FARMERS NATIONAL BANC CORP /OH/ (FMNB)

CIK: 0000709337. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-05.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=709337. Latest filing source: 0001437749-26-007084.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000709337.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000709337.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001437749-26-015423.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

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

Cautionary Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are not statements of historical fact, but rather statements based on the Company’s current expectations, beliefs and assumptions regarding the future of Farmers’ business, future plans and strategies, projections, anticipated events and trends, its intended results and future performance, the economy and other future conditions. Forward-looking statements are preceded by terms such as “will,” “would,” “should,” “could,” “may,” “expect,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “project,” or variations of these words, or similar expressions. Forward-looking statements are not a guarantee of future performance and actual future results could differ materially from those contained in forward-looking information. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Numerous uncertainties, risks, and changes could cause or contribute to Farmers’ actual results, performance, and achievements to be materially different from those expressed or implied by the forward-looking statements.

Factors that could cause or contribute to such differences include, without limitation, risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (the “Commission”), including without limitation, the risk factors disclosed in Item 1A, “Risk Factors,” in the Company’s 2025 Form 10-K, as updated in Item 1A, “Risk Factors,” in this Quarterly Report on Form 10-Q.

Many of these factors are beyond the Company’s ability to control or predict, and readers are cautioned not to put undue reliance on those forward-looking statements. The following, which is not intended to be an all-encompassing list, summarizes several factors that could cause the Company’s actual results to differ materially from those anticipated or expected in any forward-looking statement:

•

general economic conditions in markets where the Company conducts business, which could materially impact credit quality trends;

•

the length and extent of the economic impacts of the ongoing conflict with Iran;

•

the length and extent of U.S. and foreign country tariff policies and their impact on global, national, and regional economic conditions; 

•

actions by the Federal Reserve Board, U.S. Treasury and other government agencies, including those that impact money supply, market interest rates and inflation;

•

disruptions in the mortgage and lending markets and significant or unexpected fluctuations in interest rates related to governmental responses to inflation, including financial stimulus packages and interest rate changes;

•

general business conditions in the banking industry;

•

the regulatory environment;

•

general fluctuations in interest rates;

•

demand for loans in the market areas where the Company conducts business;

•

rapidly changing technology and evolving banking industry standards;

•

competitive factors, including increased competition with regional and national financial institutions;

•

Farmers' ability to attract, recruit and retain skilled employees; and

•

new service and product offerings by competitors and price pressures.

Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in the presentation are reasonable, you should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. The Company does not undertake, and expressly disclaims, any obligation to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.  

Results of Operations. The following is a comparison of selected financial ratios and other results at or for the three month periods ended March 31, 2026 and 2025:

At or for the Three Months Ended

March 31,

(In Thousands, except Per Share Data)

2026

2025

Total assets

$

7,175,476

$

5,157,040

Net income

$

16,264

$

13,578

Diluted earnings per share

$

0.36

$

0.36

Return on average assets (annualized)

1.11

%

1.06

%

Return on average equity (annualized)

11.55

%

13.12

%

Dividends to net income

39.55

%

47.10

%

Net loans to assets

66.13

%

62.36

%

Loans to deposits

81.06

%

72.55

%

Net Income. The Company reported net income of $16.3 million, or $0.36 per diluted share, for the quarter ended March 31, 2026 compared to $13.6 million, or $0.36 per diluted share, for the quarter ended March 31, 2025. Net income for the first quarter of 2026 included a charge of $4.0 million related to the Merger with Middlefield and the conversion of our core system to Jack Henry. The new core platform contract will save the Company approximately $2.0 million per year, or $0.04 in diluted earnings per share, once the conversion is complete in August of 2026.  

Net Interest Income. The following schedule details the various components of net interest income for the periods indicated. All asset yields are calculated on a tax-equivalent basis where applicable. Security yields are based on amortized cost.

39

Table of Contents

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

Three Months Ended

Three Months Ended

March 31, 2026

March 31, 2025

AVERAGE

AVERAGE

BALANCE

INTEREST

RATE (1)

BALANCE

INTEREST

RATE (1)

EARNING ASSETS

Loans (2)

$

3,811,021

$

55,214

5.80

%

$

3,261,908

$

46,810

5.74

%

Taxable securities

1,177,183

7,773

2.64

%

1,135,580

7,096

2.50

%

Tax-exempt securities (2)

403,587

3,415

3.38

%

377,078

2,990

3.17

%

Other investments

51,720

761

5.89

%

44,170

541

4.90

%

Federal funds sold and other

102,808

681

2.65

%

73,575

510

2.77

%

TOTAL EARNING ASSETS

5,546,319

67,844

4.89

%

4,892,311

57,947

4.74

%

Nonearning assets

315,777

226,456

TOTAL ASSETS

$

5,862,096

$

5,118,767

INTEREST-BEARING LIABILITIES

Time deposits

$

811,760

$

6,629

3.27

%

$

733,406

$

6,632

3.62

%

Brokered time deposits

0

0

0.00

%

143,393

1,538

4.29

%

Savings deposits

1,490,444

6,507

1.75

%

1,115,259

4,012

1.44

%

Demand deposits - interest bearing

1,447,299

7,304

2.02

%

1,377,522

7,535

2.19

%

Total interest-bearing deposits

3,749,503

20,440

2.18

%

3,369,580

19,717

2.34

%

Short term borrowings

333,056

3,135

3.77

%

218,444

2,417

4.43

%

Long term borrowings

89,218

974

4.37

%

86,209

976

4.53

%

Total borrowed funds

422,274

4,109

3.89

%

304,653

3,393

4.45

%

TOTAL INTEREST-BEARING LIABILITIES

4,171,777

24,549

2.35

%

3,674,233

23,110

2.52

%

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY

Demand deposits - noninterest bearing

1,102,395

977,619

Other liabilities

24,876

52,894

Stockholders' equity

563,048

414,021

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

5,862,096

$

5,118,767

Net interest income and interest rate spread

$

43,295

2.54

%

$

34,837

2.22

%

Net interest margin

3.12

%

2.85

%

(1)

Rates are calculated on an annualized basis.

(2)

Interest on certain tax-exempt loans and tax-exempt securities in 2026 and 2025 is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 21%

Net Interest Income. Net interest income for the three months ended March 31, 2026, was $42.6 million compared to $34.2 million for the three months ended March 31, 2025. The Merger with Middlefield and a 27 basis point increase in the net interest margin were the primary reasons for this increase.

The net interest margin for the three-month period ended March 31, 2026, was 3.12% compared to 2.85% for the same period in 2025. Interest-earning asset yields increased 15 basis points in the first quarter of 2026 compared to the first quarter of 2025 while the cost of interest-bearing liabilities decreased 17 basis points when comparing these two periods. This decrease in interest-bearing liabilities resulted from a reduction in deposit costs of 18 basis points and a 56 basis point reduction in costs on borrowings rates in comparing the first quarter of 2025 to the first quarter of 2026.  

Provision for Credit Losses and Provision for Unfunded Loans. The provision for credit losses and unfunded loans was a benefit of $1.0 million for the three months ended March 31, 2026, compared to a benefit of $204,000 for the three months ended March 31, 2025. The provision in the first quarter of 2026 was positively impacted by improvements in qualitative factors in the Company’s CECL model. 

Noninterest Income. Noninterest income for the first quarter of 2026 was $13.7 million compared to $10.5 million for the first quarter of 2025. The increase was driven by the Middlefield acquisition, growth in the wealth lines of business and lower losses on the sale of securities. 

40

Table of Contents

Service charges on deposit accounts increased $208,000 to $2.0 million for the first quarter of 2026 compared to $1.8 million for the first quarter in 2025 primarily as a result of the Merger.   Bank owned life insurance income increased $682,000 during the first quarter of 2026 to $1.5 million compared to $810,000 in the first quarter of 2025.  Death claims were higher by $416,000 in 2026 compared to 2025 and the addition of Middlefield was primarily responsible for the remaining difference. Trust fees increased to $3.0 million at March 31, 2026, from $2.6 million at March 31, 2025.  The increase was due to continued growth in the business unit. Insurance agency commissions were $1.7 million both in the first quarter of 2026 and 2025.  Losses on the sale of securities totaled $18,000 in the first quarter of 2026 compared to losses on the sale of securities of $1.3 million during the first quarter of 2025.  The Company restructured $23.8 million of securities at the end of the first quarter of 2025 resulting in the loss realized on the sale.  Retirement plan consulting fees increased slightly to $886,000 in the first quarter of 2026 from $798,000 in the first quarter of 2025. Investment commissions grew $342,000 to $871,000 in the first quarter of 2026 compared to $529,000 in the first quarter of 2025.  The Company has a strong sales team in this line of business and is looking to grow with deeper penetration into newer markets.  Other mortgage banking income was $477,000 in the first quarter of 2026 compared to $147,000 in the first quarter of 2025.  This increase was primarily due to the Company recovering $303,000 of mortgage servicing rights impairment in the first quarter of 2026.  Debit card income grew from $1.9 million in the first quarter of 2025 to $2.0 million in the first quarter of 2026 as better volumes were realized in the current period.  Other noninterest income was $898,000 in the first quarter of 2026 compared to $1.2 million in the first quarter of 2025 primarily due to lower SBIC income in 2026.   

Noninterest Expense. Noninterest expense totaled $37.3 million for the quarter ended March 31, 2026 compared to $28.5 million for the quarter ended March 31, 2025. Salaries and employee benefits were $18.5 million in the first quarter of 2026 compar

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-03-05. Report date: 2025-12-31.

Results of Operations

Comparison of Operating Results for the Years Ended December 31, 2025 and 2024.

The Company recorded net income of $54.6 million for the year ended December 31, 2025, compared to $45.9 million for the year ended December 31, 2024. The Company reported $1.45 per diluted common share in 2025 compared to $1.22 per diluted common share in 2024.

Net Interest Income

The Company recognized net interest income of $142.4 million for the year ended December 31, 2025, compared to $128.4 million for the year ended December 31, 2024. The tax-equivalent net interest margin increased from 2.69% for 2024 to 2.95% for 2025. The increase in net interest margin was due to higher yields on interest earning assets and lower funding costs on interest bearing liabilities.  The Federal Reserve rate cuts late in 2024 and 2025 have benefited funding costs, while the lag effects of assets repricing continued to drive earning asset yields higher. 

Total interest income increased from $227.7 million in 2024 to $233.8 million for 2025. The increase was primarily due to an increase in the yield on loans and securities associated with the higher interest rate environment.

Interest income on loans increased to $191.0 million for the year ended December 31, 2025, compared to $185.7 million for the year ended December 31, 2024. This increase was due to better yields on loans which increased from 5.76% in 2024 to 5.82% in 2025.

The income on federal funds sold and other interest income decreased by $1.9 million in 2025 to $1.8 million compared to $3.7 million in 2024 primarily due to a volume decrease of $26.8 million in 2025 and a decrease of 128 basis points in the yield on the portfolio.

Interest expense declined $8.0 million in 2025 to $91.3 million from $99.4 million in 2024. The decrease was primarily due to a 15 basis point decline in the yield on interest-bearing deposits and a decrease in the volume of average borrowed funds which decreased from $381.2 million in 2024 to $260.6 million in 2025. 

29

Table of Contents

Average Balance Sheets and Related Yields and Rates

(Table Dollar Amounts in Thousands except Per Share Data)

Years ended December 31,

2025

2024

2023

AVERAGE

AVERAGE

AVERAGE

BALANCE

INTEREST

RATE

BALANCE

INTEREST

RATE

BALANCE

INTEREST

RATE

EARNING ASSETS

Loans (1) (2)

$

3,291,482

$

191,433

5.82

%

$

3,227,384

$

186,032

5.76

%

$

3,155,858

$

172,161

5.46

%

Taxable securities

1,140,462

29,491

2.59

1,110,905

26,838

2.42

1,143,547

26,231

2.29

Tax-exempt securities (1)

366,464

11,676

3.19

386,643

12,165

3.15

419,557

13,283

3.17

Other investments

41,809

1,930

4.62

35,402

1,450

4.10

39,559

1,986

5.02

Federal funds sold and other cash

69,534

1,802

2.59

96,288

3,727

3.87

74,950

2,476

3.30

Total earning assets

4,909,751

236,332

4.81

4,856,622

230,212

4.74

4,833,471

216,137

4.47

NONEARNING ASSETS

Noninterest-earning assets

254,563

234,297

205,683

Total Assets

$

5,164,314

$

5,090,919

$

5,039,154

INTEREST-BEARING LIABILITIES

Time deposits

$

753,803

$

26,699

3.54

%

$

745,945

$

29,329

3.93

%

$

654,717

$

19,462

2.97

%

Brokered time deposits

71,529

3,112

4.35

25,389

1,108

4.36

132,895

6,204

4.67

Savings deposits

1,158,663

17,578

1.52

1,095,470

16,144

1.47

1,113,561

9,899

0.89

Demand deposits - interest bearing

1,427,654

32,389

2.27

1,396,193

34,588

2.48

1,415,425

27,541

1.95

Total interest-bearing deposits

3,411,649

79,778

2.34

3,262,997

81,169

2.49

3,316,598

63,106

1.90

Short term borrowings

174,170

7,591

4.36

293,488

14,105

4.81

160,964

8,357

5.19

Long term borrowings

86,433

3,979

4.60

87,749

4,090

4.66

88,439

4,086

4.62

Total borrowed funds

260,603

11,570

4.44

381,237

18,195

4.77

249,403

12,443

4.99

Total Interest-Bearing Liabilities

3,672,252

91,348

2.49

3,644,234

99,364

2.73

3,566,001

75,549

2.12

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY

Demand deposits - noninterest bearing

$

998,255

981,115

1,065,389

Other Liabilities

52,896

58,134

50,302

Stockholders' equity

440,911

407,436

357,462

Total Liabilities and

Stockholders' Equity

$

5,164,314

$

5,090,919

$

5,039,154

Net interest income and interest rate spread

$

144,984

2.32

%

$

130,848

2.01

%

$

140,588

2.35

%

Net interest margin

2.95

%

2.69

%

2.91

%

(1)

Interest on certain tax-exempt loans and tax-exempt securities in 2025, 2024 and 2023 is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 21%.

(2)

Nonaccrual loans are included in the average balance totals.

30

Table of Contents

RATE AND VOLUME ANALYSIS

(Table Dollar Amounts in Thousands except Per Share Data)

The following table analyzes by rate and volume the dollar amount of changes in the components of the interest differential:

2025 change from 2024

2024 change from 2023

Net

Change Due

Change Due

Net

Change Due

Change Due

Change

To Volume

To Rate

Change

To Volume

To Rate

Tax Equivalent Interest Income

Loans

$

5,401

$

3,695

$

1,706

$

13,871

$

3,902

$

9,969

Taxable securities

2,653

714

1,939

607

(749

)

1,356

Tax-exempt securities

(489

)

(635

)

146

(1,118

)

(1,042

)

(76

)

Other investments

480

262

218

(536

)

(209

)

(327

)

Funds sold and other cash

(1,925

)

(1,036

)

(889

)

1,251

705

546

Total interest income

$

6,120

$

3,000

$

3,120

$

14,075

$

2,607

$

11,468

Interest Expense

Time deposits

$

(2,630

)

$

309

$

(2,939

)

$

9,867

$

2,712

$

7,155

Brokered time deposits

2,004

2,014

(10

)

(5,096

)

(5,019

)

(77

)

Savings deposits

1,434

931

503

6,245

(161

)

6,406

Demand deposits

(2,199

)

779

(2,978

)

7,047

(374

)

7,421

Short term borrowings

(6,514

)

(5,734

)

(780

)

5,748

6,880

(1,132

)

Long term borrowings

(111

)

(61

)

(50

)

4

(32

)

36

Total interest expense

$

(8,016

)

$

(1,762

)

$

(6,254

)

$

23,815

$

4,006

$

19,809

Increase (decrease) in tax equivalent net interest income

$

14,136

$

4,762

$

9,374

$

(9,740

)

$

(1,399

)

$

(8,341

)

The amount of change not solely due to rate or volume changes was allocated between the change due to rate and the change due to volume based on the relative size of the rate and volume changes.

Noninterest Income

Noninterest income increased to $46.1 million for the year ended December 31, 2025 compared to $41.7 million for the year ended December 31, 2024. The major categories of noninterest income are discussed below.

Service charges on deposit accounts decreased to $7.2 million for 2025 compared to $7.3 million in 2024 as overdraft fees lagged levels seen in 2024. 

Bank owned life insurance income increased by $726,000 in 2025 to $3.4 million, compared to $2.7 million for the twelve months ended December 31, 2024. The Company purchased $15.0 million in policies during the first quarter of 2025 and policy crediting rates have increased over the last twelve months.   

Trust fees increased to $11.1 million for the twelve months ended December 31, 2025, compared to $10.1 million for the twelve months ended December 31, 2024. The trust business continued to grow in 2025 as the value of assets under management increased.

Insurance agency commissions were $6.5 million in 2025 compared to $5.5 million in 2024.  The Company shared in the commission from the purchase of the new BOLI policies which added $432,000 to insurance commissions for the year. 

Retirement plan consulting fees increased to $3.7 million for 2025 compared to $2.6 million for 2024. The Company picked up additional business in 2025 with the acquisition of Crest in December of 2024.  Revenue from this business is expected to continue to increase in 2026.

31

Table of Contents

Security losses decreased to $2.2 million during the year ended December 31, 2025, from $2.6 million for the year ended December 31, 2024. The losses in 2025 were due to the Company restructuring securities in order to reinvest the proceeds into securities with a higher yield than those sold.

Net gains on the sale of loans increased by $148,000 rising from $1.5 million in 2024 to $1.7 million in 2025 driven by higher mortgage volume in 2025.  

Other mortgage banking income increased by $37,000 in 2025 compared to 2024. The increase was driven by higher servicing income partially offset by higher impairment and slower amortization of the mortgage servicing rights.

Debit card fees increased to $7.9 million in 2025 compared to $7.5 million in 2024. The increase was primarily due to higher volumes.

Other operating income decreased to $3.9 million for the twelve months ended December 31, 2025, from $4.7 million for the twelve months ended December 31, 2024. Small Business Investment Company ("SBIC") income was $1.8 million for 2025 compared to $2.1 million in 2024.  In addition, the Company recorded $565,000 in recoveries on loans that were charged off prior to acquisition in 2024 while the Company did not receive any recoveries in 2025. 

Noninterest Expenses

Noninterest expense totaled $116.5 million for the year ended December 31, 2025 compared to $106.7 million for the year ended December 31, 2024. The increase was primarily driven by system conversion and Merger related costs which increased from $92,000 in 2024 to $4.0 million in 2025.

Salaries and employee benefits increased by $3.4 million to $62.3 million for the year ended December 31, 2025 from $58.9 million for the year ended December 31, 2024. The increase was primarily driven by annual raises, the acquisition of Crest in the fourth quarter of 2024 and higher commission expense from increased revenue in the fee-based businesses. 

Occupancy and equipment expense increased to $17.1 million in 2025 from $15.6 million in 2024 due to increased maintenance and software costs in 2025. 

FDIC insurance and state and local taxes decreased to $4.7 million in 2025 from $5.0 million in 2024. The decline was due to lower FDIC expense as the Company had higher capital levels in 2025 resulting in lower expense.

System conversion and acquisition related costs increased from $92,000 in 2024 to $4.0 million in 2025.  The Company announced the plan to acquire Middlefield in October of 2025 along with its intention to convert its core system to Jack Henry.  The acquisition expense incurred in 2024 was related to the Company’s acquisition of Crest. 

Advertising costs increased to $1.8 million in 2025 from $1.5 million in 2024 for new marketing campaigns introduced in 2025.

Intangible amortization expense increased slightly by $38,000 to $2.9 million for the years ended December 31, 2025 and 2024. 

Other operating expense was steady at $13.7 million in 2025 compared to $13.8 million in 2024. The slight decrease was spread across several categories of expense.

Income Taxes

Income tax expense increased from $9.5 million for the year ended December 31, 2024, to $10.5 million for the year ended December 31, 2025. The increase was primarily due to higher pretax income partially offset by a lower effective tax rate due to increased tax credits investments. Income taxes are computed using the appropriate effective tax rates for each period. The effective tax rates are less than the statutory tax rate primarily due to nontaxable interest and dividend income. The effective income tax rate was 16.1% in 2025 and 17.1% for 2024. Refer to Note 18 to the Consolidated Financial Statements for additional information regarding the effective tax rate.

32

Table of Contents

Comparison of Operating Results for the Years Ended December 31, 2024 and 2023.

The Company recorded net income of $45.9 million for the year ended December 31, 2024, compared to $49.9 million for the year ended December 31, 2023. The Company reported $1.22 per diluted common share in 2024 compared to $1.33 per diluted common share in 2023. 

Net Interest Income

The Company recognized net interest income of $128.4 million for the twelve months ended December 31, 2024, compared to $137.8 million for the twelve months ended December 31, 2023. The tax-equivalent net interest margin declined from 2.91% for 2023 to 2.69% for the year ended December 31, 2024. The margin declined due to increased funding costs associated with the Federal Reserve's aggressive rate increases in 2022 and 2023 along with an inverted U.S treasury yield curve which caused deposit funding costs to rise faster than the yields being earned on loans and securities.

Total interest income increased from $213.3 million in 2023 to $227.7 million for the twelve months ended December 31, 2024. The increase was primarily due to an increase in the yield on loans and securities associated with the higher interest rate environment.

Interest income on loans increased to $185.7 million for the year ended December 31, 2024, compared to $171.8 million for the year ended December 31, 2023. This increase was due to better yields on loans which increased to 5.76% in 2024 from 5.46% in 2023.

The income on federal funds sold and other interest income increased by $1.3 million in 2024 to $3.7 million compared to $2.5 million in 2023 primarily due to a volume increase of $21.3 million in 2024 and an increase of 57 basis points in the yield on the portfolio.

Interest expense increased $23.8 million in 2024 to $99.4 million from $75.5 million in 2023 The increase was primarily due to a 59 basis point increase in the yield on interest-bearing deposits and an increase in the volume of average borrowed funds which increased from $249.4 million in 2023 to $381.2 million in 2024. The increase in deposit costs was driven by the movement of lower cost checking and savings deposits into certificates of deposit while the increase in borrowed funds was due to a lower level of brokered CDs utilized in 2024.

33

Table of Contents

Noninterest Income

Noninterest income declined slightly to $41.7 million for the year ended December 31, 2024 compared to $41.9 million for the year ended December 31, 2023. The major categories of noninterest income are discussed below.

Service charges on deposit accounts totaled $7.3 million in 2024 compared to $6.3 million in 2023. The increase was primarily due to the Company undertaking a review of all service charges in late 2023 and early 2024 and implementing fee increases across deposit product lines in the second quarter of 2024.

Bank owned life insurance income increased by $217,000 to $2.7 million for the twelve months ended December 31, 2024, compared to $2.4 million for the twelve months ended December 31, 2023. The increase was due to an increase of $241,000 from earnings on the policies offset by a decline in death benefits received from the policies. 

Trust fees increased to $10.1 million in 2024 from $9.0 million in 2023. The trust business continued to grow in 2024 as the value of assets under management increased.

Insurance agency commissions were $5.5 million in 2024 compared to $5.4 million in 2023. The increase was driven by better income from fixed annuity sales offset by declines in property and casualty commissions.

Retirement plan consulting fees increased to $2.6 million for 2024 compared to $2.5 million for 2023. The Company picked up additional business in 2024 and with the acquisition of Crest in December of 2024.

Security losses increased to $2.6 million during the year ended December 31, 2024, from $471,000 for the year ended December 31, 2023. The losses increased in 2024 due to the Company restructuring more securities in order to reinvest the proceeds into securities with a higher yield than those sold. 

The net gains on the sale of loans declined by $889,000 from 2023 at $2.5 million to $1.5 million in 2024. The primary reason for this decrease was the sale of nonaccrual commercial loans in 2023 that generated a gain of $915,000. There was no sale of commercial loans in 2024. Gains on the sale of loans continues to be negatively impacted by a lower level of saleable mortgage volume due to the higher interest rate environment and the lack of supply of homes for sale. 

Other mortgage banking income declined by $276,000 in 2024 compared to 2023. The decrease was driven by lower servicing income and faster amortization of the mortgage servicing rights.

Debit card fees increased to $7.5 million in 2024 compared to $7.1 million in 2023. The increase was primarily due to higher volumes.

Other operating income increased to $4.7 million for the twelve months ended December 31, 2024, from $4.5 million for the twelve months ended December 31, 2023. This increase was primarily due to decreased losses on the sale of assets offset by higher SBIC income in 2024 compared to 2023.

Noninterest Expenses

Noninterest expense totaled $106.7 million for the twelve months ended December 31, 2024 compared to $111.8 million for the twelve months ended December 31, 2023. The decline was primarily driven by merger related costs which fell from $5.5 million in 2023 to $92,000 in 2024.

Salaries and employee benefits increased to $58.9 million for the year ended December 31, 2024, an increase of $1.6 million, from $57.4 million for the year ended December 31, 2023. This increase was primarily due to salary increases and greater incentive compensation.

FDIC insurance and state and local taxes decreased to $5.0 million in 2024 from $5.8 million in 2023. The decline was due to lower FDIC expense as the Company had higher capital levels in 2024 resulting in lower expense.

34

Table of Contents

Advertising costs declined to $1.5 million in 2024 from $1.8 million in 2023. This decrease was due to a few marketing campaigns being reduced in 2024.

Intangible amortization expense decreased by $573,000 in 2024 to $2.9 million compared to $3.4 million for the year ended December 31, 2023. The decline was primarily driven by the runoff of intangibles from older acquisitions.

Other operating expenses increased by $306,000 to $13.8 million in 2024 compared to $13.5 million in 2023. The increase was spread across several categories of expense.

Income Taxes

Income tax expense increased to $9.5 million for the year ended December 31, 2024, from $8.8 million for the year ended December 31, 2023. The increase was primarily due to a higher effective tax rate and less benefit from low income housing tax credits. Income taxes are computed using the appropriate effective tax rates for each period. The effective tax rates are less than the statutory tax rate primarily due to nontaxable interest and dividend income. The effective income tax rate was 17.1% in 2024 and 14.9% for 2023. Refer to Note 18 to the Consolidated Financial Statements for additional information regarding the effective tax rate.

Loan Portfolio

Maturities and Sensitivities of Loans to Interest Rates

The following schedule shows the composition of loans and the percentage of loans in each category at the dates indicated. Balances include unamortized loan origination fees and costs.

Years Ended December 31,

2025

2024

2023

2022

2021

Commercial Real Estate

$

1,396,955

42.2

%

$

1,381,573

42.2

%

$

1,334,600

41.6

%

$

1,026,822

42.6

%

$

1,010,674

43.3

%

Commercial

341,737

10.3

351,533

10.8

347,819

10.9

294,406

12.2

312,532

13.4

Residential Real Estate

1,032,966

31.3

1,003,678

30.8

986,032

30.8

607,557

25.3

580,242

24.9

Consumer

266,735

8.1

268,533

8.2

267,875

8.4

228,794

9.5

195,343

8.4

Agricultural

266,320

8.1

263,029

8.0

261,801

8.2

247,171

10.3

232,291

10.0

Total Loans

$

3,304,713

100.0

%

$

3,268,346

100.0

%

$

3,198,127

100.0

%

$

2,404,750

100.0

%

$

2,331,082

100.0

%

35

Table of Contents

The following schedule sets forth maturities based on remaining scheduled repayments of principal for loans listed above as of December 31, 2025:

Types of Loans

1 Year or less

1 to 5 Years

5 to 15 Years

Over 15 Years

Commercial

$

36,599

$

158,738

$

91,131

$

55,269

Commercial Real Estate

$

180,613

$

517,266

$

600,640

$

98,436

Residential Real Estate

$

9,175

$

46,569

$

195,767

$

781,455

Consumer

$

3,087

$

118,409

$

128,937

$

16,302

Agricultural

$

4,083

$

36,337

$

47,549

$

178,351

The amounts of loans as of December 31, 2025, based on remaining scheduled repayments of principal, are shown in the following table:

Loan Sensitivities

1 Year or less

Over 1 Year

Total

Floating or Adjustable Rates of Interest

$

123,573

$

1,550,339

$

1,673,912

Fixed Rates of Interest

109,985

1,520,816

1,630,801

Total Loans

$

233,558

$

3,071,155

$

3,304,713

Total loans were $3.30 billion at December 31, 2025, compared to $3.27 billion at December 31, 2024, an increase of $36.4 million. Loans comprised 67.0% of the Bank’s average earning assets in 2025, compared to 66.5% in 2024.

Management recognizes that while the loan portfolio holds some of the Bank’s highest yielding assets, it is inherently the most risky portfolio. Accordingly, management attempts to balance credit risk versus return with conservative credit standards. Management has developed and maintains comprehensive underwriting guidelines and a loan review function that monitors credits during and after the approval process. To minimize risks associated with changes in the borrower’s future repayment capacity, the Bank generally requires scheduled periodic principal and interest payments on all types of loans and normally requires collateral.

Commercial real estate loans increased to $1.40 billion at December 31, 2025 from $1.38 billion at December 31, 2024. The Company’s commercial real estate loan portfolio includes loans for owner occupied and non-owner occupied real estate. These loans are made to finance properties such as office and industrial buildings, hotels and retail shopping centers.

36

Table of Contents

The following tables present the amortized cost basis of the Company's commercial real estate portfolio segment by industry, inclusive of farmland, as of December 31, 2025 and 2024:

Weighted

% of

Average

Weighted

Amortized

Commercial

% of Total

Loan-to-

Average

(In Thousands of Dollars)

Cost

Real Estate

Portfolio

Value

Occupancy

December 31, 2025

Commercial real estate

Retail

$

337,257

20.97

%

10.21

%

51.86

%

87.81

%

Farmland

211,231

13.13

%

6.39

%

48.61

%

100.00

%

Warehouse/Industrial

236,391

14.70

%

7.15

%

52.50

%

93.23

%

Office

191,765

11.92

%

5.80

%

59.74

%

81.76

%

Multifamily

171,956

10.69

%

5.20

%

59.15

%

72.03

%

Medical

141,396

8.79

%

4.28

%

55.31

%

93.83

%

Hotel

44,356

2.76

%

1.34

%

44.15

%

75.81

%

Special Purpose

78,533

4.88

%

2.38

%

53.62

%

98.62

%

Restaurant

44,583

2.77

%

1.35

%

52.52

%

100.00

%

Multifamily - Construction

62,595

3.89

%

1.89

%

55.98

%

27.46

%

All Other

88,123

5.48

%

2.67

%

46.51

%

96.04

%

Total

$

1,608,186

100.00

%

48.66

%

Weighted

% of

Average

Weighted

Amortized

Commercial

% of Total

Loan-to-

Average

(In Thousands of Dollars)

Cost

Real Estate

Portfolio

Value

Occupancy

December 31, 2024

Commercial real estate

Retail

$

345,354

21.75

%

10.57

%

53.93

%

85.07

%

Farmland

206,600

13.01

%

6.32

%

49.63

%

100.00

%

Warehouse/Industrial

186,316

11.73

%

5.70

%

54.26

%

72.23

%

Office

192,269

12.11

%

5.88

%

53.70

%

74.06

%

Multifamily

158,168

9.96

%

4.84

%

61.16

%

85.75

%

Medical

147,353

9.28

%

4.51

%

46.27

%

92.60

%

Hotel

44,301

2.79

%

1.36

%

45.24

%

79.65

%

Special Purpose

85,361

5.37

%

2.61

%

51.83

%

98.53

%

Restaurant

50,990

3.21

%

1.56

%

51.36

%

100.00

%

Multifamily - Construction

73,857

4.65

%

2.26

%

53.28

%

29.61

%

All Other

97,605

6.14

%

2.99

%

48.05

%

94.97

%

Total

$

1,588,174

100.00

%

48.60

%

Residential real estate mortgage loans increased to $1.03 billion at December 31, 2025, from $1.0 billion at December 31, 2024. Farmers originated both fixed rate and adjustable rate mortgages during 2025. Fixed rate terms are offered with terms between fifteen and thirty years while adjustable rate products are offered with maturities up to thirty years. The Company sells all fixed rate loans that are secondary market eligible.

Commercial loans at December 31, 2025, totaled $341.7 million compared to $351.5 million at December 31, 2024. The Bank’s commercial loans are granted to customers within the immediate trade area of the Bank. The mix is diverse, covering a wide range of borrowers, business types and local municipalities. The Bank monitors and controls concentrations within a particular industry or segment of the economy. These loans are made for purposes such as equipment purchases, capital and leasehold improvements, the purchase of inventory, general working capital and small business lines of credit.

37

Table of Contents

Agricultural loans increased from $263.0 million in 2024 to $266.3 million in 2025. The Company’s agricultural loan portfolio contains a diverse mix of dairy, crops, land, poultry and cattle loans.

Consumer loans decreased to $266.7 million at December 31, 2025, from $268.5 million at December 31, 2024. The consumer loan portfolio includes indirect auto loans and other consumer loan products.

Summary of Credit Loss Experience

The following is an analysis of the allowance for credit losses for the years 2021 through 2025:

Years Ended December 31,

2025

2024

2023

2022

2021

Balance at Beginning of Year

$

35,863

$

34,440

$

26,978

$

29,386

$

22,144

Charge-Offs:

Commercial Real Estate

(4,565

)

(4,619

)

(349

)

(300

)

(70

)

Commercial

(1,491

)

(1,742

)

(1,272

)

(2,042

)

(388

)

Residential Real Estate

(268

)

(155

)

(384

)

(92

)

(297

)

Consumer

(1,183

)

(1,471

)

(932

)

(870

)

(912

)

Total Charge-Offs

(7,507

)

(7,987

)

(2,937

)

(3,304

)

(1,667

)

Recoveries on Previous Charge-Offs:

Commercial Real Estate

22

22

1

3

33

Commercial

558

520

103

75

199

Residential Real Estate

110

177

81

89

162

Consumer

476

447

496

479

411

Total Recoveries

1,166

1,166

681

646

805

Net Charge-Offs

(6,341

)

(6,821

)

(2,256

)

(2,658

)

(862

)

Impact of CECL adoption

0

0

0

0

2,160

Provision For Credit Losses and Day One Purchase entry

7,289

8,244

9,718

250

5,944

Balance at End of Year

$

36,811

$

35,863

$

34,440

$

26,978

$

29,386

Ratio of Net Commercial Real Estate Charge-offs To Average Loans Outstanding

0.14

%

0.14

%

0.01

%

0.01

%

0.00

%

Ratio of Net Commercial Charge-offs To Average Loans Outstanding

0.03

%

0.04

%

0.04

%

0.08

%

0.01

%

Ratio of Net Residential Real Estate Charge-offs To Average Loans Outstanding

0.00

%

0.00

%

0.01

%

0.00

%

0.01

%

Ratio of Net Consumer Charge-offs To Average Loans Outstanding

0.02

%

0.03

%

0.01

%

0.02

%

0.02

%

Allowance for Credit Losses/Total Loans

1.11

1.10

1.08

1.12

1.26

The provision for credit losses, which includes the provision for unfunded commitments, declined to $7.1 million in 2025 compared to $8.0 million in 2024. This decline was attributed to a reduction in net charge offs from $6.8 million in 2024 to $6.3 million in 2025, reduction due to pool migration where the allocated reserve decreased from $1.3 million in 2024 to a release of reserves of $407,000 in 2025, and a reduction due to adjustments in Portfolio Composition and Growth qualitative factor from $844,000 in 2024 to a release of reserves of $1.7 million in 2025. Offsetting this was an increase in specific reserve for individually evaluated credits of $2.4 million from $1.1 million in 2024 to $3.5 million in 2025, and an increase in historical loss ratios where the allocated reserve increased from a release of reserves of $238,000 in 2024 to an increase in reserves of $1.1 million in 2025. The increased specific reserve was driven by $2.1 million for two individually evaluated commercial real estate non-owner occupied relationships.

The Company adopted ASU 2016-13 in 2021, to calculate the allowance for credit losses (“ACL”) which requires estimating credit losses over the life of the credits. The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of any underlying collateral.

38

Table of Contents

The credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments. These segments are disaggregated into the loan pools for monitoring. A model of risk characteristics, such as loss history and delinquency experience, trends in past due and non-performing loans, as well as existing economic conditions and supportable forecasts are used to determine credit loss assumptions.

The Company uses two methodologies to analyze loan pools. The cohort method (“cohort”) and the probability of default/loss given default method (“PD/LGD”). Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but are not limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios.

The probability of default (“PD”) portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual, or is partially or wholly, charged-off. Typically, a one-year time period is used to assess PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default (“LGD”) is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios.

The allowance for credit losses to total loans increased to 1.11% at December 31, 2025, compared to 1.10% at December 31, 2024. Nonperforming loans to total loans increased from 0.70% at December 31, 2024 to 0.79% at December 31, 2025. Nonperforming loans to total loans increased in 2025 primarily due to a single commercial real estate relationship totaling $4.4 million moving into nonaccrual status.

The provision for credit losses is based on management’s judgment after taking into consideration all factors connected with the collectability of the existing loan portfolio. Management evaluates the loan portfolio in light of economic conditions, changes in the nature and volume of the loan portfolio, industry standards and other relevant reasonable and supportable forecasts. Specific factors considered by management in determining the amounts charged to operating expenses include previous charge-off experience, the status of past due interest and principal payments, the quality of financial information supplied by loan customers and the general condition of the industries in the community to which loans have been made.

The allowance for credit losses increased to $36.8 million at December 31, 2025, compared to $35.9 million at December 31, 2024. The increase was primarily driven by the specific reserve for two individually evaluated commercial real estate non-owner occupied relationships.

Typically, commercial and commercial real estate loans are identified as collateral dependent when they become ninety days past due, or earlier if management believes it is probable that the Company will not collect all amounts due under the terms of the loan agreement. When Farmers identifies a loan and concludes that the loan is collateral dependent, Farmers performs an internal collateral valuation as an interim measure. Farmers typically obtains an external appraisal to validate its internal collateral valuation as soon as is practical and adjusts the associated loss reserve, if necessary.

39

Table of Contents

The following table summarizes the Company’s nonperforming loans and nonperforming assets for the years ending 2021 through 2025:

Nonperforming Assets

December 31,

2025

2024

2023

2022

2021

Nonaccrual loans:

Commercial Real Estate

$

15,830

$

10,642

$

5,852

$

4,057

$

3,004

Commercial

2,778

3,858

1,802

3,840

7,190

Residential Real Estate

4,537

4,983

3,807

3,438

4,280

Consumer

641

600

461

494

682

Agricultural

2,076

2,120

2,486

2,482

314

Total Nonaccrual Loans

$

25,862

$

22,203

$

14,408

$

14,311

$

15,470

Loans Past Due 90 Days or More

353

615

655

492

725

Total Nonperforming Loans

$

26,215

$

22,818

$

15,063

$

14,803

$

16,195

Repossessed assets

103

33

166

73

0

Total Nonperforming Assets

$

26,318

$

22,851

$

15,229

$

14,876

$

16,195

Percentage of Nonperforming Loans to Total Loans

0.79

%

0.70

%

0.47

%

0.62

%

0.69

%

Percentage of Nonperforming Assets to Total Assets

0.50

%

0.45

%

0.30

%

0.36

%

0.39

%

Loans Delinquent 30-89 days

$

16,947

$

13,032

$

16,705

$

9,605

$

8,891

Percentage of Loans Delinquent 30-89 days to Total Loans

0.51

%

0.40

%

0.52

%

0.40

%

0.38

%

Percentage of Nonaccrual Loans to Total Loans

0.78

%

0.68

%

0.45

%

0.60

%

0.66

%

Percentage of Allowance for Credit Losses to Nonaccrual Loans

142.34

%

161.52

%

239.03

%

188.51

%

189.94

%

The following table summarizes the Company’s allocation of the allowance for credit losses under CECL for the years 2021 through 2025:

December 31,

2025

2024

2023

2022

2021

Loans to

Loans to

Loans to

Loans to

Loans to

Total

Total

Total

Total

Total

Amount

Loans

Amount

Loans

Amount

Loans

Amount

Loans

Amount

Loans

Commercial Real Estate

$

20,064

48.7

%

$

19,259

48.6

%

$

18,150

48.1

%

$

14,840

50.5

%

$

15,879

51.0

%

Commercial

4,536

12.0

4,628

12.4

5,086

12.6

4,186

14.6

4,949

15.7

Residential Real Estate

7,241

31.3

7,271

30.7

6,917

30.8

4,374

25.3

4,870

24.9

Consumer

4,970

8.0

4,705

8.3

4,287

8.5

3,578

9.6

3,688

8.4

$

36,811

100

%

$

35,863

100

%

$

34,440

100

%

$

26,978

100

%

$

29,386

100

%

The allowance allocated to each of the four loan categories should not be interpreted as an indication that charge-offs in 2025 occurred in the same proportions or that the allocation indicates future charge-off trends. The allowance allocated to the one-to-four family real estate loan category and the consumer loan category is based upon the Company’s allowance methodology for homogeneous loans, and increases and decreases in the balances of those portfolios. For the commercial real estate and commercial categories, which represent 42.3% and 10.3% of the total loan portfolio in 2025, respectively, management relies on the Bank’s internal loan review procedures and allocates accordingly based on loan classifications. The gross charge-offs in the commercial real estate portfolio, were $4.6 million for 2025, which represented approximately 60.8% of the gross losses for the entire loan portfolio.

There were no loans other than those identified above, that management has known information about possible credit problems of borrowers and their ability to comply with the loan repayment terms. Management is actively monitoring certain borrowers’ financial condition and loans which management wants to more closely monitor due to special circumstances. These loans and their potential loss exposure have been considered in management’s analysis of the adequacy of the allowance for credit losses.

40

Table of Contents

Loan Commitments and Lines of Credit

In the normal course of business, the Bank has extended various commitments for credit. Commitments for mortgages, revolving lines of credit and letters of credit generally are extended for a period of one month up to one year. Normally, no fees are charged on any unused portion, but an annual fee of two percent is charged for the issuance of a letter of credit.

As of December 31, 2025, there were no concentrations of loans exceeding 10% of total loans that are not disclosed as a category of loans. As of that date, there were also no other interest-earning assets that are either nonaccrual, past due, restructured or non-performing.

Investment Securities

The debt securities available for sale increased $76.9 million in 2025 to $1.34 billion at December 31, 2025, from $1.27 billion at December 31, 2024. For additional information regarding Farmers’ investment securities see Note 3 to the Consolidated Financial Statements.

The following table shows the carrying value of investment securities by type of obligation at the dates indicated:

December 31,

2025

2024

U.S. Treasury securities

$

55,397

$

52,606

U.S. government sponsored enterprise debt securities

39,898

62,501

Mortgage-backed securities - residential and collateralized mortgage obligations

729,350

626,643

Small Business Administration

2,070

2,475

Obligations of states and political subdivisions

503,697

504,880

Corporate bonds

13,045

17,448

Debt securities available for sale

$

1,343,457

$

1,266,553

Other investments

15,866

14,736

Total securities

$

1,359,323

$

1,281,289

41

Table of Contents

A summary of debt securities held at December 31, 2025 classified according to maturity and including weighted average yield for each range of maturities is set forth below:

December 31, 2025

Type and Maturity Grouping

Fair Value

Weighted Average Yield

U.S. Treasury securities

Maturing within one year

$

0

0.00

%

Maturing after one year but within five years

37,472

1.04

%

Maturing after five years but within ten years

17,925

1.21

%

Maturing after ten years

0

0.00

%

Total U.S. Treasury securities

$

55,397

1.10

%

U.S. government sponsored enterprise debt securities

Maturing within one year

$

0

0.00

%

Maturing after one year but within five years

621

2.07

%

Maturing after five years but within ten years

37,784

2.41

%

Maturing after ten years

1,493

4.44

%

Total U.S. government sponsored enterprise debt securities

$

39,898

2.48

%

Mortgage-backed securities - residential and collateralized mortgage obligations (1)

Maturing within one year

$

4

3.20

%

Maturing after one year but within five years

2,873

2.29

%

Maturing after five years but within ten years

30,164

1.90

%

Maturing after ten years

696,309

2.94

%

Total mortgage-backed securities

$

729,350

2.89

%

Small Business Administration

Maturing within one year

$

0

0.00

%

Maturing after one year but within five years

0

0.00

%

Maturing after five years but within ten years

1,512

2.15

%

Maturing after ten years

558

1.94

%

Total small business administration

$

2,070

2.10

%

Obligations of states and political subdivisions

Maturing within one year

$

1,002

4.26

%

Maturing after one year but within five years

5,385

3.23

%

Maturing after five years but within ten years

102,628

3.18

%

Maturing after ten years

394,682

2.87

%

Total obligations of states and political subdivisions

$

503,697

2.94

%

Corporate bonds

Maturing within one year

$

683

8.15

%

Maturing after one year but within five years

9,265

6.48

%

Maturing after five years but within ten years

3,097

8.90

%

Maturing after ten years

0

0.00

%

Total corporate bonds

$

13,045

7.14

%

(1)

Payments based on contractual maturity.

Premises and Equipment

Premises and equipment increased $4.6 million from $52.3 million at December 31, 2024, to $56.9 million at December 31, 2025. This increase was primarily due to the construction of additional office space at the Company's headquarters in Canfield, OH, partially offset by depreciation.

Bank Owned Life Insurance

The Company owns bank owned life insurance policies on the lives of certain members of management. The purpose of this investment is to help offset the costs of employee benefit plans. The cash surrender value of these policies increased to $119.4 million at December 31, 2025, compared to $101.4 million at December 31, 2024. This increase resulted from the purchase of an additional $15.0 million in policies in 2025. 

42

Table of Contents

Deposits

Total deposits increased to $4.34 billion at December 31, 2025, from $4.23 billion at December 31, 2024, an increase of $76.0 million. Noninterest bearing deposits increased $28.6 million during 2025 to $994.1 million from $965.5 million. Interest-bearing deposits increased $122.3 million to $3.35 billion at December 31, 2025, compared to $3.23 billion at December 31, 2024. The increase was primarily due to an increase in money market accounts of $113.1 million. The Company paid off its brokered deposits in 2025 to take advantage of lower cost funding opportunities.  

Average balances and average rates paid on deposits are as follows:

Years Ended December 31

2025

2024

2023

Amount

Rate

Amount

Rate

Amount

Rate

Noninterest-bearing demand

$

998,255

0.00

%

$

981,115

0.00

%

$

1,065,389

0.00

%

Interest-bearing demand

1,427,654

2.27

%

1,396,193

2.48

%

1,415,425

1.95

%

Money market

745,011

2.34

%

659,807

2.43

%

602,445

1.62

%

Savings

413,652

0.03

%

435,663

0.03

%

511,116

0.03

%

Brokered time deposits

71,529

4.35

%

25,389

4.36

%

132,895

4.67

%

Certificates of deposit

753,803

3.54

%

745,945

3.93

%

654,717

2.97

%

Total

$

4,409,904

1.81

%

$

4,244,112

1.91

%

$

4,381,987

1.44

%

The following table sets forth the maturities of retail certificates of deposit having principal amounts $250,000 or greater at December 31, 2025 (in thousands):

Retail certificates of deposit maturing in quarter ending:

March 31, 2026

$

131,997

June 30, 2026

112,815

September 30, 2026

17,079

December 31, 2026

20,936

After December 31, 2026

22,989

Total retail certificates of deposit with balances $250,000 or greater

$

305,816

Uninsured deposits for bank and savings and loan registrants are U.S. federally insured depository institutions as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit or similar state deposit insurance regimes and amounts in any other uninsured investment or deposit account that are classified as deposits and not subject to any federal or state deposit insurance regimes. Deposits in amounts in excess of the FDIC insurance limit were $1.49 billion, or 33.8% of total deposits at December 31, 2025.

Short-Term Borrowings

The Company's short-term borrowings decreased by $24.0 million from $305.0 million at December 31, 2024, to $281.0 million at December 31, 2025. This decrease was funded by the increase in deposits in 2025. The Company uses short term borrowings to manage the ongoing fluctuations with loans and deposits, when necessary.

Long-Term Borrowings

Total long-term borrowings increased $583,000 to $86.7 million at December 31, 2025, from $86.2 million at December 31, 2024. In 2024, the Company bought back and retired $3.0 million of its outstanding subordinated notes. The Company may, at its option, beginning December 15, 2026, redeem additional portions of the notes, in whole or in part, from time to time, subject to certain conditions.  See Note 13 to the consolidated Financial Statements additional detail.

43

Table of Contents

Stockholders’ Equity

Total stockholders’ equity increased $79.7 million from $406.0 million at December 31, 2024, to $485.7 million at December 31, 2025. The increase was primarily due to net income of $54.6 million and a decrease in accumulated other comprehensive loss of $49.2 million offset by dividends paid on common stock of $25.6 million.

Contractual Obligations, Commitments, Contingent Liabilities and Off-Balance Sheet Arrangements

The following table presents, as of December 31, 2025, the Company’s significant fixed and determinable contractual obligations by payment date. The payment amounts represent those amounts contractually due to the recipient and do not include any unamortized premiums or discounts or other similar carrying value adjustments. Further discussion of the nature of each obligation is included in the referenced note to the Consolidated Financial Statements.

Commitments

12/31/2025

Note

Ref.

2026

2027

2028

2029

2030

Thereafter

Deposits without maturity

$

3,576,016

Certificates of deposit and brokered time deposits

11

720,109

$

20,946

$

13,449

$

5,044

$

4,887

$

2,327

Long-term borrowings

13

0

0

0

0

0

90,000

Leases

9

1,380

1,248

1,190

1,076

922

3,869

There are also $19.5 million of unfunded commitments to various partnership investment funds. The Company invests in these funds, consisting of affordable housing tax credit investments and SBIC funds, in efforts to comply with CRA regulations. The commitments have no predetermined due dates but are expected to be funded sporadically over the next ten years. Note 14 to the Consolidated Financial Statements discusses in greater detail other commitments and contingencies and the various obligations that exist under those agreements. Examples of these commitments and contingencies include commitments to extend credit and standby letters of credit.

Management’s policy is to not engage in derivatives contracts for speculative trading purposes. The Company does utilize interest-rate swaps as a way of helping manage interest rate risk and not as derivatives for trading purposes. See Note 22 of the consolidated Financial Statements for additional detail.

Liquidity

The principal sources of funds for the Bank are deposits, loan and security repayments, borrowings from financial institutions, repurchase agreements and other funds provided by operations. The Bank also has the ability to borrow from the FHLB. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan prepayments are more influenced by interest rates, general economic conditions and competition. Investments in liquid assets maintained by the Company and the Bank are based upon management’s assessment of (1) the need for funds, (2) expected deposit flows, (3) yields available on short-term liquid assets, and (4) objectives of the asset and liability management program.

The Bank’s Asset/Liability Committee (“ALCO”) is responsible for monitoring liquidity guidelines, policies and procedures. ALCO uses a variety of methods to monitor the liquidity position of the Bank including a liquidity analysis that measures potential sources and uses of funds over future time periods. ALCO also performs contingency funding analyses to determine the Bank’s ability to meet potential liquidity needs under stress scenarios that cover varying time horizons ranging from immediate to long-term.

Capital Resources

The Bank, as a national chartered bank, is subject to the dividend restrictions set forth by the OCC. The OCC must approve declaration of any dividends in excess of the sum of profits for the current year and retained net profits for the preceding two years (as defined). Farmers and Farmers Bank are required to maintain minimum amounts of capital to total “risk weighted” assets, as defined by the banking regulators. At December 31, 2025, under the minimum capital requirements associated with the Basel III, Farmers Bank and Farmers are required to have actual and minimum capital ratios, which are detailed in Note 16 of the Consolidated Financial Statements. Farmers Bank and Farmers had capital ratios above the minimum levels at December 31, 2025 and 2024. At year-end 2025 and 2024, the most recent regulatory notifications categorized Farmers Bank as well capitalized under the regulatory framework for prompt corrective action.

44

Table of Contents

During 2013, the Federal banking regulators approved a final rule to implement revised capital adequacy standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the Dodd-Frank Act. The final rule strengthens the definition of regulatory capital, increases risk-based capital requirements, makes selected changes to the calculation of risk-weighted assets, and adjusts the prompt corrective action thresholds. The Bank has retained, through a one-time election, the prior treatment for most accumulated other comprehensive income, such that unrealized gains and losses on securities available for sale that did not affect regulatory capital amounts and ratios. As mentioned in the prior paragraph, the Bank falls within the new regulatory capital ratio guidelines.

Critical Accounting Policies

The Company follows financial accounting and reporting policies that are in accordance with generally accepted accounting principles in the United States of America and conform to general practices within the banking industry. Some of these accounting policies are considered to be critical accounting policies. Critical accounting policies are those policies that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company has identified three accounting policies that are critical accounting policies and an understanding of these policies is necessary to understand the financial statements. These policies relate to determining the adequacy of the allowance for credit losses, if there is any impairment of goodwill and other intangibles, and estimating the fair value of assets acquired and liabilities assumed in connection with any merger activity. Additional information regarding these policies is included in the notes to the consolidated financial statements, including Note 1 (Summary of Significant Accounting Policies), Note 4 (Loans) and Note 2 (Business Combinations), and the section above captioned “Loan Portfolio.” Management believes that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.

Farmers maintains an allowance for credit losses. The allowance for credit losses is presented as a reserve against loans on the balance sheet. Credit losses are charged off against the allowance for credit losses, while recoveries of amounts previously charged off are credited to the allowance for credit losses. A provision for credit losses is charged to operations based on management’s periodic evaluation of adequacy of the allowance.

The Company’s allowance for credit losses represents management’s estimate of expected credit losses over the remaining expected life of the Company’s financial assets measured at amortized cost and certain off-balance sheet lending-related commitments.

The allowance for credit losses involves significant judgment on a number of matters including the weighting of macroeconomic forecasts and microeconomic statistics, incorporation of historical loss experience, assessment of risk characteristics, assignment of risk ratings, valuation of collateral, and the determination of remaining expected life. Refer to Note 4 for further information on these judgments as well as the Company’s policies and methodologies used to determine the Company’s allowance for credit losses.

A significant judgment involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the four-quarter forecast period within the Company’s methodology. The four-quarter forecast incorporates three macroeconomic variables (“MEVs”) that are relevant for exposures across the Company.

•

U.S. changes in real gross domestic product (GDP).

•

U.S. personal consumption expenditures (PCE) inflation.

•

U.S. civilian unemployment rate.

45

Table of Contents

Changes in the Company’s assumptions and forecasts of economic conditions could significantly affect its estimate of expected credit losses in the portfolio at the balance sheet date or lead to significant changes in the estimate from one reporting period to the next.

It is difficult to estimate how potential changes in any one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in others.

To consider the impact of a hypothetical alternate macroeconomic forecast, the Company compared the modeled credit losses determined using its central and relative adverse macroeconomic scenarios. The central and relative adverse scenarios each included the three MEVs, but differed in the levels, paths and peaks/troughs of those variables over the four-quarter forecast period.

For example, compared to the Company’s central scenario that is based on a four-quarter forecasted change in U.S. real GDP of 2.30% from 4Q2025 to 4Q2026, U.S. PCE inflation of 2.40%, and U.S. unemployment of 4.40%, the Company’s relative adverse scenario assumes a four-quarter forecast with a contraction of U.S. real GDP, a PCE inflation between 5.00% and 7.00% and an elevated U.S. unemployment rate between 6.00% and 7.00%. This analysis is not intended to estimate expected future changes in the allowance for credit losses, for a number of reasons, including:

•

The impacts of changes in the MEVs are both interrelated and nonlinear, so the results of this analysis cannot be simply extrapolated for more severe changes in macroeconomic variables.

•

Expectations of future changes in portfolio composition and borrower behavior can significantly affect the allowance for credit losses.

To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of December 31, 2025, the Company compared the modeled estimates under its relative adverse scenario for two of the Company’s largest loan pools to its central scenario for the same loan pools. Without considering offsetting or correlated effects in other qualitative components of the Company’s allowance for credit losses, the comparison between these two scenarios for the exposures below reflect the following differences:

•

An increase of approximately $658,000 for residential real estate loans and lending-related commitments

•

An increase of approximately $924,000 for commercial real non-owner occupied loans and lending-related commitments

This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as it does not reflect any potential changes in the other adjustments to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions.

Recognizing that forecasts of macroeconomic conditions are inherently uncertain, the Company believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended December 31, 2025.

The Company uses two methodologies to analyze loan pools. The cohort method and the PD/LGD method. Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but are not limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios.

46

Table of Contents

The PD portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual, or is partially or wholly charged-off. Typically, a one-year time period is used to assess PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. LGD is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios.

Management believes that the accounting for goodwill and other intangible assets also involves a higher degree of judgment than most other significant accounting policies. GAAP establishes standards for the amortization of acquired intangible assets and the impairment assessment of goodwill. Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. The Company’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of the Company’s subsidiaries to provide quality, cost-effective services in a competitive marketplace. The goodwill value is supported by revenue that is in part driven by the volume of business transacted. A decrease in earnings resulting from a decline in the customer base or the inability to deliver cost-effective services over sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods. GAAP requires an annual evaluation of goodwill for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The fair value of the goodwill is estimated by reviewing the past and projected operating results for the subsidiaries and comparable industry information. At December 31, 2025, on a consolidated basis, Farmers had intangibles of $17.9 million subject to amortization and $167.5 million in goodwill, which was not subject to periodic amortization.

The Company accounts for acquisitions under FASB ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. Assets acquired and liabilities assumed in a business combination are recorded at the estimated fair value on their purchase date. As provided for under GAAP, management has up to 12 months following the date of the acquisition to finalize the fair values of acquired assets and assumed liabilities. In particular, the valuation of acquired loans involves significant estimates, assumptions and judgment based on information available as of the acquisition date. Loans acquired in a business combination transaction are evaluated either individually or in pools of loans with similar characteristics; including consideration of a credit component. A number of factors are considered in determining the estimated fair value of purchased loans including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods, contractual interest rates compared to market interest rates, and net present value of cash flows expected to be received.

Recent Accounting Pronouncements and Developments

Note 1 to the Consolidated Financial Statements discusses new accounting policies adopted by Farmers during 2025 and 2024 and the expected impact of accounting policies recently issued or proposed but not yet required to be adopted. To the extent the adoption of new accounting standards materially affects financial condition, results of operations or liquidity, the impacts are discussed in the applicable sections of this financial review and notes to the consolidated financial statements.

47

Table of Contents