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 March 31, 2026

☐ 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. Yes ☒ 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).

Yes ☐ No ☒

As of April 30, 2026, the registrant had 692,287 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)		3
		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		33

	Item 3 - Quantitative and Qualitative Disclosures About Market Risk		55

	Item 4 - Controls and Procedures		57

PART II. - OTHER INFORMATION

	Item 1 – Legal Proceedings		57
	Item 1A – Risk Factors		57
	Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		58
	Item 3 – Defaults Upon Senior Securities		58
	Item 4 – Mine Safety Disclosures		58
	Item 5 – Other Information		58
	Item 6 – Exhibits		59
	Signatures		60

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)	March 31, 2026			December 31, 2025
ASSETS
Cash and due from banks	$	66,099		$	60,622
Interest-bearing deposits with banks		318,125			84,242
Total cash and cash equivalents		384,224			144,864
Securities available-for-sale, amortized cost $915,695 and $955,203 respectively		901,915			951,154
Securities held-to-maturity, fair value $581,514 and $592,736, respectively		708,273			718,641
Allowance for credit losses - securities held-to-maturity		(450	)		(450	)
Total investment securities		1,609,738			1,669,345
Non-marketable securities		15,549			15,549
Loans and leases held for investment, net of unearned income		3,616,871			3,648,945
Allowance for credit losses - loans and leases		(76,918	)		(76,375	)
Loans held for investment, net		3,539,953			3,572,570
Bank-owned life insurance		77,252			76,614
Premises and equipment, net		64,571			55,847
Deferred income tax assets and income taxes receivevable		34,745			38,775
Accrued interest receivable		25,344			29,996
Goodwill		11,183			11,183
Other intangibles		1,044			1,165
Other assets		73,061			74,202
Total Assets	$	5,836,664		$	5,690,110

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	1,615,425		$	1,642,119
Interest-bearing:
Demand		785,612			802,352
Savings and money market		1,916,012			1,790,274
Certificates of deposit		799,224			743,081
Total interest-bearing		3,500,848			3,335,707
Total deposits		5,116,273			4,977,826
Subordinated debentures		10,310			10,310
Interest payable and other liabilities		54,026			56,460
Total Liabilities		5,180,609			5,044,596

COMMITMENTS AND CONTINGENCIES (Note 11)

SHAREHOLDERS’ EQUITY
Preferred shares, no par value, 1,000,000 shares authorized and, none issued or outstanding		-			-
Common shares, $0.01 par value, 7,500,000 authorized, 723,880 and 728,560 issued and 693,043 and 697,904 outstanding at March 31, 2026 and December 31, 2025, respectively		7			7
Additional paid-in capital		8,765			11,550
Retained earnings		689,638			669,262
Accumulated other comprehensive loss, net of taxes		(10,360	)		(3,512	)
Treasury stock, at cost; 30,837 shares at March 31, 2026 and 30,656 shares at December 31, 2025		(31,995	)		(31,793	)
TOTAL SHAREHOLDERS’ EQUITY		656,055			645,514
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,836,664		$	5,690,110

See accompanying notes to the unaudited consolidated financial statements.

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FARMERS & MERCHANTS BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands, except share and per share amounts)	2026		2025
Interest income
Interest and fees on loans and leases	$	54,682	$	54,035
Interest and dividends on investment securities		15,744		10,462
Interest on deposits with others		1,284		2,641
Total interest income		71,710		67,138

Interest expense
Deposits		14,631		13,805
Subordinated debentures		176		192
Total interest expense		14,807		13,997
Net interest income		56,903		53,141
Provision for credit losses		500		300
Net interest income after provision for credit losses		56,403		52,841

Non-interest income
Card processing		1,734		1,667
Service charges on deposit accounts		819		772
Increase in cash surrender value of BOLI		638		603
Net gain on deferred compensation benefits		-		833
Other		1,968		1,146
Total non-interest income		5,159		5,021
Non-interest expense
Salaries and employee benefits		20,433		17,144
Data processing		1,864		1,638
Occupancy		1,243		1,302
Deposit insurance		840		748
Professional services		1,139		922
Marketing		578		467
Net gain on deferred compensation benefits		-		833
Other		3,081		2,455
Total non-interest expense		29,178		25,509
INCOME BEFORE INCOME TAXES		32,384		32,353
Income tax expense		8,313		9,344
NET INCOME	$	24,071	$	23,009

Earnings per common share:
Basic	$	35.91	$	32.88
Diluted	$	35.34	$	32.86

Weighted average number of common shares
Basic		670,265		699,736
Diluted		681,179		700,215

See accompanying notes to the unaudited consolidated financial statements.

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FARMERS & MERCHANTS BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands)	2026			2025
Net income	$	24,071		$	23,009
Other comprehensive income
Unrealized (losses)/gains on available-for-sale securities		(9,731	)		6,959
Amortization of unrecognized gains/(loss) on securities transferred to held-to-maturity		9			(11	)
Net unrealized (losses)/gains on securities		(9,722	)		6,948
Income tax benefit/(expense)		2,874			(2,054	)
Other comprehensive (loss)/income, net of tax		(6,848	)		4,894
Total comprehensive income	$	17,223		$	27,903

See accompanying notes to the unaudited consolidated financial statements.

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FARMERS & MERCHANTS BANCORP

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except share and per share amounts)	Common Shares			Amount		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss)/Income			Shares			Treasury Stock			Total
Balance as of December 31, 2024		699,798		$	7	$	-		$	592,431		$	(19,366	)		-		$	-		$	573,072
Net income		-			-		-			23,009			-			-			-			23,009
Other comprehensive income, net of tax		-			-		-			-			4,894			-			-			4,894
Issuance of restricted stock awards		30,818			-		-			-			-			-			-			-
Stock based compensation expense		-			-		2,042			-			-			-			-			2,042
Repurchase of common stock		(703	)		-		-			(711	)		-			-			-			(711	)
Balance as of March 31, 2025		729,913		$	7	$	2,042		$	614,729		$	(14,472	)	$	-		$	-		$	602,306

Balance as of December 31, 2025		728,560		$	7	$	11,550		$	669,262		$	(3,512	)		(30,656	)	$	(31,793	)	$	645,514
Net income		-			-		-			24,071			-			-			-			24,071
Other comprehensive loss, net of tax		-			-		-			-			(6,848	)		-			-			(6,848	)
Issuance of restricted stock awards		1,168			-		-			-			-			-			-			-
Restricted stock surrendered for tax withholdings upon vesting		(5,470	)		-		(6,303	)		-			-			-			-			(6,303	)
Forfeiture of restricted stock awards		(378	)		-		-			-			-			-			-			-
Stock based compensation expense		-			-		3,518			-			-			-			-			3,518
Cash dividends declared ($5.10 per share)		-			-		-			(3,695	)		-			-			-			(3,695	)
Purchase of treasury stock		-			-		-			-			-			(181	)		(202	)		(202	)
Balance as of March 31, 2026		723,880		$	7	$	8,765		$	689,638		$	(10,360	)		(30,837	)	$	(31,995	)	$	656,055

See accompanying notes to the unaudited consolidated financial statements.

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FARMERS & MERCHANTS BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands)	2026			2025
Cash flows from operating activities:
Net income	$	24,071		$	23,009
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		500			300
Depreciation and amortization		756			763
Net accretion of securities premiums and discounts		(1,025	)		(276	)
Stock based compensation expense		3,518			2,042
Increase in cash surrender value of BOLI		(638	)		(603	)
Decrease in deferred income taxes, net		3,300			6,959
Net changes in:
Other assets		10,124			3,935
Other liabilities		110			3,421
Net cash provided by operating activities		40,716			39,550
Cash flows from investing activities:
Net decrease in loans and leases held for investment		32,158			94,058
Purchase of available-for-sale securities		-			(33,186	)
Purchase of held-to-maturity securities		(1,050	)		(1,945	)
Proceeds from sales, maturities, calls and pay downs of available-for-sale securities		40,499			9,274
Proceeds from maturities, calls and pay downs of held-to-maturity securities		11,430			11,489
Purchase of premises and equipment		(9,535	)		(673	)
Purchase of other investments		(3,135	)		(2,047	)
Proceeds from sale of assets		-			53
Net cash provided by investing activities		70,367			77,023
Cash flows from financing activities:
Net increase in deposits		138,447			278,829
Cash dividends paid		(3,665	)		-
Restricted stock vesting distribution		(6,303	)		-
Cash used in share repurchase program		-			(711	)
Purchase of treasury stock		(202	)		-
Net cash provided by financing activities		128,277			278,118
Net change in cash and cash equivalents		239,360			394,691
Cash and cash equivalents, beginning of period		144,864			212,563
Cash and cash equivalents, end of period	$	384,224		$	607,254

Supplemental disclosures of cash flow information:
Cash paid for interest	$	16,121		$	15,109
Income taxes paid	$	-		$	1,234

Supplemental disclosures of non-cash transactions:
Accrued cash dividend on restricted stock	$	(30	)	$	-
Net change in unrealized gains/(losses) on securities available-for-sale	$	9,731		$	(6,959	)

See accompanying notes to the unaudited consolidated financial statements.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation and Significant Accounting Policies

The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bancorp (“FMCB” or “Bancorp”), a bank holding company incorporated in the State of Delaware, and its wholly owned subsidiary, Farmers & Merchants Bank of Central California (“F&M Bank” or the “Bank”) (collectively, the “Company”).

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. All significant intercompany transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, management has identified one accounting policy that, due to the judgments, estimates and assumptions inherent in this policy, is significant to an understanding of the Bank’s financial statements. This policy relates to the determination of the allowance for credit losses on loans and leases held for investment. This policy and the related judgments, estimates and assumptions are described in greater detail in subsequent notes to the Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates, in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 13, 2026 (“2025 Form 10-K”) and Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates included in this Quarterly Report on Form 10-Q.

The information included in this Form 10-Q should be read in conjunction with our 2025 Form 10-K. Interim results are not necessarily indicative of results for a full year or any other interim period.

Summary of Significant Accounting Policies

Our accounting policies are described in Note 1 – Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our 2025 Form 10-K. As of March 31, 2026, there were no significant changes to accounting policies from those disclosed in our audited consolidated financial statements included in our 2025 Form 10-K.

Use of estimates — The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 1—Basis of Presentation and Significant Accounting Policies—Continued

Recently Adopted Accounting Standards — The Accounting Standards Codification (“ASC”) is the FASB officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Periodically, the FASB will issue Accounting Standard Updates (“ASU”) to its ASC. Rules and interpretive releases of the SEC under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative.

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 provides amendments that provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments are effective in fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years. The Company adopted this new guidance on January 1, 2026 and there was no material impact on its consolidated financial statements.

Accounting Standards Pending Adoption — The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures, but does not expect the impact to be material.

In December 2025, the FASB issued ASU No. 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements” (“ASU 2025-11”). ASU 2025-11 clarifies and improves the guidance for interim financial reporting by providing a list of required interim disclosures, clarifying the applicability of interim reporting requirements, and introducing a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance is effective for the Company starting January 1, 2029, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its financial presentation.

In December 2025, the FASB issued ASU No. 2025-12, “Codification Improvements” (“ASU 2025-12”). ASU 2025-12 is part of the FASB’s standing “evergreen” project and makes a broad set of technical corrections, clarifications, and other minor improvements across many Topics to make the Codification easier to understand and apply. The amendments will be effective for the Company beginning with the fiscal year ending December 31, 2027, and interim periods within that fiscal year. The Company is currently evaluating the impact of such amendments to the consolidated financial statements and related disclosures.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2—Investment Securities

The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows:

			Gross Unrealized
(Dollars in thousands)	Amortized Cost		Gains		Losses		Fair Value
As of March 31, 2026
U.S. Government-sponsored securities	$	1,944	$	4	$	8	$	1,940
Mortgage-backed securities⁽¹⁾		795,244		4,078		19,694		779,628
Commercial mortgage-backed obligations⁽¹⁾		1,232		19		-		1,251
Collateralized mortgage obligations⁽¹⁾		20,812		-		493		20,319
Municipal securities		66,548		2,262		19		68,791
Corporate securities		29,605		117		46		29,676
Other		310		-		-		310
Total available-for-sale securities	$	915,695	$	6,480	$	20,260	$	901,915

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

			Gross Unrealized
(Dollars in thousands)	Amortized Cost		Gains		Losses		Fair Value
As of December 31, 2025
U.S. Government-sponsored securities	$	2,046	$	2	$	10	$	2,038
Mortgage-backed securities⁽¹⁾		834,820		9,140		17,720		826,240
Commercial mortgage-backed obligations⁽¹⁾		1,231		22		-		1,253
Collateralized mortgage obligations⁽¹⁾		21,087		5		362		20,730
Municipal securities		66,142		4,703		-		70,845
Corporate securities		29,567		171		-		29,738
Other		310		-		-		310
Total available-for-sale securities	$	955,203	$	14,043	$	18,092	$	951,154

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The book values, estimated fair values, and unrecognized gains and losses of investments classified as held-to-maturity are as follows:

									Allowance
	Amortized		Gross Unrecognized						for Credit
(Dollars in thousands)	Cost		Gains		Losses		Fair Value		Losses
As of March 31, 2026
Mortgage-backed securities⁽¹⁾	$	577,812	$	48	$	116,105	$	461,755	$	-
Collateralized mortgage obligations⁽¹⁾		60,972		-		10,576		50,396		-
Municipal securities		69,489		927		1,053		69,363		450
Total held-to-maturity securities	$	708,273	$	975	$	127,734	$	581,514	$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2—Investment Securities—Continued

									Allowance
	Amortized		Gross Unrecognized						for Credit
(Dollars in thousands)	Cost		Gains		Losses		Fair Value		Losses
As of December 31, 2025
Mortgage-backed securities⁽¹⁾	$	586,001	$	88	$	115,773	$	470,316	$	-
Collateralized mortgage obligations⁽¹⁾		62,476		-		10,234		52,242		-
Municipal securities		70,164		1,011		997		70,178		450
Total held-to-maturity securities	$	718,641	$	1,099	$	127,004	$	592,736	$	450

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

The allowance for credit losses on held-to-maturity securities is a contra-asset valuation account that is deducted from the amortized cost basis of held-to-maturity securities to present the net amount expected to be collected. Management measures expected credit losses on held-to-maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regard to residential mortgage-backed securities issued by the U.S. government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S. government. Accordingly, no allowance for credit losses has been recorded for these securities. With regard to securities issued by States and political subdivisions and other held-to-maturity securities, management considers (i) issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) internal forecasts and (v) whether or not such securities are guaranteed or pre-refunded by the issuers.

The following tables show the gross unrealized losses for available-for-sale securities, for which an allowance for credit losses has not been recorded, that have been in an unrealized loss position for less than 12 months or 12 months or more:

					March 31, 2026
	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities	$	359	$	1	$	563	$	7	$	922	$	8
Mortgage-backed securities⁽¹⁾		418,622		2,277		67,673		17,417		486,295		19,694
Collateralized mortgage obligations⁽¹⁾		14,911		269		5,408		224		20,319		493
Municipal securities		3,980		19		-		-		3,980		19
Corporate securities		9,689		46		-		-		9,689		46
Total available-for-sale securities	$	447,561	$	2,612	$	73,644	$	17,648	$	521,205	$	20,260

⁽¹⁾All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

					December 31, 2025
	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale Securities
U.S. Government-sponsored securities	$	461	$	2	$	676	$	8	$	1,137	$	10
Mortgage-backed securities⁽¹⁾		60,935		244		75,647		17,476		136,582		17,720
Collateralized mortgage obligations⁽¹⁾		13,262		230		5,511		132		18,773		362
Total available-for-sale securities	$	74,658	$	476	$	81,834	$	17,616	$	156,492	$	18,092

⁽¹⁾ All mortgage-backed securities and collateralized mortgage obligations were issued by an agency or government sponsored entity of the U.S. Government.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2—Investment Securities—Continued

As of March 31, 2026, the Company held 323 available-for-sale securities of which 55 securities were in an unrealized loss position for less than twelve months and 99 securities were in an unrealized loss position for twelve months or more without an allowance for credit losses. Because the decline in fair value is attributable to changes in interest rates and not credit quality and because the Company does not have the intent to sell and it is likely that the Company will not be required to sell the securities prior to their anticipated recovery at maturity, it has been determined that there is no expected credit loss on these securities. Management evaluates the available-for-sale securities in an unrealized loss position, relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations.

The following tables present the activity in the allowance for credit losses for held-to-maturity securities by major type:

	March 31, 2026
(Dollars in thousands)	Municipal securities		Mortgage-backed securities		Collateralized mortgage obligations		Total
Allowance for credit losses - securities
Beginning balance	$	450	$	-	$	-	$	450
Provision for credit losses		-		-		-		-
Ending balance	$	450	$	-	$	-	$	450

	December 31, 2025
(Dollars in thousands)	Municipal securities		Mortgage-backed securities		Collateralized mortgage obligations		Total
Allowance for credit losses - securities
Beginning balance	$	450	$	-	$	-	$	450
Provision for credit losses		-		-		-		-
Ending balance	$	450	$	-	$	-	$	450

The amortized cost and estimated fair values of investment securities at March 31, 2026 by contractual final maturity are shown in the following table:

	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities maturing in:
One year or less	$	10,659	$	10,673	$	2,108	$	2,107
After one year through five years		20,371		20,417		18,044		17,977
After five years through ten years		44,050		44,698		17,983		17,196
After ten years		840,615		826,127		670,138		544,234
Total	$	915,695	$	901,915	$	708,273	$	581,514

Maturities are based on the final contractual payment dates, and do not reflect the impact of contractual monthly principal payments, prepayments or early redemptions that may occur. Expected maturities of mortgage-backed and CMO securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 2—Investment Securities—Continued

The Company monitors the credit quality of those held-to-maturity securities not issued by the U.S. government or one of its agencies or government sponsored entities, through the use of credit ratings. Credit ratings are reviewed and updated quarterly. Nonrated municipal investments consist primarily of bonds issued by political subdivisions such as housing authorities and reclamation districts. Nonrated municipal investments are monitored through financial covenants and review of repayment history. As of March 31, 2026, there were no past due principal or interest payments associated with held-to-maturity municipal securities. There were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following tables summarize the amortized cost of held-to-maturity municipal securities by credit rating as of the dates indicated:

	Held-to-Maturity
	Amortized Cost
(Dollars in thousands)	AAA/AA/A		BBB/BB/B		Not Rated		Total
March 31, 2026

Municipal securities	$	18,414	$	937	$	50,138	$	69,489
Total	$	18,414	$	937	$	50,138	$	69,489

	Held-to-Maturity
	Amortized Cost
(Dollars in thousands)	AAA/AA/A			BBB/BB/B			Not Rated			Total
December 31, 2025

Municipal securities		$	18,562		$	935		$	50,667		$	70,164
Total		$	18,562		$	935		$	50,667		$	70,164

Proceeds from sales and calls of investment securities were as follows:

	For the Three Months Ended March 31,
(Dollars in thousands)	2026		2025
Gross proceeds	$	-	$	160
Gross gains		-		-
Gross losses		-		-

Pledged Securities

At March 31, 2026, investment securities carried at $731.0 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $673.8 million at December 31, 2025.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases

Loans and leases as of the dates indicated consisted of the following:

(Dollars in thousands)	March 31, 2026			December 31, 2025
Loans and leases held for investment, net
Real estate:
Commercial	$	1,504,452		$	1,480,906
Agricultural		689,981			705,668
Residential and home equity		403,777			405,080
Construction		132,487			128,179
Total real estate		2,730,697			2,719,833
Commercial & industrial		462,196			497,700
Agricultural		261,279			264,117
Commercial leases		175,744			181,004
Consumer and other		4,640			4,671
Total gross loans and leases		3,634,556			3,667,325
Unearned income		(17,685	)		(18,380	)
Total net loans and leases		3,616,871			3,648,945
Allowance for credit losses		(76,918	)		(76,375	)
Total loans and leases held for investment, net	$	3,539,953		$	3,572,570

At March 31, 2026, the portion of loans that were approved for pledging as collateral on borrowing lines with the FHLB and the Federal Reserve Bank (“FRB”) were $1.4 billion and $1.4 billion, respectively. The borrowing capacity on these loans was $932.4 million from FHLB and $1.1 billion from the FRB at March 31, 2026.

The following tables show an aging analysis of the loan and lease portfolio, net of unearned income, by the time past due for the periods indicated:

	March 31, 2026
(Dollars in thousands)	30-89 Days Past Due		90+ Days Past Due		Non-accrual		Total Past Due and Nonaccrual		Current		Total		Non-accrual with no ACL
Loans and leases held for investment, net
Real estate:
Commercial	$	-	$	-	$	730	$	730	$	1,495,765	$	1,496,495	$	730
Agricultural		-		3,266		-		3,266		686,715		689,981		-
Residential and home equity		-		-		-		-		403,777		403,777		-
Construction		-		-		-		-		132,487		132,487		-
Total real estate		-		3,266		730		3,996		2,718,744		2,722,740		730
Commercial & industrial		-		-		-		-		462,196		462,196		-
Agricultural		-		-		-		-		261,279		261,279		-
Commercial leases		-		-		-		-		166,016		166,016		-
Consumer and other		10		-		-		10		4,630		4,640		-
Total loans and leases, net	$	10	$	3,266	$	730	$	4,006	$	3,612,865	$	3,616,871	$	730

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases—Continued

	December 31, 2025
(Dollars in thousands)	30-89 Days Past Due		90+ Days Past Due		Non-accrual		Total Past Due and Nonaccrual		Current		Total		Non-accrual with no ACL
Loans and leases held for investment, net
Real estate:
Commercial	$	7,248	$	-	$	750	$	7,998	$	1,464,585	$	1,472,583	$	750
Agricultural		-		-		-		-		705,668		705,668		-
Residential and home equity		-		-		-		-		405,080		405,080		-
Construction		-		-		-		-		128,179		128,179		-
Total real estate		7,248		-		750		7,998		2,703,512		2,711,510		750
Commercial & industrial		-		-		-		-		497,700		497,700		-
Agricultural		-		-		-		-		264,117		264,117		-
Commercial leases		1,659		-		-		1,659		169,288		170,947		-
Consumer and other		5		-		-		5		4,666		4,671		-
Total loans and leases, net	$	8,912	$	-	$	750	$	9,662	$	3,639,283	$	3,648,945	$	750

When borrowers are experiencing financial difficulty, the Company may agree to modify the contractual terms of a loan to a borrower in order to assist the borrower in repaying principal and interest owed to the Company. The Company’s modifications of loans to borrowers experiencing financial difficulty are generally in the form of term extensions, repayment plans, payment deferrals, forbearance agreements, interest rate reductions, forgiveness of interest and/or fees, or any combination thereof. Commercial loans modified to borrowers experiencing financial difficulty are primarily loans that are substandard or non-accrual, where the maturity date was extended and/or the modified interest rate and payment terms are not commensurate with the current market. Modifications on personal real estate loans are primarily those placed on forbearance plans, repayment plans, or deferral plans where monthly payments are suspended for a period of time or past due amounts are paid off over a certain period of time in the future or set up as a balloon payment at maturity. Modifications to certain credit card and other small consumer loans are often modified under debt counseling programs that can reduce the contractual rate or, in certain instances, forgive certain fees and interest charges. Other consumer loans modified to borrowers experiencing financial difficulty consist of various other workout arrangements with customers.

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FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases—Continued

The following table presents the amortized cost of loans that were both experiencing financial difficulty and modified, by portfolio segment and type of modification, during the periods presented. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each portfolio segment of financing receivable is also presented below:

	March 31, 2026
	Amortized cost associated with the following modification types:
(Dollars in thousands)	Maturity or term extension		Payment reduction		Multiple modification types¹		Total²		Percentage of total loan segment
Loans and leases held for investment, net
Real estate:
Commercial	$	-	$	730	$	-	$	730		0.05	%
Agricultural		-		-		-		-		0.00	%
Residential and home equity		-		-		37		37		0.01	%
Construction		-		-		-		-		0.00	%
Total real estate		-		730		37		767		0.03	%
Commercial & industrial		4,170		-		-		4,170		0.90	%
Agricultural		-		-		-		-		0.00	%
Commercial leases		-		-		-		-		0.00	%
Consumer and other		-		-		-		-		0.00	%
Total	$	4,170	$	730	$	37	$	4,937		0.14	%

¹ Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications.

² Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $0 million at March 31, 2026.

During the three months ended March 31, 2026, the Company modified one commercial real estate loan with a monthly payment reduction, two commercial and industrial loans with contractual term extensions of four and three months and one residential loan with an interest rate reduction and a contractual term extension of ten years.

	March 31, 2025
	Amortized cost associated with the following modification types:
(Dollars in thousands)	Maturity or term extension		Payment deferral		Multiple modification types¹		Total²		Percentage of total loan segment
Loans and leases held for investment, net
Real estate:
Commercial	$	-	$	-	$	-	$	-		0.00	%
Agricultural		983		-		1,656		2,639		0.36	%
Residential and home equity		-		-		-		-		0.00	%
Construction		-		-		-		-		0.00	%
Total real estate		983		-		1,656		2,639		0.10	%
Commercial & industrial		-		-		-		-		0.00	%
Agricultural		43		-		-		43		0.02	%
Commercial leases		-		-		-		-		0.00	%
Consumer and other		-		-		-		-		0.00	%
Total	$	1,026	$	-	$	1,656	$	2,682		0.07	%

¹ Includes modifications that resulted from a combination of interest rate reduction, maturity or term extension, principal forgiveness, and payment deferral modifications.

² Unfunded lending commitments related to loans modified to borrowers experiencing financial difficulty totaled $0 million at March 31, 2025.

Table of Contents

FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases—Continued

During the three months ended March 31, 2025, the Company modified one agricultural borrower with four agricultural real estate loans and one agricultural production loan. Two of the loans had the contractual term extended by six months and three loans had principal and interest deferrals of six months.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts. A payment default is defined as a loan having a payment past due 90 days or more after a modification took place. There was one loan modified within the last 12 months that had a payment default and was past due during the three months ended March 31, 2026.

The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL; therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification.

The Company assigns a risk rating to all loans and leases and periodically performs detailed reviews of all such loans and leases over a certain threshold to identify credit risks and assess overall collectability. For smaller balance loans and leases, such as consumer and residential real estate, a credit grade is established at inception, and then updated only when the loan or lease becomes contractually delinquent or when the borrower requests a modification. For larger balance loans and leases, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans and leases. These credit quality indicators are used to assign a risk rating to each individual loan or lease. These risk ratings can be grouped into five major categories, defined as follows:

Pass — A pass loan or lease is a strong credit with no existing or known potential weaknesses deserving of management’s close attention. This category also includes “Watch” loans, which is a loan with an emerging weakness in either the individual credit or industry that requires additional attention. A credit may also be classified Watch if cash flows have not yet stabilized, such as in the case of a development project.

Special mention — A special mention loan or lease has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date. Special mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard — A substandard loan or lease is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans or leases classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Well-defined weaknesses include a project’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project’s failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful — Loans or leases classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, highly questionable or improbable.

Table of Contents

FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases—Continued

Loss — Loans or leases classified as loss are considered uncollectible. Once a loan or lease becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Company will estimate its probable loss and immediately charge-off some or all of the balance.

The following tables present outstanding loan and lease balances held for investment net of unearned income by segment, credit risk rating categories, vintage year by segment of financing receivable, and current period gross charge-offs by year of origination as follows:

	March 31, 2026
	Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
Net loans and leases held for investment
Real estate:
Commercial
Pass	$	28,119	$	211,127	$	37,793	$	100,013	$	134,184	$	532,706	$	308,217	$	143,381	$	1,495,540
Special mention		-		225		-		-		-		-		-		-		225
Substandard		-		-		-		-		730		-		-		-		730
Total Commercial	$	28,119	$	211,352	$	37,793	$	100,013	$	134,914	$	532,706	$	308,217	$	143,381	$	1,496,495
Commercial
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural
Pass	$	897	$	45,684	$	23,762	$	33,334	$	61,256	$	192,470	$	272,571	$	49,622	$	679,596
Special mention		-		3,143		-		-		-		3,029		4,213		-		10,385
Substandard		-		-		-		-		-		-		-		-		-
Total Agricultural	$	897	$	48,827	$	23,762	$	33,334	$	61,256	$	195,499	$	276,784	$	49,622	$	689,981
Agricultural
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Residential and home equity
Pass	$	7,946	$	35,369	$	27,823	$	29,445	$	50,307	$	200,024	$	52,089	$	344	$	403,347
Special mention		-		-		-		-		-		25		-		-		25
Substandard		-		-		-		-		-		203		202		-		405
Total Residential and home equity	$	7,946	$	35,369	$	27,823	$	29,445	$	50,307	$	200,252	$	52,291	$	344	$	403,777
Residential and home equity
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction
Pass	$	-	$	-	$	-	$	-	$	-	$	1,375	$	117,212	$	13,900	$	132,487
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total construction	$	-	$	-	$	-	$	-	$	-	$	1,375	$	117,212	$	13,900	$	132,487
Construction
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Total Real estate	$	36,962	$	295,548	$	89,378	$	162,792	$	246,477	$	929,832	$	754,504	$	207,247	$	2,722,740

Commercial & industrial
Pass	$	1,691	$	38,518	$	16,266	$	27,974	$	15,494	$	17,236	$	312,178	$	28,588	$	457,945
Special mention		-		-		-		-		33		-		48		4,170		4,251
Substandard		-		-		-		-		-		-		-		-		-
Total Commercial & industrial	$	1,691	$	38,518	$	16,266	$	27,974	$	15,527	$	17,236	$	312,226	$	32,758	$	462,196
Commercial & industrial
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Table of Contents

FARMERS & MERCHANTS BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3—Loans and Leases—Continued

	March 31, 2026
	Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
Net loans and leases held for investment
Agricultural
Pass	$	-	$	301	$	2,688	$	2,178	$	1,621	$	2,947	$	241,017	$	10,457	$	261,209
Special mention		-		-		-		-		27		-		-		43		70
Substandard		-		-		-		-		-		-		-		-		-
Total Agricultural	$	-	$	301	$	2,688	$	2,178	$	1,648	$	2,947	$	241,017	$	10,500	$	261,279
Agricultural
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Commercial leases
Pass	$	637	$	24,854	$	28,241	$	65,506	$	20,832	$	25,946	$	-	$	-	$	166,016
Special mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total Commercial leases	$	637	$	24,854	$	28,241	$	65,506	$	20,832	$	25,946	$	-	$	-	$	166,016
Commercial leases
Current-period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer and other
Pass	$	515	$	1,178	$	365	$	485	$	211	$	935	$	769	$	-	$	4,458
Special mention		-		-		-		-		-		-		-		-		-
Substandard		173		-		-		-		-		9		-		-		182
Total Consumer and other	$	688	$	1,178	$	365	$	485	$	211	$	944	$	769	$	-	$	4,640
Consumer and other
Current-period gross charge-offs	$	8	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	8
Total net loans and leases
Pass	$	39,805	$	357,031	$	136,938	$	258,935	$	283,905	$	973,639	$	1,304,053	$	246,292	$	3,600,598
Special mention		-		3,368		-		-		60		3,054		4,261		4,213

FARMERS & MERCHANTS BANCORP 10-Q