04 % 15.36 % 16.04 % 15.36 % Tier 1 leverage capital ratio 11.68 % 11.18 % 11.68 % 11.18 % Tangible common equity ratio (1) 11.45 % 11.08 % 11.45 % 11.08 % (1) See “Non-GAAP Measurements” 38 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 June 30, 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 $ 201,313 $ 1,845 3.68 % $ 377,508 $ 4,186 4.45 % Investment securities: (1) Taxable securities 1,579,879 13,438 3.40 % 1,248,191 10,070 3.23 % Non-taxable securities (2) 62,700 1,825 11.64 % 67,778 807 4.76 % Total investment securities 1,642,579 15,263 3.72 % 1,315,969 10,877 3.31 % Loans: (3) Real estate: Commercial 1,520,803 21,837 5.76 % 1,380,327 18,744 5.45 % Agricultural 689,736 9,743 5.67 % 731,987 10,401 5.70 % Residential and home equity 403,275 5,196 5.17 % 397,304 4,944 4.99 % Construction 125,249 2,226 7.13 % 180,327 3,130 6.96 % Total real estate 2,739,063 39,002 5.71 % 2,689,945 37,219 5.55 % Commercial & industrial 485,527 8,708 7.19 % 491,802 9,220 7.52 % Agricultural 261,967 4,841 7.41 % 261,834 5,201 7.97 % Commercial leases 165,919 3,081 7.45 % 170,246 3,108 7.32 % Consumer and other 4,655 75 6.46 % 5,202 91 7.02 % Total loans and leases 3,657,131 55,707 6.11 % 3,619,029 54,839 6.08 % Non-marketable securities 15,549 26 0.67 % 15,549 318 8.20 % Total interest earning assets 5,516,572 72,841 5.30 % 5,328,055 70,220 5.29 % Allowance for credit losses (77,350 ) (76,273 ) Non-interest earning assets 339,287 352,747 Total average assets $ 5,778,509 $ 5,604,529 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing deposits: Demand $ 803,510 $ 661 0.33 % $ 977,831 $ 3,031 1.24 % Savings and money market accounts 1,894,375 8,452 1.79 % 1,725,194 7,423 1.73 % Certificates of deposit greater than $250,000 441,696 3,529 3.20 % 379,973 3,270 3.45 % Certificates of deposit equal to or less than $250,000 343,697 2,309 2.69 % 324,743 2,275 2.81 % Total interest bearing deposits 3,483,278 14,951 1.72 % 3,407,741 15,999 1.88 % Subordinated debentures 10,310 177 6.89 % 10,310 194 7.55 % Total interest bearing liabilities 3,493,588 15,128 1.74 % 3,418,051 16,193 1.90 % Non-interest bearing deposits 1,559,453 1,481,260 Total funding 5,053,041 15,128 1.20 % 4,899,311 16,193 1.33 % Other non-interest bearing liabilities 58,634 94,251 Shareholders’ equity 666,834 610,967 Total average liabilities and shareholders’ equity $ 5,778,509 $ 5,604,529 Net interest income and margin (4) $ 57,713 4.20 % $ 54,027 4.07 % Interest rate spread 3.56 % 3.39 % Tax equivalent adjustment (363 ) (159 ) Net interest income $ 57,350 4.17 % $ 53,868 4.06 % (1) Excludes average unrealized losses of $14.6 million and $21.5 million for the three months ended June 30, 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 $2.5 million and $1.8 million for the three months ended June 30, 2026 and 2025, respectively. (4) Net interest margin is computed by dividing net interest income by average interest earning assets. 39 Table of Contents For the Six Months Ended June 30, 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 $ 173,824 $ 3,129 3.63 % $ 307,679 $ 6,827 4.47 % Investment securities: (1) Taxable securities 1,586,018 26,924 3.40 % 1,232,261 19,534 3.17 % Non-taxable securities (2) 62,755 3,648 11.62 % 67,175 1,592 4.74 % Total investment securities 1,648,773 30,572 3.71 % 1,299,436 21,126 3.25 % Loans: (3) Real estate: Commercial 1,504,587 42,414 5.68 % 1,365,051 36,550 5.40 % Agricultural 690,309 19,540 5.71 % 734,902 21,386 5.87 % Residential and home equity 403,490 10,322 5.16 % 397,995 9,775 4.95 % Construction 127,266 4,492 7.12 % 182,219 6,152 6.81 % Total real estate 2,725,652 76,768 5.68 % 2,680,167 73,863 5.56 % Commercial & industrial 493,027 17,489 7.15 % 493,260 18,090 7.40 % Agricultural 260,651 9,772 7.56 % 265,037 10,465 7.96 % Commercial leases 167,706 6,206 7.46 % 172,035 6,280 7.36 % Consumer and other 4,985 154 6.23 % 5,125 176 6.93 % Total loans and leases 3,652,021 110,389 6.10 % 3,615,624 108,874 6.07 % Non-marketable securities 15,549 824 10.69 % 15,549 686 8.90 % Total interest earning assets 5,490,167 144,914 5.32 % 5,238,288 137,513 5.29 % Allowance for credit losses (77,090 ) (76,072 ) Non-interest earning assets 342,034 349,250 Total average assets $ 5,755,111 $ 5,511,466 LIABILITIES AND SHAREHOLDERS’ EQUITY Interest bearing deposits: Demand $ 795,561 $ 1,228 0.31 % $ 917,085 $ 3,572 0.79 % Savings and money market accounts 1,887,885 16,762 1.79 % 1,693,889 14,756 1.76 % Certificates of deposit greater than $250,000 429,742 6,918 3.25 % 383,185 6,788 3.57 % Certificates of deposit equal to or less than $250,000 343,379 4,674 2.74 % 326,255 4,688 2.90 % Total interest bearing deposits 3,456,567 29,582 1.73 % 3,320,414 29,804 1.81 % Short-term borrowings 1 - 0.00 % 1 - 0.00 % Subordinated debentures 10,310 353 6.90 % 10,310 386 7.55 % Total interest bearing liabilities 3,466,878 29,935 1.74 % 3,330,725 30,190 1.83 % Non-interest bearing deposits 1,568,916 1,489,725 Total funding 5,035,794 29,935 1.20 % 4,820,450 30,190 1.26 % Other non-interest bearing liabilities 57,783 91,592 Shareholders’ equity 661,534 599,424 Total average liabilities and shareholders’ equity $ 5,755,111 $ 5,511,466 Net interest income and margin (4) $ 114,979 4.22 % $ 107,323 4.13 % Interest rate spread 3.58 % 3.47 % Tax equivalent adjustment (726 ) (314 ) Net interest income $ 114,253 4.20 % $ 107,009 4.12 % (1) Excludes average unrealized losses of $8.3 million and $22.3 million for the six months ended June 30, 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 $4.7 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively. (4) Net interest margin is computed by dividing net interest income by average interest earning assets. 40 Table of Contents Second Quarter 2026 vs. Second Quarter 2025 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 3.68% and 4.45% for the second quarter of 2026 and 2025, respectively. The decrease was primarily the result of the Federal Open Market Committee (“FOMC”) decreasing rates by 75 basis points from September 2025 to December 2025. Average interest-bearing deposits with banks was $201.3 million and $377.5 million for the quarter ended June 30, 2026 and 2025, respectively. Interest income on interest bearing deposits with banks was $1.8 million and $4.2 million for the quarter ended June 30, 2026 and 2025, respectively. 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 $1.6 billion and $1.3 billion for the quarter ended June 30, 2026 and 2025, respectively. The average tax equivalent yield on total investment securities was 3.72% and 3.31% for the quarter ended June 30, 2026 and 2025, respectively. The increase in the yield reflects the increase in yields on purchases in 2025 and during the quarter ended June 30, 2026. Average loans and leases held for investment were $3.7 billion and $3.6 billion for the quarter ended June 30, 2026 and 2025, respectively. The average yield on the loan and lease portfolio was 6.11% and 6.08% for the quarter ended June 30, 2026 and 2025, respectively. Average interest-bearing deposits were $3.5 billion and $3.4 billion for the quarter ended June 30, 2026 and 2025, respectively. The average rate paid on interest bearing deposits was 1.72% and 1.88% for the quarter ended June 30, 2026 and 2025, respectively. Total interest expense on interest bearing deposits was $15.0 million and $16.0 million for the quarter ended June 30, 2026 and 2025, respectively, with the decrease driven by decreases in short-term market interest rates from September 2025 to December 2025. The average rate paid on total funding costs was 1.20% and 1.33% for the quarter ended June 30, 2026 and 2025, respectively. Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025 Average interest-bearing deposits with banks consisted primarily of FRB deposits. Balances with the FRB earned an average interest rate of 3.63% and 4.47% for the first six months of 2026 and 2025, respectively. The decrease was primarily the result of the FOMC decreasing rates by 75 basis points from September 2025 to December 2025. Average interest-bearing deposits with banks was $173.8 million and $307.7 million for the six months ended June 30, 2026 and 2025, respectively. Interest income on interest bearing deposits with banks was $3.1 million and $6.8 million for the six months ended June 30, 2026 and 2025, respectively. Average total investment securities were $1.6 billion and $1.3 billion for the six months ended June 30, 2026 and 2025, respectively. The average tax equivalent yield on total investment securities was 3.71% and 3.25% for the six months ended June 30, 2026 and 2025, respectively. The increase in the yield reflects the increase in yields on purchases in 2025 and during the six months ended June 30, 2026. Average loans and leases held for investment were $3.7 billion and $3.6 billion for the six months ended June 30, 2026 and 2025, respectively. The average yield on the loan and lease portfolio was 6.10% and 6.07% for the six months ended June 30, 2026 and 2025, respectively. 41 Table of Contents Average interest-bearing deposits were $3.5 billion and $3.3 billion for the six months ended June 30, 2026 and 2025, respectively. The average rate paid on interest bearing deposits was 1.73% and 1.81% for the six months ended June 30, 2026 and 2025, respectively, with the decrease driven by decreases in short-term market interest rates from September 2025 to December 2025. Total interest expense on interest bearing deposits was $29.6 million and $29.8 million for the six months ended June 30, 2026 and 2025, respectively. The average rate paid on total funding costs was 1.20% and 1.26% for the six months ended June 30, 2026 and 2025, respectively. 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 June 30, 2026 compared with 2025 Six Months Ended June 30, 2026 compared with 2025 Increase (Decrease) Due to: Increase (Decrease) Due to: (Dollars in thousands) Volume Rate Net Volume Rate Net Interest income: Interest earnings deposits in other banks and federal funds sold $ (1,707 ) $ (634 ) $ (2,341 ) $ (2,579 ) $ (1,119 ) $ (3,698 ) Investment securities: Taxable securities 2,797 571 3,368 5,927 1,463 7,390 Non-taxable securities (65 ) 1,082 1,017 (111 ) 2,167 2,056 Total investment securities 2,732 1,653 4,385 5,816 3,630 9,446 Loans: Real estate: Commercial 1,978 1,115 3,093 3,866 1,998 5,864 Agricultural (597 ) (61 ) (658 ) (1,273 ) (573 ) (1,846 ) Residential and home equity 75 177 252 136 411 547 Construction (978 ) 74 (904 ) (1,933 ) 273 (1,660 ) Total real estate 478 1,305 1,783 796 2,109 2,905 Commercial & industrial (116 ) (396 ) (512 ) (9 ) (592 ) (601 ) Agricultural 3 (363 ) (360 ) (171 ) (522 ) (693 ) Commercial leases (80 ) 53 (27 ) (160 ) 86 (74 ) Consumer and other (9 ) (7 ) (16 ) (5 ) (17 ) (22 ) Total loans and leases 276 592 868 451 1,064 1,515 Non-marketable securities - (292 ) (292 ) - 138 138 Total interest income 1,301 1,319 2,620 3,688 3,713 7,401 Interest expense: Interest bearing deposits: Demand (463 ) (1,907 ) (2,370 ) (422 ) (1,922 ) (2,344 ) Savings and money market accounts 747 282 1,029 1,718 288 2,006 Certificates of deposit greater than $250,000 506 (247 ) 259 788 (658 ) 130 Certificates of deposit equal to or less than $250,000 130 (96 ) 34 242 (256 ) (14 ) Total interest bearing deposits 920 (1,968 ) (1,048 ) 2,326 (2,548 ) (222 ) Subordinated debentures - (17 ) (17 ) - (33 ) (33 ) Total interest expense 920 (1,985 ) (1,065 ) 2,326 (2,581 ) (255 ) Net interest income $ 381 $ 3,304 $ 3,685 $ 1,362 $ 6,294 $ 7,656 42 Table of Contents Comparison of Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025 Three Months Ended Six Months Ended June 30, $ Better / % Better / June 30, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) 2026 2025 (Worse) (Worse) Selected Income Statement Information: Interest income $ 72,478 $ 70,061 $ 2,417 3.45 % $ 144,188 $ 137,199 $ 6,989 5.09 % Interest expense 15,128 16,193 1,065 6.58 % 29,935 30,190 255 0.84 % Net interest income 57,350 53,868 3,482 6.46 % 114,253 107,009 7,244 6.77 % Provision for credit losses 500 1,400 900 64.29 % 1,000 1,700 700 41.18 % Net interest income after provision for credit losses 56,850 52,468 4,382 8.35 % 113,253 105,309 7,944 7.54 % Non-interest income 5,036 5,519 (483 ) (8.75 %) 10,195 10,540 (345 ) (3.27 %) Non-interest expense 28,140 26,651 (1,489 ) (5.59 %) 57,318 52,160 (5,158 ) (9.89 %) Income before income tax expense 33,746 31,336 2,410 7.69 % 66,130 63,689 2,441 3.83 % Income tax expense 9,014 8,281 (733 ) (8.85 %) 17,327 17,625 298 1.69 % Net income $ 24,732 $ 23,055 $ 1,677 7.27 % $ 48,803 $ 46,064 $ 2,739 5.95 % For the three and six months ended June 30, 2026 and 2025, net income was $24.7 million and $48.8 million, respectively, compared with $23.1 million and $46.1 million for the same periods a year ago. For the three months ended June 30, 2026, the increase in net income was primarily the result of higher net interest income of $3.5 million partially offset by an increase in non-interest expense of $1.5 million and a $0.5 million decrease in non-interest income during the second quarter of 2026 compared to the same period in the prior year. For the six months ended June 30, 2026, the increase in net income was primarily the result of higher net interest income of $7.2 million and a decrease of $0.7 million in the provision for credit losses offset by a $5.2 million increase in non-interest expense during the six months ended June 30, 2026, compared to the same period in 2025. Net Interest Income and Net Interest Margin For the quarters ended June 30, 2026 and 2025, net interest income was $57.4 million compared with $53.9 million, respectively. The increase in net interest income is primarily the result of the net interest margin (tax equivalent basis) increasing 13 basis points to 4.20% compared with 4.07% 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 $4.4 million as the average balance increased $326.6 million compared to the second quarter of 2025. The investment securities yield during the second quarter of 2026 increased 41 basis points from 3.31% to 3.72% compared to the second quarter of 2025. The loan yield increased 3 basis points from 6.08% to 6.11% compared to the second quarter of 2025. The yield on interest-bearing deposits decreased 16 basis points from 1.88% to 1.72% compared to the second quarter of 2025. The cost of average total deposits decreased 12 basis points from 1.31% to 1.19% compared to the second quarter of 2025. For the six months ended June 30, 2026 and 2025, net interest income was $114.3 million compared with $107.0 million, respectively. The increase is primarily the result of the net interest margin (tax equivalent basis) increasing 9 basis points to 4.22% compared with 4.13% for the same period a year earlier. The increase in the net interest margin was primarily the result of the 46 basis point increase in the investment securities yield from 3.25% to 3.71% compared to the first six months of 2025, and average balances of the investment portfolio increased $349.3 million compared to the six months ended June 30, 2025. The loan yield increased 3 basis points from 6.07% to 6.10% compared to the first six months of 2025. The deposit yield decreased 8 basis points from 1.81% to 1.73% compared to the first six months of 2025 and the average balance of interest bearing deposits increased $136.2 million compared to the same period in 2025. 43 Table of Contents 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 three months ended June 30, 2026 compared to a $1.4 million provision for credit losses during the three months ended June 30, 2025. Net charge-offs during the three months ended June 30, 2026 were $165,000 compared to $544,000 for the same period a year earlier. The Company recorded a $1.0 million provision for credit losses during the first half of 2026 compared to a $1.7 million provision for credit losses during the first half of 2025. Net charge-offs during the first half of 2026 were $122,000 compared to $704,000 in the first half of 2025. Non-interest Income Three Months Ended Six Months Ended June 30, $ Better / % Better / June 30, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) 2026 2025 (Worse) (Worse) Non-interest Income: Card processing $ 1,888 $ 1,789 $ 99 5.53 % $ 3,622 $ 3,456 $ 166 4.80 % Service charges on deposit accounts 793 744 49 6.59 % 1,612 1,516 96 6.33 % Increase in cash surrender value of BOLI 662 627 35 5.58 % 1,300 1,230 70 5.69 % Net gain on sale of securities available-for-sale 45 - 45 NM 45 - 45 NM Net gain on deferred compensation benefits - 764 (764 ) N/A - 1,597 (1,597 ) N/A Other 1,648 1,595 53 3.32 % 3,616 2,741 875 31.92 % Total non-interest income $ 5,036 $ 5,519 $ (483 ) (8.75 %) $ 10,195 $ 10,540 $ (345 ) (3.27 %) Non-interest income decreased $0.5 million, or 8.75%, to $5.0 million for the quarter ended June 30, 2026, compared with $5.5 million for the same period a year earlier. The decrease was the result of a decrease in the net gain on deferred compensation of $0.8 million as the deferred compensation plan was distributed in December 2025. Excluding this item, non-interest income increased $0.3 million during the quarter ended June 30, 2026 compared to 2025. Non-interest income decreased $0.3 million, or 3.27%, to $10.2 million for the six months ended June 30, 2026, compared with $10.5 million for the same period of 2025. The decrease was the result of a decrease in the net gain on deferred compensation of $1.6 million as the deferred compensation plan was distributed in December 2025. Excluding this item, non-interest income increased $1.3 million for the six months ended June 30, 2026 compared to the same period in 2025. This increase was primarily due to an increase in other non-interest income of $0.9 million which included a net gain on equity investments of $435,000 and a gain on the sale of other real estate owned of $340,000. 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 and $1.6 million for the three and six months ended June 30, 2025, respectively, due to market value changes in the underlying assets and increases in interest and dividends. See Note 12, “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. 44 Table of Contents Non-interest Expense Three Months Ended Six Months Ended June 30, $ Better / % Better / June 30, $ Better / % Better / (Dollars in thousands) 2026 2025 (Worse) (Worse) 2026 2025 (Worse) (Worse) Non-interest Expense: Salaries and employee benefits $ 19,220 $ 18,432 $ (788 ) (4.28 %) $ 39,653 $ 35,576 $ (4,077 ) (11.46 %) Data processing 1,798 1,784 (14 ) (0.78 %) 3,662 3,422 (240 ) (7.01 %) Occupancy 1,318 1,293 (25 ) (1.93 %) 2,561 2,595 34 1.31 % Deposit insurance 837 750 (87 ) (11.60 %) 1,677 1,498 (179 ) (11.95 %) Professional services 1,596 694 (902 ) (129.97 %) 2,735 1,616 (1,119 ) (69.25 %) Marketing 412 452 40 8.85 % 990 919 (71 ) (7.73 %) Net gain on deferred compensation benefits - 764 764 N/A - 1,597 1,597 N/A Other 2,959 2,482 (477 ) (19.22 %) 6,040 4,937 (1,103 ) (22.34 %) Total non-interest expense $ 28,140 $ 26,651 $ (1,489 ) (5.59 %) $ 57,318 $ 52,160 $ (5,158 ) (9.89 %) Non-interest expense increased $1.5 million, or 5.59%, to $28.1 million for the quarter ended June 30, 2026, compared with $26.7 million for the same period a year ago. This increase was primarily due to an increase of $0.9 million in non-recurring professional service fees and a $0.8 million increase in salaries and employee benefits. Non-interest expense increased $5.2 million, or 9.89%, to $57.3 million for the six months ended June 30, 2026 compared with $52.2 million for the same period a year ago. This increase was primarily due to a $4.1 million increase in salaries and employee benefits which included annual salary increases, an increase in payroll taxes, and six months of stock compensation expense in 2026 versus five months in 2025 since the first restricted stock awards were issued in February 2025. Professional services increased $1.1 million due to higher legal and consulting services most of which were related to non-recurring corporate activities. The Company recorded net gains on deferred compensation plan investments of $0.8 million and $1.6 million for the three and six months ended June 30, 2025, respectively, due to market value changes in the underlying assets and increases in interest and dividends. See Note 12 “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/losses 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 and six months ended June 30, 2026, income tax expense was $9.0 million and $17.3 million, respectively, compared to $8.3 million and $17.6 million for the same periods a year ago. The Company’s effective tax rate for the three and six months ended June 30, 2026 was 26.71% and 26.20%, respectively, compared to 26.43% and 27.67% for the same periods in 2025. 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 June 30, 2026. As previously disclosed, the IRS conducted an examination of the Company's 2023 tax return. On August 4, 2026, the Company was notified that the IRS has completed their examination report with no adjustments to the tax returns examined. 45 Table of Contents Balance Sheet Analysis Total assets were $5.8 billion at June 30, 2026, compared with $5.7 billion at December 31, 2025, an increase of $145.3 million, or 2.55%. Total cash and cash equivalents increased $133.8 million from $144.9 million as of December 31, 2025 to $278.6 million as of June 30, 2026. The net investment portfolio decreased by $40.6 million, or 2.43%, to $1.6 billion at June 30, 2026, compared to $1.7 billion at December 31, 2025. Total loans and leases held for investment were $3.70 billion at June 30, 2026, compared with $3.65 billion at December 31, 2025, an increase of $54.9 million, or 1.50%. Total deposits were $5.1 billion at June 30, 2026, compared with $5.0 billion at December 31, 2025, an increase of $115.1 million, or 2.31%. The Company’s loan to deposit ratio was 73.07% and 73.67% as of June 30, 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 $186.0 million at June 30, 2026 and $84.2 million at December 31, 2025. The increase in cash was primarily due to the increase in deposits of $115.1 million. The Company’s total cash and cash equivalents as of June 30, 2026 represented 4.8% of the Company’s total assets as compared to 2.6% of total assets as of December 31, 2025. Investment Securities The Company’s net investment portfolio decreased by $40.6 million, or 2.43%, to $1.63 billion at June 30, 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 June 30, 2026 represented 27.92% 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) June 30, 2026 December 31, 2025 Available-for-sale securities U.S. Government-sponsored securities $ 1,828 $ 2,038 Mortgage-backed securities (1) 815,604 826,240 Commercial mortgage-backed securities (1) 1,249 1,253 Collateralized mortgage obligations (1) 19,846 20,730 Municipal securities 69,256 70,845 Corporate securities 24,685 29,738 Other 310 310 Total available-for-sale securities $ 932,778 $ 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. 46 Table of Contents (Dollars in thousands) June 30, 2026 December 31, 2025 Held-to-maturity securities Mortgage-backed securities (1) $ 567,079 $ 586,001 Collateralized mortgage obligations (1) 59,669 62,476 Municipal securities 69,716 70,164 Total held-to-maturity securities $ 696,464 $ 718,641 Allowance for credit losses (450 ) (450 ) Total held-to-maturity securities $ 696,014 $ 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 June 30, 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 % $ 34 5.65 % $ 347 5.43 % $ 1,447 4.48 % $ 1,828 4.68 % Mortgage-backed securities (1) 231 2.26 % 798 2.94 % 2,140 4.11 % 812,435 4.78 % 815,604 4.77 % Commercial mortgage-backed securities (1) - 0.00 % - 0.00 % - 0.00 % 1,249 5.80 % 1,249 5.80 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % 12,620 4.42 % 7,226 5.12 % 19,846 4.67 % Municipal securities - 0.00 % - 0.00 % 35,955 4.72 % 33,301 4.69 % 69,256 4.71 % Corporate securities 5,012 4.31 % 19,673 4.48 % - 0.00 % - 0.00 % 24,685 4.45 % Other 310 6.88 % - 0.00 % - 0.00 % - 0.00 % 310 6.88 % Total securities available-for-sale $ 5,553 4.37 % $ 20,505 4.43 % $ 51,062 4.63 % $ 855,658 4.78 % $ 932,778 4.76 % (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 June 30, 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 % $ 93 2.29 % $ 4,933 1.67 % $ 562,053 1.91 % $ 567,079 1.91 % Collateralized mortgage obligations (1) - 0.00 % - 0.00 % - 0.00 % 59,669 1.76 % 59,669 1.76 % Municipal securities 2,609 3.42 % 18,023 3.79 % 12,916 2.38 % 36,168 2.78 % 69,716 2.99 % Total securities held-to-maturity $ 2,609 3.42 % $ 18,116 3.78 % $ 17,849 2.18 % $ 657,890 1.94 % $ 696,464 2.00 % (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. 47 Table of Contents 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 June 30, 2026 totaled $3.7 billion, an increase of $54.9 million, or 1.50%, from December 31, 2025, primarily due to increased lending activity in our commercial real estate and commercial and industrial portfolios. The following table sets forth the distribution of the loan and lease portfolio by type and percent at the dates indicated: June 30, 2026 December 31, 2025 (Dollars in thousands) Dollars Percent of Total Dollars Percent of Total Gross loans and leases Real estate: Commercial $ 1,541,826 41.43 % $ 1,480,906 40.37 % Agricultural 692,554 18.61 % 705,668 19.24 % Residential and home equity 404,005 10.85 % 405,080 11.05 % Construction 115,150 3.10 % 128,179 3.50 % Total real estate 2,753,535 73.99 % 2,719,833 74.16 % Commercial & industrial 527,508 14.18 % 497,700 13.57 % Agricultural 255,767 6.87 % 264,117 7.20 % Commercial leases 180,223 4.84 % 181,004 4.94 % Consumer and other 4,392 0.12 % 4,671 0.13 % Total gross loans and leases $ 3,721,425 100.00 % $ 3,667,325 100.00 % 48 Table of Contents The following table shows the maturity distribution and interest rate sensitivity of the loan and lease portfolio of the Company at June 30, 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 $ 131,180 $ 706,393 $ 676,702 $ 27,551 $ 1,541,826 Agricultural 43,993 191,814 425,603 31,144 692,554 Residential and home equity 195 6,087 123,289 274,434 404,005 Construction 85,470 29,680 - - 115,150 Total real estate 260,838 933,974 1,225,594 333,129 2,753,535 Commercial & industrial 186,427 264,776 67,880 8,425 527,508 Agricultural 168,952 77,192 9,623 - 255,767 Commercial leases 2,586 92,566 85,071 - 180,223 Consumer and other 1,249 2,595 104 444 4,392 Total gross loans and leases $ 620,052 $ 1,371,103 $ 1,388,272 $ 341,998 $ 3,721,425 Rate structure for loans and leases Fixed rate $ 169,903 $ 979,302 $ 728,832 $ 182,356 $ 2,060,393 Adjustable rate 450,149 391,801 659,440 159,642 1,661,032 Total gross loans and leases $ 620,052 $ 1,371,103 $ 1,388,272 $ 341,998 $ 3,721,425 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) June 30, 2026 December 31, 2025 Non-performing assets: Non-accrual loans and leases Real estate: Commercial $ 712 $ 750 Agricultural 1,732 - Residential and home equity - - Construction - - Total real estate 2,444 750 Commercial & industrial 230 - Agricultural - - Commercial leases - - Consumer and other - - Total non-performing loans and leases 2,674 750 Other real estate owned (“OREO”) 1,015 - Total non-performing assets $ 3,689 $ 750 Selected ratios: Non-performing loans to total loans and leases 0.07 % 0.02 % Non-performing assets to total assets 0.06 % 0.01 % 49 Table of Contents 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 $2.67 million in non-accrual loans at June 30, 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. 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 $1.0 million of foreclosed OREO at June 30, 2026 compared to zero at 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 three loans in the aggregate amount of $4.8 million, during the six months ended June 30, 2026. There was one loan modified within the last twelve months that had a payment default and was past due at June 30, 2026. 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. 50 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: Six Months Ended June 30, (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 1,000 1,590 Allowance for credit losses - unfunded loan commitments - 110 Total provision for credit losses 1,000 1,700 Charge-offs: Real estate: Commercial (75 ) (175 ) Agricultural - (180 ) Residential and home equity - - Construction - - Total real estate (75 ) (355 ) Commercial & industrial (505 ) (232 ) Agricultural - (234 ) Commercial leases - - Consumer and other (16 ) (21 ) Total charge-offs (596 ) (842 ) Recoveries: Real estate: Commercial 10 - Agricultural 76 - Residential and home equity 43 6 Construction - - Total real estate 129 6 Commercial & industrial 329 123 Agricultural - - Commercial leases - - Consumer and other 16 9 Total recoveries 474 138 Net charge-offs (122 ) (704 ) Balance at end of period $ 80,553 $ 78,969 Allowance for credit losses - loans and leases 77,253 76,169 Allowance for credit losses - unfunded loan commitments 3,300 2,800 Total allowance for credit losses $ 80,553 $ 78,969 Selected financial information: Loans and leases held for investment, net of unearned income $ 3,703,857 $ 3,623,636 Average loans and leases 3,652,021 3,615,624 Non-performing loans and leases 2,674 - Allowance for credit losses to non-performing loans and leases N/M (1) N/M (1) Net charge-offs to average loans and leases (0.003 %) (0.02 %) Provision for credit losses to average loans and leases 0.03 % 0.05 % Allowance for loan and lease losses to loans and leases held for investment 2.08 % 2.09 % (1) Not meaningful (N/M) 51 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: June 30, 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 $ 22,979 41.43 % 1.49 % $ 22,574 40.37 % 1.52 % Agricultural 23,007 18.61 % 3.32 % 23,647 19.24 % 3.35 % Residential and home equity 7,664 10.85 % 1.90 % 7,620 11.05 % 1.88 % Construction 2,089 3.10 % 1.81 % 2,311 3.50 % 1.80 % Total real estate 55,739 73.99 % 2.02 % 56,152 74.16 % 2.06 % Commercial & industrial 8,646 14.18 % 1.64 % 7,355 13.57 % 1.48 % Agricultural 7,023 6.87 % 2.75 % 6,760 7.20 % 2.56 % Commercial leases 5,618 4.84 % 3.12 % 5,861 4.94 % 3.24 % Consumer and other 227 0.12 % 5.17 % 247 0.13 % 5.29 % Total allowance for credit losses $ 77,253 100.00 % 2.08 % $ 76,375 100.00 % 2.08 % Deposits The following table shows the deposit balances as of the dates indicated: June 30, December 31, (Dollars in thousands) 2026 2025 Deposits: Non-interest bearing $ 1,596,642 $ 1,642,119 Interest-bearing: Demand 893,360 802,352 Savings and money market 1,859,920 1,790,274 Certificates of deposit 743,041 743,081 Total interest-bearing 3,496,321 3,335,707 Total deposits $ 5,092,963 $ 4,977,826 Total deposits were $5.1 billion and $5.0 billion as of June 30, 2026 and December 31, 2025, respectively, an increase of $115.1 million or 2.31%. The increase was primarily due to an increase in interest-bearing demand accounts of $91.0 million or 11.34%, and an increase in savings and money market accounts of $69.6 million or 3.89% from December 31, 2025 to June 30, 2026, respectively. These increases were partially offset by a decrease of $45.5 million or 2.77%, in non-interest bearing demand deposits from December 31, 2025 to June 30, 2026. The increases were primarily from an increase in the number of client accounts and fluctuations in client balances along with shifts from non-interest bearing demand deposits into higher yielding savings and money market accounts. Non-interest bearing deposits were 31.35% and 32.99% of total deposits, at June 30, 2026 and December 31, 2025, respectively. 52 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: Six Months Ended June 30, 2026 2025 (Dollars in thousands) Average Balance Interest Expense Average Rate Average Balance Interest Expense Average Rate Total deposits: Interest-bearing deposits: Demand $ 795,561 $ 1,228 0.31 % $ 917,085 $ 3,572 0.79 % Savings and money market 1,887,885 16,762 1.79 % 1,693,889 14,756 1.76 % Certificates of deposit greater than $250,000 429,742 6,918 3.25 % 383,185 6,788 3.57 % Certificates of deposit equal to or less than $250,000 343,379 4,674 2.74 % 326,255 4,688 2.90 % Total interest-bearing deposits 3,456,567 29,582 1.73 % 3,320,414 29,804 1.81 % Non-interest bearing deposits 1,568,916 1,489,725 Total deposits $ 5,025,483 $ 29,582 1.19 % $ 4,810,139 $ 29,804 1.25 % 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 2025. The average cost of total deposits, including non-interest bearing deposits, decreased to 1.19% for the three months ended June 30, 2026, compared with 1.31% for the same period a year ago, and decreased to 1.19% for the six months ended June 30, 2026, compared with 1.25% for the six months ended June 30, 2025. The following table shows deposits with a balance greater than $250,000 at June 30, 2026 and December 31, 2025: June 30, December 31, (Dollars in thousands) 2026 2025 Non-Maturity Deposits greater than $250,000 $ 2,754,304 $ 2,729,456 Certificates of deposit greater than $250,000, by maturity: Less than 3 months 136,682 137,517 3 months to 6 months 185,528 192,804 6 months to 12 months 77,154 67,313 More than 12 months 1,637 629 Total certificates of deposit greater than $250,000 $ 401,001 $ 398,263 Total deposits greater than $250,000 $ 3,155,305 $ 3,127,719 Refer to the “Average Balance and Yields” schedules 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 June 30, 2026 and December 31, 2025 the Bank had $3.0 million of such deposits. Total estimated uninsured deposits based on the Company’s regulatory reporting amounted to $2.6 billion at June 30, 2026 and December 31, 2025. 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 June 30, 2026 or December 31, 2025. There were no Federal Funds purchased or advances from the FRB at June 30, 2026 or December 31, 2025. 53 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 6.78% at June 30, 2026 (the next reset is September 17, 2026). The average rate paid for these securities was 6.90% for the first half of 2026 and 7.55% for the first half 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 ensure depositor protection. Shareholders’ equity totaled $679.0 million at June 30, 2026, an increase of $33.5 million, or 5.19%, from $645.5 million at December 31, 2025, due primarily to net income of $48.8 million during the first half of 2026 partially offset by dividends of $7.4 million and an increase in accumulated other comprehensive loss of $8.0 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 June 30, 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 June 30, 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 June 30, 2026 and December 31, 2025. 54 Table of Contents The Company’s and Bank’s actual and required capital amounts and ratios are as follows: June 30, 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 $ 663,714 14.56 % $ 205,064 4.50 % N/A N/A Tier 1 capital to risk-weighted assets 673,714 14.78 % 273,418 6.00 % N/A N/A Risk-based capital to risk-weighted assets 730,973 16.04 % 364,557 8.00 % N/A N/A Tier 1 leverage capital ratio 673,714 11.68 % 230,746 4.00 % N/A N/A F & M Bank CET1 capital to risk-weighted assets $ 671,521 14.74 % $ 205,023 4.50 % $ 296,144 6.50 % Tier 1 capital to risk-weighted assets 671,521 14.74 % 273,363 6.00 % 364,485 8.00 % Risk-based capital to risk-weighted assets 728,769 16.00 % 364,485 8.00 % 455,606 10.00 % Tier 1 leverage capital ratio 671,521 11.65 % 230,504 4.00 % 288,130 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 six months of 2026, the Company repurchased 240 shares under the Repurchase Plan, for a total of $279,000, inclusive of the excise tax. As of June 30, 2026, there remains $30.0 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 May 11, 2026, the Company declared a quarterly cash dividend of $5.35 per share which was paid on July 1, 2026, to shareholders of record on June 12, 2026. 55 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 June 30, 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 $ 1,112,922 $ 508,099 $ 372,591 $ 71,931 $ 160,301 Standby letters of credit 21,238 16,900 3,338 1,000 - Total off-balance sheet commitments $ 1,134,160 $ 524,999 $ 375,929 $ 72,931 $ 160,301 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 June 30, 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 June 30, 2026 had maturity dates ranging from 1 to 45 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 $278.6 million, or 4.8% of total assets, as of June 30, 2026. The majority of cash is on deposit with the FRB and amounted to $186.0 million at June 30, 2026. 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. 56 Table of Contents We had the following borrowing lines available at June 30, 2026: (Dollars in thousands) Total Credit Line Limit Outstanding Amount Remaining Credit Line Available Value of Collateral Pledged Additional liquidity sources: Federal Reserve BIC $ 1,065,693 $ - $ 1,065,693 $ 1,336,322 Federal Home Loan Bank 938,949 - 938,949 1,213,144 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 $ 2,137,642 $ - $ 2,137,642 $ 2,549,466 We continued our focus on maintaining a strong liquidity position throughout the first six 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 June 30, 2026, we had $1.1 billion in internal sources of liquidity comprised of $278.6 million in cash and $864.0 million of unencumbered investment securities, which represented in the aggregate 19.6% of total assets as of such date. We also had $2.1 billion in external sources of liquidity as outlined in the table above, bringing our total available liquidity to $3.3 billion at June 30, 2026. Our pledged collateral on short-term borrowing lines is comprised of $2.5 billion in loans and $1.2 million in investment securities held at market value at June 30, 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 six months of 2026 was $73.7 million, driven by net income of $48.8 million. Our primary investing activities are the origination of loans and leases and purchases and sales of investment securities. Net cash used in investing activities was $41.2 million during the first six months of 2026, driven by a net increase in purchases in our investment portfolio of $80.7 million, a net increase in loans and leases of $55.0 million and a $13.0 million increase of premises and equipment, offset by $112.2 million in proceeds from maturities, calls, and pay downs of investment securities. Net cash provided by financing activities totaled $101.3 million in the first six months of 2026, driven by an increase in deposits of $115.1 million, partially offset by $7.3 million in cash dividends paid to shareholders and a restricted stock vesting distribution of $6.3 million. 57 Table of Contents Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company’s assessment of market risk at June 30, 2026 indicates there have been no material changes in the quantitative and qualitative disclosures from those made in the Company’s 2025 Form 10-K. Market risk is the risk of loss in a financial instrument arising from adverse changes in market prices and rates, foreign currency exchange rates, commodity prices and equity prices. Our market risk arises primarily from interest rate risk inherent in our lending and deposit taking activities. Management actively monitors and manages our interest rate risk exposure. We do not have any market-risk sensitive instruments entered into for trading purposes. In monitoring interest rate risk, we continually analyze and manage our earning assets and funding liabilities based on their payment streams and interest rates, the timing of their maturities and/or prepayments, and their sensitivity to actual or potential changes in market interest rates. Management uses various asset/liability strategies to manage the re-pricing characteristics of our assets and liabilities designed to ensure that exposure to interest rate fluctuations is limited within our guidelines of acceptable levels of risk-taking. Hedging strategies, including the terms and pricing of loans and deposits, and managing the deployment of our securities, are considered to reduce mismatches in interest rate re-pricing opportunities of portfolio assets and their funding sources. Since our earnings are primarily dependent on our ability to generate net interest income, we focus on actively monitoring and managing the effects of adverse changes in interest rates on our net interest income. Our Asset Liability Management Committee (“ALCO”), which is comprised of members of the Board of Directors and Executive Officers, manages market risk. ALCO monitors interest rate risk by analyzing the potential impact on net interest income from potential changes in interest rates, and considers the impact of alternative strategies or changes in balance sheet structure. ALCO manages our balance sheet in part to maintain the potential impact of changes in interest rates on net interest income within acceptable ranges despite changes in interest rates. ALCO and management utilize a third party to assist with asset liability management including the use of simulation models. Our exposure to interest rate risk is reviewed on at least a quarterly basis by ALCO. Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our change in net interest income in the event of hypothetical changes in interest rates. If potential changes to net interest income resulting from hypothetical interest rate changes are not within risk tolerances determined by ALCO, and approved by the full Board of Directors, Management may make adjustments to the Company’s asset and liability mix to bring interest rate risk levels within the Board approved limits. Net Interest Income Simulation. In order to measure interest rate risk, we use a simulation model to project changes in net interest income that result from forecasted changes in interest rates. This analysis calculates the difference between net interest income forecasted using a rising and a falling interest rate scenario and a net interest income forecast using a base market interest rate derived from the current Treasury yield curve. The income simulation model includes various assumptions regarding the re-pricing relationships for each of our products. Many of our assets are floating rate loans, which are assumed to re-price immediately, and to the same extent as the change in market rates according to their contracted index. Some loans and investment vehicles include the opportunity of prepayment (embedded options), and accordingly the simulation model uses various proprietary models to estimate these prepayments and assumes the reinvestment of the proceeds at current yields. Our non-term deposit products generally re-price more slowly, usually changing less than the change in market rates and at our discretion. This analysis indicates the impact of changes in net interest income for the given set of rate changes and assumptions. It assumes the balance sheet size remains static throughout the simulation horizon by replacing existing cash flows/amortization into similar products at current rates to try and capture the ongoing activity of the balance sheet without forecasting any level of growth. It does not account for all factors that affect this analysis, including changes by management to mitigate the effect of interest rate changes or secondary impacts such as changes to our credit risk profile as interest rates change. 58 Table of Contents Furthermore, loan prepayment-rate estimates and spread relationships change regularly. Interest rate changes create changes in actual loan prepayment rates that will differ from the market estimates incorporated in this analysis. Changes that vary significantly from the assumptions may have significant effects on our net interest income. For the rising and falling interest rate scenarios, the base market interest rate forecast was increased or decreased, on an instantaneous and sustained basis, by 100, 200 and 300 basis points. We then evaluate the simulation results using two approaches: Net Interest Income at Risk (“NII at Risk”) and Economic Value of Equity (“EVE”). Under NII at Risk, the impact on net interest income from the changes in interest rates on interest earning assets and interest-bearing liabilities is modeled using various assumptions of assets and liabilities. EVE measures the period-end present value of assets minus the present value of liabilities. Management uses this value to measure the changes in the economic value of the Company under various interest rate scenarios. Based on our quarterly simulations, our net interest margin exposure related to these hypothetical changes in market interest rates was within the current guidelines established by ALCO. The Company is slightly liability sensitive, as interest-bearing liabilities reprice more quickly than interest-bearing assets. As a result, in rising interest rate scenarios net interest income declines while in falling interest rate scenarios net interest income increases. The ratio of variable to fixed-rate loans in our loan portfolio, the ratio of short-term (maturing at a given time within 12 months) to long-term loans, and the ratio of our demand, money market and savings deposits to CDs (and their time periods), are the primary factors affecting the sensitivity of our net interest income to changes in market interest rates. Our short-term loans are typically priced at prime plus a margin, and our long-term loans are typically priced based on a specific term of the Treasury Curve for comparable maturities, plus a margin. The composition of our rate-sensitive assets or liabilities is subject to change and could result in a more unbalanced position that would cause market rate changes to have a greater impact on our net interest margin. As of June 30, 2026, our loan and lease portfolio was comprised of 55.37% fixed rate and 44.63% variable rate loans. An additional component of managing our interest rate risk is the use of loan floors when structuring our variable loan products. At loan origination, a loan floor rate, typically equal to or slightly below the initial rate on the loan, is established. This is particularly beneficial in a declining interest rate environment. The following table presents the projected change in the Company’s net interest income over the next twelve months and the economic value of equity at June 30, 2026, that would occur upon an immediate change in interest rates based on the models discussed above, but without giving effect to any steps that management might take to counteract such change: Estimated Change in Net Interest Income (NII) (as a % of NII) Estimated Change in Economic Value of Equity (EVE) (as a % of EVE) +300 bps (2.0 %) (8.3 %) +200 bps (1.6 %) (5.2 %) +100 bps (0.9 %) (1.9 %) 0 bps - - -100 bps 0.7 % (0.1 %) -200 bps 0.8 % (2.7 %) -300 bps 1.4 % (7.2 %) 59 Table of Contents Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the disclosure controls and procedures (as required by Exchange Act Rules 240.13a-15(b) and 15d-14(b)). Based on that evaluation, the CEO and CFO have concluded that as of the end of the period covered by this Report, the disclosure controls and procedures are effective to provide reasonable assurance that the information required to be disclosed by the Company in reports that are filed or submitted under the Exchange Act are recorded, processed, summarized and timely reported as provided in the SEC’s rules and forms. Changes in Internal Controls There have been no material changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026, to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. PART II – OTHER INFORMATION Item 1. Legal Proceedings Certain lawsuits and claims arising in the ordinary course of business may be filed or pending against the Company or its subsidiaries. Based upon information available to the Company, its review of such lawsuits and claims and consultation with its counsel, the Company believes the liability relating to these actions, if any, would not have a material adverse effect on its consolidated financial statements. There are no material proceedings adverse to the Company to which any director, officer or affiliate of the Company is a party. Item 1A. Risk Factors We are subject to various risks and uncertainties, which could materially affect our business, results of operations, financial condition, future results, and the trading price of our common stock. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, “Risk Factors” in our 2025 Form 10-K. These risk factors, as well as our condensed consolidated financial statements and notes thereto and the other information appearing in this Report, should be reviewed carefully for important information regarding risks that affect us. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The following table reports information regarding repurchases of our common stock during the three months ended June 30, 2026: Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs ( In thousands ) April 1, 2026 to April 30, 2026 - $ - - $ 30,109 May 1, 2026 to May 31, 2026 59 1,310.00 59 30,031 June 1, 2026 to June 30, 2026 - - - 30,031 Total 2nd Quarter 2026 59 $ 1,310.00 59 $ 30,031 (1) The aggregate purchase price and weighted average price per share does not include the effect of excise tax expense incurred on net stock repurchases. For the three months ended June 30, 2026, there was no excise tax expense. 60 Table of Contents On September 10, 2024, the Board of Directors authorized a new share repurchase program (the “Repurchase Plan”) for $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 six months of 2026, the Company repurchased 240 shares under the Repurchase Plan, for a total of $279,000, inclusive of the excise tax. As of June 30, 2026, there remains $30.0 million authorized for repurchases under the Repurchase Plan. Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Mine Safety Disclosures Not Applicable Item 5. Other Information During the three months ended June 30, 2026, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K. Item 6. Exhibits Exhibit Number Description 31(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31(b) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Shareholders’ Equity, (v) the Unaudited Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements. The XBRL instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) 61 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FARMERS & MERCHANTS BANCORP Date: August 6, 2026 /s/ Kent A. Steinwert Kent A. Steinwert Director, Chairman, President and Chief Executive Officer (Principal Executive Officer) Date: August 6, 2026 /s/ Bart R. Olson Bart R. Olson Executive Vice President and Chief Financial Officer (Principal Financial Officer) 62