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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 001-38084

FARMERS & MERCHANTS BANCORP, INC.

(Exact name of registrant as specified in its charter)

     Ohio

     34-1469491

     (State or other jurisdiction of
incorporation or organization)

     (IRS Employer
Identification No.)


307 North Defiance Street, Archbold, Ohio	43502
(Address of principal executive offices)	(Zip Code)

(419) 446-2501

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of Each Exchange
Common Stock, No Par Value	FMAO	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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 ☒

Indicate the number of shares of each of the issuers’ classes of common stock, as of the latest practicable date:


Common Stock, No Par Value	13,768,188
Class	Outstanding as of April 24, 2026

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10Q

FARMERS & MERCHANTS BANCORP, INC.

INDEX


Form 10-Q Items		Page
PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets - March 31, 2026 and December 31, 2025	3

	Condensed Consolidated Statements of Income - Three Months Ended March 31, 2026 and March 31, 2025	4

	Condensed Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2026 and March 31, 2025	6

	Condensed Consolidated Statements of Changes to Stockholders’ Equity - Three Months Ended March 31, 2026 and March 31, 2025	7

	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2026 and March 31, 2025	9

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46

Item 3.	Qualitative and Quantitative Disclosures About Market Risk	64

Item 4.	Controls and Procedures	65

PART II.	OTHER INFORMATION	65

Item 1.	Legal Proceedings	65

Item 1A.	Risk Factors	65

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

Item 3.	Defaults Upon Senior Securities	66

Item 4.	Mine Safety Disclosures	66

Item 5.	Other Information	66

Item 6.	Exhibits	67

Signatures		68

Exhibit 101.INS	Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.

PART 1 - FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	(In Thousands)
	March 31, 2026			December 31, 2025
	(Unaudited)
Assets
Cash and due from banks	$	172,847		$	97,249
Federal funds sold		623			469
Total cash and cash equivalents		173,470			97,718
Interest-bearing time deposits		1,253			1,498
Securities - available-for-sale		429,623			422,072
Other securities, at cost		12,672			13,032
Loans held for sale		5,579			3,934
Loans, net of allowance for credit losses of $27,830 and $27,688		2,654,135			2,685,990
Premises and equipment		31,534			31,864
Goodwill		86,358			86,358
Loan servicing rights		4,972			5,175
Other real estate owned		319			-
Bank owned life insurance		45,407			47,410
Other assets		40,247			39,331
Total Assets	$	3,485,569		$	3,434,382

Liabilities and Stockholders' Equity

Liabilities
Deposits
Noninterest-bearing	$	520,348		$	527,327
Interest-bearing
NOW accounts		910,723			876,151
Savings		753,289			729,472
Time		625,302			597,785
Total deposits		2,809,662			2,730,735
Securities sold under agreements to repurchase		14,762			37,718
Federal Home Loan Bank (FHLB) advances		218,987			227,377
Subordinated notes, net of unamortized issuance costs		34,962			34,933
Dividend payable		3,128			3,125
Accrued expenses and other liabilities		28,120			29,632
Total liabilities		3,109,621			3,063,520

Commitments and Contingencies

Stockholders' Equity
Common stock - No par value authorized 40,000,000 shares 3/31/26 and 12/31/25; issued 14,564,425 shares 3/31/26 and 12/31/25; outstanding 13,768,667 shares 3/31/26 and 13,748,074 shares 12/31/25		135,270			135,531
Treasury stock - 795,758 shares 3/31/26 and 816,351 shares 12/31/25		(10,403	)		(10,636	)
Retained earnings		264,607			257,855
Accumulated other comprehensive loss		(13,526	)		(11,888	)
Total stockholders' equity		375,948			370,862
Total Liabilities and Stockholders' Equity	$	3,485,569		$	3,434,382

See Notes to Condensed Consolidated Unaudited Financial Statements.

Note: The December 31, 2025, Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	(In Thousands, Except Per Share Data)
	Three Months Ended
	March 31, 2026			March 31, 2025
Interest Income
Loans, including fees	$	39,827		$	37,072
Debt securities:
U.S. Treasury and government agencies		2,305			2,097
Municipalities		349			382
Dividends		245			338
Federal funds sold and other		572			1,113
Total interest income		43,298			41,002
Interest Expense
Deposits		13,249			13,988
Federal funds purchased and securities sold under agreements to repurchase		145			271
Borrowed funds		2,176			2,550
Subordinated notes		284			284
Total interest expense		15,854			17,093
Net Interest Income - Before Provision for Credit Losses		27,444			23,909
Provision for Credit Losses - Loans		302			811
Provision for (Recovery) of Credit Losses - Off Balance Sheet Credit Exposures		6			(260	)
Net Interest Income - After Provision for Credit Losses		27,136			23,358
Noninterest Income
Customer service fees		483			381
Other service charges and fees		1,283			1,124
Interchange income		1,513			1,421
Loan servicing income		838			762
Net gain on sale of loans		575			284
Increase in cash surrender value of bank owned life insurance		655			244
Loss on sale of other assets owned		-			(54	)
Loss on sale of available-for-sale securities		(347	)		-
Total noninterest income		5,000			4,162

(continued)

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (Continued)


	(In Thousands, Except Per Share Data)
	Three Months Ended
	March 31, 2026		March 31, 2025
Noninterest Expense
Salaries and wages		8,267		7,878
Employee benefits		2,379		2,404
Net occupancy expense		1,169		1,199
Furniture and equipment		1,566		1,278
Data processing		994		557
Franchise taxes		400		397
ATM expense		576		491
Advertising		472		503
FDIC assessment		396		465
Servicing rights amortization - net		523		127
Loan expense		309		228
Consulting fees		254		745
Professional fees		500		559
Intangible asset amortization		305		445
Other general and administrative		1,691		1,484
Total noninterest expense		19,801		18,760
Income Before Income Taxes		12,335		8,760
Income Taxes		2,757		1,808
Net Income	$	9,578	$	6,952
Basic Earnings Per Share	$	0.70	$	0.51
Diluted Earnings Per Share	$	0.70	$	0.51
Dividends Declared	$	0.23000	$	0.22125

See Notes to Condensed Consolidated Unaudited Financial Statements

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	(In Thousands)
	Three Months Ended
	March 31, 2026			March 31, 2025
Net Income	$	9,578		$	6,952
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities		(2,420	)		6,464
Reclassification adjustment for realized loss on sale of available-for-sale securities		347			-
Net unrealized gain (loss) on available-for-sale securities		(2,073	)		6,464
Tax expense (benefit)		(435	)		1,358
Other comprehensive income (loss)		(1,638	)		5,106
Comprehensive Income	$	7,940		$	12,058

See Notes to Condensed Consolidated Unaudited Financial Statements

Farmers & Merchants Bancorp, Inc. and Subsidiaries

CONDENSED Consolidated StatementS of Changes TO Stockholders’ Equity

For the THREE Months Ended March 31, 2026

(IN THOUSANDS, Except Per Share Data)

(Unaudited)


													Accumulated
	Shares of												Other			Total
	Common			Common			Treasury			Retained			Comprehensive			Stockholders'
	Stock			Stock			Stock			Earnings			Loss			Equity
Balance - January 1, 2026		13,748,074		$	135,531		$	(10,636	)	$	257,855		$	(11,888	)	$	370,862
Net income		-			-			-			9,578			-			9,578
Other comprehensive loss		-			-			-			-			(1,638	)		(1,638	)
Purchase of treasury stock		(2,261	)		-			(57	)		-			-			(57	)
Issuance of 23,479 shares of restricted stock (Net of forfeitures - 625)		22,854			(592	)		290			302			-			-
Stock-based compensation expense		-			331			-			-			-			331
Cash dividends declared - $0.23 per share		-			-			-			(3,128	)		-			(3,128	)
Balance - March 31, 2026		13,768,667		$	135,270		$	(10,403	)	$	264,607		$	(13,526	)	$	375,948

See Notes to Condensed Consolidated Unaudited Financial Statements

Farmers & Merchants Bancorp, Inc. and Subsidiaries

CONDENSED Consolidated StatementS of Changes TO Stockholders’ Equity

For the THREE months Ended March 31, 2025

(IN THOUSANDS, Except Per Share Data)

(Unaudited)


													Accumulated
	Shares of												Other			Total
	Common			Common			Treasury			Retained			Comprehensive			Stockholders'
	Stock			Stock			Stock			Earnings			Loss			Equity
Balance - January 1, 2025		13,699,536		$	135,565		$	(10,985	)	$	235,854		$	(25,223	)	$	335,211
Net income		-			-			-			6,952			-			6,952
Other comprehensive income		-			-			-			-			5,106			5,106
Purchase of treasury stock		(981	)		-			(23	)		-			-			(23	)
Issuance of 20,731 shares of restricted stock (Net of forfeitures - 950)		19,781			(510	)		240			270			-			-
Stock-based compensation expense		-			352			-			-			-			352
Cash dividends declared - $0.22125 per share		-			-			-			(2,997	)		-			(2,997	)
Balance - March 31, 2025		13,718,336		$	135,407		$	(10,768	)	$	240,079		$	(20,117	)	$	344,601

See Notes to Condensed Consolidated Unaudited Financial Statements

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	(In Thousands)
	Three Months Ended
	March 31, 2026			March 31, 2025
Cash Flows from Operating Activities
Net income	$	9,578		$	6,952
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		982			986
Amortization (accretion) of premiums on available-for-sale securities, net		(78	)		93
Capitalized additions to servicing rights		(320	)		(276	)
Servicing rights amortization and impairment		523			127
Amortization of core deposit intangible		274			414
Amortization of customer list intangible		31			31
Net accretion of fair value adjustments		(365	)		(590	)
Amortization of subordinated note issuance costs		29			28
Stock-based compensation expense		331			352
Provision for credit losses - loans		302			811
Provision for (recovery of) credit losses - off balance sheet credit exposures		6			(260	)
Gain on sale of loans held for sale		(575	)		(284	)
Originations of loans held for sale		(23,828	)		(12,958	)
Proceeds from sale of loans held for sale		22,758			13,907
(Gain) loss on derivatives		7			(8	)
Loss on sale of other assets owned		-			54
Loss on sales of securities available-for-sale		347			-
Increase in cash surrender value of bank owned life insurance		(655	)		(244	)
Change in other assets and other liabilities, net		(1,696	)		1,874
Net cash provided by operating activities		7,651			11,009
Cash Flows from Investing Activities
Activity in available-for-sale securities:
Maturities, prepayments and calls		19,619			8,175
Sales		5,354			-
Purchases		(34,866	)		(13,816	)
Activity in other securities, at cost:
Purchases of FHLB stock		(521	)		(472	)
Proceeds from redemption of FHLB stock		881			810
Proceeds from bank owned life insurance		2,659			-
Change in interest-bearing time deposits		245			490
Additions to premises and equipment		(663	)		(386	)
Net decrease (increase) on loan originations and principal collections		30,998			(19,079	)
Net cash provided by (used in) investing activities		23,706			(24,278	)
Cash Flows from Financing Activities
Net change in deposits		78,927			13,519
Net change in federal funds purchased and securities sold under agreements to repurchase		(22,956	)		40
Proceeds from FHLB advances		32,180			-
Repayment of FHLB advances		(40,574	)		(585	)
Purchase of treasury stock		(57	)		(23	)
Cash dividends paid on common stock		(3,125	)		(2,996	)
Net cash provided by financing activities		44,395			9,955
Net Increase (Decrease) in Cash and Cash Equivalents		75,752			(3,314	)
Cash and Cash Equivalents - Beginning of year		97,718			176,351
Cash and Cash Equivalents - End of period	$	173,470		$	173,037

(continued)

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (Continued)


	(In Thousands)
	Three Months Ended
	March 31, 2026		March 31, 2025
Supplemental Information
Supplemental cash flow information:
Interest paid	$	16,857	$	17,567
Income taxes paid		-		2,210
Supplemental noncash disclosures:
Transfer of loans to other real estate owned		319		-
Cash dividends declared not paid		3,128		2,997

See Notes to Condensed Consolidated Unaudited Financial Statements

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 1 BASIS OF PRESENTATION AND OTHER

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X; accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that are expected for the year ended December 31, 2026. The condensed consolidated balance sheet of the Company as of December 31, 2025, has been derived from the audited consolidated balance sheet of the Company as of that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Farmers & Merchants Bancorp, Inc. (the "Company")'s Annual Report on Form 10-K for the year ended December 31, 2025.

The Company recognizes revenues as they are earned based on contractual terms, as transactions occur, or as services are provided and collectability is reasonably assured. The Company’s principal source of revenue is interest income from loans and investment securities. The Company also earns noninterest income from various banking and financial services offered primarily through Farmers & Merchants State Bank (the "Bank"). Interest income is primarily recognized on an accrual basis according to nondiscretionary formulas written in contracts, such as loan agreements or investment security contracts. The Company also earns noninterest income from various banking and financial services provided to business and consumer clients such as deposit account, debit card, and mortgage banking services. Revenue is recorded for noninterest income based on the contractual terms for the service or transaction performed.

NOTE 2 BUSINESS COMBINATION AND ASSET PURCHASE

Changes in accretable yield, or income expected to be collected, for the acquisition of Peoples Federal Savings and Loan completed in 2022, are as follows:


	(In Thousands)
	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Beginning Balance	$	104		$	335
Accretion		(58	)		(58	)
Ending Balance	$	46		$	277

Changes in accretable yield, or income expected to be collected, for the acquisition of Perpetual Federal Savings Bank completed in 2021, are as follows:


	(In Thousands)
	Three Months Ended March 31, 2026			Three Months Ended March 31, 2025
Beginning Balance	$	112		$	1,453
Accretion		(112	)		(336	)
Ending Balance	$	-		$	1,117

Changes in accretable yield, or income expected to be collected, for the acquisition of Ossian State Bank completed in 2021, are as follows:


	(In Thousands)
	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Beginning Balance	$	-	$	107
Accretion		-		(40	)
Ending Balance	$	-	$	67

The acquisition of Ossian State Bank resulted in the recognition of $980 thousand in core deposit intangible assets, the acquisition of Perpetual Federal Savings Bank resulted in the recognition of $668 thousand in core deposit intangible assets and the acquisition of Peoples Federal Savings and Loan resulted in the recognition of $6.0 million in core deposit intangible

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

assets which are all being amortized over its remaining economic useful life of 7 years on a straight line basis. Core deposit intangible is included in other assets on the condensed consolidated balance sheets.

The amortization expense of the core deposit intangible for the three months ended March 31, 2025 was $414 thousand of which $140 thousand was related to the acquisition of Bank of Geneva on January 1, 2019. Of the approximately $1.1 million to be expensed in 2026, $274 thousand has been expensed for the three months ended March 31, 2026. Annual amortization of core deposit intangible assets is as follows:



	Ossian		Perpetual		Peoples		Total
2026	$	140	$	95	$	861	$	1,096
2027		140		95		861		1,096
2028		47		72		861		980
2029						646		646
	$	327	$	262	$	3,229	$	3,818

The purchase of Adams County Financial Resources in 2020 resulted in the allocation of $800 thousand to customer list intangible, included in other assets, to be amortized over 6.5 years on a straight-line basis.

The amortization expense of the customer list intangible for the three months ended March 31, 2025 was $31 thousand. Of the $123 thousand to be expensed in 2026, $31 thousand has been expensed for the three months ended March 31, 2026. Annual amortization expense of customer list intangible is as follows:


	(In Thousands)
	Adams County Financial Resources
2026	$	123
2027		49
	$	172

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

NOTE 3 SECURITIES

Mortgage-backed securities, as shown in the following tables, are all government sponsored enterprises. The amortized cost and fair value of securities, with gross unrealized gains and losses at March 31, 2026 and December 31, 2025, are as follows:


	(In Thousands)
	March 31, 2026
	Amortized		Gross Unrealized		Gross Unrealized			Fair
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	101,629	$	17	$	(2,704	)	$	98,942
U.S. Government agencies		128,664		21		(4,059	)		124,626
Mortgage-backed securities		157,674		260		(8,199	)		149,735
State and local governments		58,777		44		(2,501	)		56,320
Total available-for-sale securities	$	446,744	$	342	$	(17,463	)	$	429,623


	(In Thousands)
	December 31, 2025
	Amortized		Gross Unrealized		Gross Unrealized			Fair
	Cost		Gains		Losses			Value
Available-for-Sale:
U.S. Treasury	$	91,988	$	157	$	(2,292	)	$	89,853
U.S. Government agencies		136,026		116		(4,181	)		131,961
Mortgage-backed securities		150,081		1,034		(7,733	)		143,382
State and local governments		59,025		71		(2,220	)		56,876
Total available-for-sale securities	$	437,120	$	1,378	$	(16,426	)	$	422,072

Information pertaining to securities with gross unrealized losses at March 31, 2026 and December 31, 2025, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:


	(In Thousands)
	March 31, 2026
	Less Than Twelve Months					Twelve Months & Over					Total
	Gross Unrealized			Fair		Gross Unrealized			Fair		Gross Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
U.S. Treasury	$	(373	)	$	48,877	$	(2,331	)	$	43,047	$	(2,704	)	$	91,924
U.S. Government agencies		-			-		(4,059	)		114,196		(4,059	)		114,196
Mortgage-backed securities		(319	)		41,647		(7,880	)		51,448		(8,199	)		93,095
State and local governments		(66	)		5,050		(2,435	)		43,816		(2,501	)		48,866
Total available-for-sale securities	$	(758	)	$	95,574	$	(16,705	)	$	252,507	$	(17,463	)	$	348,081

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)


	(In Thousands)
	December 31, 2025
	Less Than Twelve Months					Twelve Months & Over					Total
	Gross Unrealized			Fair		Gross Unrealized			Fair		Gross Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
U.S. Treasury	$	(5	)	$	7,038	$	(2,287	)	$	50,161	$	(2,292	)	$	57,199
U.S. Government agencies		-			-		(4,181	)		120,103		(4,181	)		120,103
Mortgage-backed securities		(50	)		8,214		(7,683	)		59,386		(7,733	)		67,600
State and local governments		(6	)		2,534		(2,214	)		45,202		(2,220	)		47,736
Total available-for-sale securities	$	(61	)	$	17,786	$	(16,365	)	$	274,852	$	(16,426	)	$	292,638

Unrealized losses on securities have not been recognized into income because the issuers’ bonds are of high credit quality, values have only been impacted by rate changes, and the Company has the intent and ability to hold the securities for the foreseeable future. The fair value is expected to recover as the bonds approach the maturity date.

Proceeds from sales of securities totaled approximately $5.4 million during the three months ended March 31, 2026, resulting in gross losses of $347 thousand. There were no sales of securities during the three months ended March 31, 2025. Below are the gross realized gains or losses for the three months ended March 31, 2026 and March 31, 2025.


	(In Thousands)
	Three Months Ended
	March 31, 2026			March 31, 2025
Gross realized gains	$	-		$	-
Gross realized losses		(347	)		-
Net realized losses	$	(347	)	$	-
Tax benefit related to net realized losses	$	(73	)	$	-

Net realized loss on sales and related tax benefit is reclassified out of accumulated other comprehensive loss. The net realized loss is included in net loss on sale of available-for-sale securities and the related tax benefit is included in income taxes in the condensed consolidated statements of income and comprehensive income.

The amortized cost and fair value of debt securities at March 31, 2026, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	(In Thousands)
	Amortized
	Cost		Fair Value
One year or less	$	71,057	$	70,371
After one year through five years		196,352		188,200
After five years through ten years		21,661		21,317
After ten years		-		-
Total	$	289,070	$	279,888
Mortgage-backed securities		157,674		149,735
Total	$	446,744	$	429,623

Investments with a carrying value of $246.5 million and $238.2 million at March 31, 2026 and December 31, 2025, respectively, were pledged to secure public deposits and securities sold under repurchase agreements. Investments with a carrying value of $27.3 million and $28.3 million were pledged to the Federal Reserve's Discount Window to provide additional borrowing capacity at March 31, 2026 and December 31, 2025, respectively.

Other securities include Federal Home Loan Bank of Cincinnati and Indianapolis stock in the amount of $12.7 million as of March 31, 2026 and $13.0 million as of December 31, 2025.

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

NOTE 4 LOANS

The Company had $5.6 million in loans held for sale at March 31, 2026 as compared to $3.9 million in loans held for sale at December 31, 2025.

Loan balances as of March 31, 2026 and December 31, 2025 are summarized below:


	(In Thousands)
Loans:	March 31, 2026			December 31, 2025
Consumer Real Estate	$	534,987		$	526,439
Agricultural Real Estate		215,846			217,034
Agricultural		228,730			218,050
Commercial Real Estate		1,315,549			1,355,571
Commercial and Industrial		309,046			314,405
Consumer		55,576			58,838
Other		22,564			23,133
		2,682,298			2,713,470
Less: Net deferred loan fees and costs		(1,436	)		(1,511	)
		2,680,862			2,711,959
Less: Allowance for credit losses		(27,830	)		(27,688	)
Plus: Basis adjustment related to fair value hedges		1,103			1,719
Loans - Net	$	2,654,135		$	2,685,990

Presented below are fixed rate loans and variable rate loans by portfolio segment as of March 31, 2026 and December 31, 2025:


	(In Thousands)
	March 31, 2026				December 31, 2025
	Fixed		Variable		Fixed		Variable
Consumer Real Estate	$	261,097	$	273,890	$	267,368	$	259,071
Agricultural Real Estate		103,515		112,331		104,902		112,132
Agricultural		64,195		164,535		63,789		154,261
Commercial Real Estate		774,705		540,844		800,127		555,444
Commercial and Industrial		141,300		167,746		147,465		166,940
Consumer		55,547		29		58,809		29
Other		13,263		9,301		13,709		9,424

Variable rate loans that have reached ceiling or floor limits are reported as fixed rate loans until such time as their rates adjust away from those limits.

Following are the characteristics and underwriting criteria for each major type of loan the Bank offers:

Consumer Real Estate: Purchase, refinance, or equity financing of one to four family owner occupied dwelling. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment, and other factors.

Agricultural Real Estate: Purchase of farm real estate or for permanent improvements to the farm real estate. Cash flow from the farm operation is the repayment source and is therefore subject to the financial success of the farm operation.

Agricultural: Loans for the production and housing of crops, fruits, vegetables, and livestock or to fund the purchase or refinance of capital assets such as machinery and equipment and livestock. The production of crops and livestock is especially vulnerable to commodity prices and weather.

Commercial Real Estate: Construction, purchase, and refinance of business purpose real estate. Risks include potential construction delays and overruns, vacancies, collateral value subject to market value fluctuations, interest rate, market demands, borrower’s ability to repay in orderly fashion, and other factors.

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

Commercial and Industrial: Loans to proprietorships, partnerships, or corporations to provide temporary working capital and seasonal loans as well as long term loans for capital asset acquisition. Risks include adequacy of cash flow, reasonableness of projections, financial leverage, economic trends, management ability and estimated capital expenditures during the fiscal year.

Consumer: Funding for individual and family purposes. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment and other factors.

Other: Primarily funds public improvements in the Bank’s service area. Repayment ability is based on the continuance of the taxation revenue as the source of repayment.

As of March 31, 2026 and December 31, 2025 one to four family residential mortgage loans amounting to $170.8 million and $175.8 million, respectively, and HELOC loans amounting to $16.0 million and $15.8 million, respectively, have been pledged as security for future loans and existing loans the Bank has received from the Federal Home Loan Bank "FHLB". The Bank has also pledged eligible commercial real estate loans of $231.6 million and $231.8 million as of March 31, 2026 and December 31, 2025, respectively, to the FHLB in addition to eligible multi-family real estate loans which amounted to $24.0 million and $29.1 million as of March 31, 2026 and December 31, 2025, respectively.

ITEM 1 NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Continued)

The following tables present the contractual aging at amortized cost in past due loans by portfolio segment of loans as of March 31, 2026 and December 31, 2025:


	(In Thousands)
March 31, 2026	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables

Consumer Real Estate	$	2,773	$	36	$	1,175	$	3,984	$	531,604	$	535,588
Agricultural Real Estate		903		5,380		376		6,659		208,988		215,647
Agricultural		2,602		765		1,493		4,860		224,158		229,018
Commercial Real Estate		151		-		-		151		1,312,941		1,313,092
Commercial and Industrial		20		41		-		61		308,692		308,753
Consumer		231		44		60		335

FARMERS & MERCHANTS BANCORP INC 10-Q