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What changed in FARMERS NATIONAL BANC CORP /OH/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FARMERS NATIONAL BANC CORP /OH/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+216 added−244 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-06)

Top changes in FARMERS NATIONAL BANC CORP /OH/'s 2025 10-K

216 paragraphs added · 244 removed · 174 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+5 added−20 removed128 unchanged
Biggest changePursuant to the terms of the Merger Agreement, at the Effective Time of the Merger, each common share, without par value, of Emclaire (“Emclaire Common Shares”) issued and outstanding immediately prior to the Effective Time (except for certain Emclaire Common Shares held directly by Emclaire or the Company) was converted into the right to receive, without interest, $40.00 in cash (the “Cash Consideration”) or 2.15 common shares, without par value, of the Company (“Company Common Shares”) (the “Stock Consideration”), subject to an overall limitation of 70% of the Emclaire Common Shares being exchanged for the Stock Consideration and the remaining 30% of Emclaire Common Shares being exchanged for the Cash Consideration.
Biggest changePursuant to the terms of the Merger Agreement, at the Effective Time of the Merger, each common share, without par value, of Middlefield (“Middlefield Common Shares”) issued and outstanding immediately prior to the Effective Time was converted into the right to receive 2.6 common shares, without par value, of the Company (“Company Common Shares”).
Farmers makes available free of charge on or through its website the Company’s annual reports on 2 Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such documents filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after the Company has filed these documents with the Commission.
Farmers makes available free of charge on or through its website the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such documents filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after the Company has filed these documents with the Commission.
The rules have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of the Company’s internal controls, they have made certain disclosures about the Company’s internal controls to its auditors and the audit committee of the Board of Directors and they have included information in the Company’s Quarterly and Annual Reports about their evaluation and whether there have been significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the evaluation. 10 Executive and Incentive Compensation In June 2010, the Federal Reserve Board, OCC and FDIC issued joint interagency guidance on incentive compensation policies (the “Joint Guidance”) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
The rules have several requirements, including having these officers certify that: they are responsible for establishing, maintaining and regularly evaluating the effectiveness of the Company’s internal controls, they have made certain disclosures about the Company’s internal controls to its auditors and the audit committee of the Board of Directors and they have included information in the Company’s Quarterly and Annual Reports about their evaluation and whether there have been significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the evaluation. 10 Table of Contents Executive and Incentive Compensation In June 2010, the Federal Reserve Board, OCC and FDIC issued joint interagency guidance on incentive compensation policies (the “Joint Guidance”) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
He also holds certifications in Six Sigma and ITIL and a master’s degree in technical communications. Mr. Oberhaus is currently the Executive Vice President and Chief Risk Officer of Farmers Bank. Mr. Oberhaus joined Farmers National Bank as part of the merger with First National Bank of Orrville in June of 2015 as the company’s Enterprise Risk Manager.
He also holds certifications in Six Sigma and ITIL and a master’s degree in technical communications. Mr. Oberhaus is the Executive Vice President and Chief Risk Officer of Farmers Bank. Mr. Oberhaus joined Farmers National Bank as part of the merger with First National Bank of Orrville in June of 2015 as the company’s Enterprise Risk Manager.
For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable. 8 Federal law permits the OCC to order the pro rata assessment of shareholders of a national bank whose capital stock has become impaired, by losses or otherwise, to relieve a deficiency in such national bank’s capital stock.
For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable. 8 Table of Contents Federal law permits the OCC to order the pro rata assessment of shareholders of a national bank whose capital stock has become impaired, by losses or otherwise, to relieve a deficiency in such national bank’s capital stock.
The Bank’s deposits are insured up to applicable limits by the DIF of the FDIC and subject to deposit insurance assessments to maintain the DIF. 4 The FDIC may terminate insurance coverage upon a finding that an insured depository institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the institution’s regulatory agency.
The Bank’s deposits are insured up to applicable limits by the DIF of the FDIC and subject to deposit insurance assessments to maintain the DIF. 4 Table of Contents The FDIC may terminate insurance coverage upon a finding that an insured depository institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition, or has violated any applicable law, regulation, rule, order or condition enacted or imposed by the institution’s regulatory agency.
In view of the changing conditions in the economy, the money markets and activities of monetary and fiscal authorities, Farmers can make no predictions as to future changes in interest rates, credit availability or deposit levels. 9 Community Reinvestment Act The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.
In view of the changing conditions in the economy, the money markets and activities of monetary and fiscal authorities, Farmers can make no predictions as to future changes in interest rates, credit availability or deposit levels. 9 Table of Contents Community Reinvestment Act The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.
This rule also requires bank service providers to notify their bank organization customers of a computer-security incident that has occurred, or is reasonably likely to cause, a material service disruption or degradation for four or more hours. 11 The Cyber Incident Reporting for Critical Infrastructure Act, enacted in March 2022, requires certain covered entities to report a covered incident to the U.S.
This rule also requires bank service providers to notify their bank organization customers of a computer-security incident that has occurred, or is reasonably likely to cause, a material service disruption or degradation for four or more hours. 11 Table of Contents The Cyber Incident Reporting for Critical Infrastructure Act, enacted in March 2022, requires certain covered entities to report a covered incident to the U.S.
A discussion of the general development of the Bank’s business and information regarding its financial performance throughout 2024, is discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report on Form 10-K. The Bank faces significant competition in offering financial services to customers.
A discussion of the general development of the Bank’s business and information regarding its financial performance throughout 2025 , is discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report on Form 10-K. The Bank faces significant competition in offering financial services to customers.
Jackson is the Executive Vice President and Chief Information Officer of Farmers Bank, a position he has held since May 2009. Prior to coming to the Company, Mr. Jackson was Assistant Vice President and Information Technology Manager with Home Savings Bank since 1993. He has over 31 years of experience in the IT field. Mr.
Jackson is the Executive Vice President and Chief Information Officer of Farmers Bank, a position he has held since May 2009. Prior to coming to the Company, Mr. Jackson was Assistant Vice President and Information Technology Manager with Home Savings Bank since 1993. He has over 32 years of experience in the IT field. Mr.
Nicastro served as Staffing and Compliance Manager for Huntington National Bank (2007-2008) and Regional Human Resources Manager for Sky Bank from 2004 until 2007. Mr. Nicastro has an MBA, and has more than 26 years of experience in Human Resource Management from both large multi-national banks and regional community banks.
Nicastro served as Staffing and Compliance Manager for Huntington National Bank (2007-2008) and Regional Human Resources Manager for Sky Bank from 2004 until 2007. Mr. Nicastro has an MBA, and has more than 27 years of experience in Human Resource Management from both large multi-national banks and regional community banks.
Matuszak served as the Vice President, Cloud Services with Wellmark Blue Cross Blue Shield for 6 years, becoming Vice President, Cloud Services and CISO in 2019. Mr. Matuszak has more than 26 years of experience in operations, facilities, cybersecurity and software development throughout the financial services, insurance and healthcare industries.
Matuszak served as the Vice President, Cloud Services with Wellmark Blue Cross Blue Shield for 6 years, becoming Vice President, Cloud Services and CISO in 2019. Mr. Matuszak has more than 27 years of experience in operations, facilities, cybersecurity and software development throughout the financial services, insurance and healthcare industries.
Any such change in applicable legislation, statutes, regulations or regulatory policies could have a material adverse effect on the Company and its business, financial condition or results of operations. 3 Regulatory Agencies Financial Holding Company . Farmers elected to be a financial holding company.
Any such change in applicable legislation, statutes, regulations or regulatory policies could have a material adverse effect on the Company and its business, financial condition or results of operations. 3 Table of Contents Regulatory Agencies Financial Holding Company . Farmers elected to be a financial holding company.
He was appointed as an executive officer in 2012. 13 Mr. Matuszak is the Senior Executive Vice President and Chief Operating Officer of Farmers Bank, a position he has held since December of 2022. Most recently, Mr.
He was appointed as an executive officer in 2012. 13 Table of Contents Mr. Matuszak is the Senior Executive Vice President and Chief Operating Officer of Farmers Bank, a position he has held since December of 2022. Most recently, Mr.
As a result, it is subject to regulation and deposit insurance assessments by the FDIC. 5 Dividends and Transactions with Affiliates The Company is a legal entity separate and distinct from the Bank and its other subsidiaries.
As a result, it is subject to regulation and deposit insurance assessments by the FDIC. 5 Table of Contents Dividends and Transactions with Affiliates The Company is a legal entity separate and distinct from the Bank and its other subsidiaries.
Item 1. B usiness. General Farmers National Banc Corp. Farmers National Banc Corp. (the “Company,” “Farmers,” “we,” “our” or “us”), is a financial holding company and was organized as a one-bank holding company in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”).
Item 1. Business. General Farmers National Banc Corp. Farmers National Banc Corp. (the “Company,” “Farmers,” “we,” “our” or “us”), is a financial holding company that was organized as a one-bank holding company in 1983 under the laws of the State of Ohio and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”).
Any such change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on the business of the Company. 12 Information About Our Executive Officers The names, ages and positions of Farmers’ executive officers as of March 1, 2025: Name Age Title Troy Adair 58 Executive Vice President, Secretary, Treasurer and Chief Financial Officer of Farmers and Senior Executive Vice President and Chief Financial Officer of Farmers Bank Kevin J.
Any such change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on the business of the Company. 12 Table of Contents Information About Our Executive Officers The names, ages and positions of Farmers’ executive officers as of March 1, 2026: Name Age Title Troy Adair 59 Executive Vice President, Secretary, Treasurer and Chief Financial Officer of Farmers and Senior Executive Vice President and Chief Financial Officer of Farmers Bank Kevin J.
The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.
The Dodd-Frank Act requires the FDIC to offset the effect on institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35%.
We are committed to attracting, developing, and retaining associates who reflect the communities in which we serve. As of December 31, 2024, Farmers and its subsidiaries had 682 full-time equivalent employees.
We are committed to attracting, developing, and retaining associates who reflect the communities in which we serve. As of December 31, 2025 , Farmers and its subsidiaries had 706 full-time equivalent employees.
Jones Agency, Inc., doing business as Champion Insurance. Farmers Insurance is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank. Farmers of Canfield Investment Company Farmers Investments was formed during 2014, with the primary purpose of investing in municipal securities.
Farmers Insurance is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank. Farmers of Canfield Investment Company Farmers Investments was formed during 2014, with the primary purpose of investing in municipal securities.
To the extent that the following discussion describes legislation, statutes, regulations or policies applicable to the Company or its subsidiaries, the discussion is qualified in its entirety by reference to the full text of the legislation, statutes, regulations and policies that are described herein, as they may be amended or revised by the United States ("U.S").
To the extent that the following discussion describes legislation, statutes, regulations or policies applicable to the Company or its subsidiaries, the discussion is qualified in its entirety by reference to the full text of the legislation, statutes, regulations and policies that are described herein, as they may be amended or revised by the United States ("U.S."), Congress or state legislatures and federal or state regulatory agencies, as the case may be.
Helmick served as the Vice President and Program Manager for Farmers Investments. In 2008, Mr. Helmick was promoted to Senior Vice President of Wealth Management and Retail Services where he was responsible for the management and oversight of the retail investment area of Farmers Bank, Farmers Insurance, and all branch sales and operational functions. Mr.
Helmick was promoted to Senior Vice President of Wealth Management and Retail Services where he was responsible for the management and oversight of the retail investment area of Farmers Bank, Farmers Insurance, and all branch sales and operational functions. Mr.
Wallace Soukenik joined Farmers Bank as Senior Vice President and Director of Marketing. She has 34 years of experience in the marketing field. Prior to joining the Company, Ms. Wallace Soukenik served as the Assistant Vice President of Marketing and Physician Relations at Trumbull Memorial Hospital. She was appointed as an executive officer in 2012. Mr.
She has 35 years of experience in the marketing field. Prior to joining the Company, Ms. Wallace Soukenik served as the Assistant Vice President of Marketing and Physician Relations at Trumbull Memorial Hospital. She was appointed as an executive officer in 2012. Mr. Wenick is Senior Executive Vice President and Chief Wealth Management Officer of Farmers Bank.
Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Emclaire merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger.
Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Middlefield merged with and into the Company, with the Company as the surviving entity in the Merger.
Congress or state legislatures and federal or state regulatory agencies, as the case may be. Changes in these legislation, statutes, regulations and policies may have a material adverse effect on the Company and its business, financial condition or results of operations. Such legislation, statutes, regulations and policies are continually under review by the U.S.
Changes in these legislation, statutes, regulations and policies may have a material adverse effect on the Company and its business, financial condition or results of operations. Such legislation, statutes, regulations and policies are continually under review by the U.S.
Helmick 53 President and Chief Executive Officer of Farmers and Farmers Bank Brian E. Jackson 55 Executive Vice President and Chief Information Officer of Farmers Bank Michael E. Matuszak 57 Senior Executive Vice President and Chief Operating Officer of Farmers Bank Mark A.
Helmick 54 President and Chief Executive Officer of Farmers and Farmers Bank Brian E. Jackson 56 Executive Vice President and Chief Information Officer of Farmers Bank Michael E. Matuszak 58 Senior Executive Vice President and Chief Operating Officer of Farmers Bank Mark A.
As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, federally-insured institutions. It also may prohibit any federally-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the DIF. The FDIC also has the authority to take enforcement actions against insured institutions.
It also may prohibit any federally-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the DIF. The FDIC also has the authority to take enforcement actions against insured institutions.
Prior to the merger Mr. Oberhaus served as the SVP and Chief Risk Officer of First National Bank of Orrville and brings more than 26 years of experience in banking. Mr. Sabat is the Senior Vice President and Chief Accounting Officer of Farmers Bank. Mr.
Prior to the merger Mr. Oberhaus served as the SVP and Chief Risk Off icer of First National Bank of Orrville and brings more than 27 years of experience in banking. Ms. Commons is the Senior Vice President and Chief Accounting Officer of Farmers Bank. Ms. Commons joined Farmers National Bank in March 2025.
Promptly following the consummation of the Merger, Merger Sub was dissolved and liquidated and The Farmers National Bank of Emlenton, the banking subsidiary of Emclaire, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company (“Farmers Bank”), with Farmers Bank as the surviving bank.
Promptly following the consummation of the Merger, the Middlefield Banking Company, the banking subsidiary of Middlefield, merged with and into The Farmers National Bank of Canfield, the national banking subsidiary of the Company (“Farmers Bank”), with Farmers Bank as the surviving bank.
Volcker Rule In December 2013, five federal agencies adopted a final regulation implementing the Volcker Rule provision of the Dodd-Frank Act (the “Volcker Rule”). The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions.
Volcker Rule The Volcker Rule provision of the Dodd-Frank Act (the “Volcker Rule”) places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions.
For a discussion of Farmers’ financial performance for the fiscal year ended December 31, 2024, see the Consolidated Financial Statements and Notes to the Consolidated Financial Statements found in Item 8 of this Annual Report on Form 10-K. The Farmers National Bank of Canfield On January 1, 2023, Farmers National Banc Corp.
For a discussion of Farmers’ financial performance for the fiscal year ended December 31, 2025 , see the Consolidated Financial Statements and Notes to the Consolidated Financial Statements found in Item 8 of this Annual Report on Form 10-K.
Wenick is Senior Executive Vice President and Chief Wealth Management Officer of Farmers Bank. Prior to coming to Farmers National Bank in 2017, Mr. Wenick was regional president of Chemical Bank for 3 years. Prior to that, Mr. Wenick spent 5 years in local bank investment and trust positions.
Prior to coming to Farmers National Bank in 2017, Mr. Wenick was regional president of Chemical Bank for 3 years. Prior to that, Mr. Wenick spent 5 years in local bank investment and trust positions. He brings more than 42 years of financial expertise in the area of wealth management.
Under the final rule, community banks with $10 billion or less in total consolidated assets and total trading assets and liabilities of 5.0% or less of total consolidated assets were excluded from the restrictions of the Volcker Rule.
Community banks with $10 billion or less in total consolidated assets and total trading assets and liabilities of 5.0% or less of total consolidated assets are excluded from the restrictions of the Volcker Rule, including the prohibition on banking entities investing in or sponsoring covered funds.
Shaffer has over 35 years of banking and lending experience in the Mahoning Valley market. Mr. Shaffer was appointed as an executive officer in 2014. Ms. Wallace Soukenik has served as Senior Executive Vice President and Chief Retail/Marketing Officer for Farmers Bank since November 2013. In August 2008, Ms.
Lipke served as the SVP and Chief Credit Officer of Cortland Bank and has over 30 years of banking experience. Ms. Wallace Soukenik has served as Senior Executive Vice President and Chief Retail/Marketing Officer for Farmers Bank since November 2013. In August 2008, Ms. Wallace Soukenik joined Farmers Bank as Senior Vice President and Director of Marketing.
During 2024, Farmers Trust acquired substantially all of the assets, in a cash transaction, of Crest Retirement Advisors, LLC ("Crest"). Farmers Trust operates five offices located in Boardman, Canton, Howland, Wooster and Fairview Park, Ohio. Farmers National Captive, Inc. Captive was formed during 2016 and operated until November 20, 2023 when the Company dissolved the entity.
During 2024, Farmers Trust acquired substantially all of the assets, in a cash transaction, of Crest Retirement Advisors, LLC ("Crest"). Farmers Trust operates five offices located in Boardman, Canton, Howland, Wooster and Fairview Park, Ohio. Farmers National Insurance, LLC Farmers Insurance was formed during 2009 and offers a variety of insurance products through licensed representatives.
Economic Growth, Regulatory Relief and Consumer Protection Act On May 25, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”) was enacted, which repealed or modified certain provisions of the Dodd-Frank Act and eased restrictions on all but the largest banks (those with consolidated assets in excess of $250 billion).
Requirements of higher capital levels or higher levels of liquid assets could adversely impact the Company’s net income and return on equity. 7 Table of Contents Economic Growth, Regulatory Relief and Consumer Protection Act The Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”) repealed or modified certain provisions of the Dodd-Frank Act and eased restrictions on all but the largest banks (those with consolidated assets in excess of $250 billion).
Adair joined Farmers in June of 2021 as Executive Vice President of Finance. Prior to that time, Mr. Adair was the treasurer of Home Savings Bank/Premier Bank from February 2016 through June of 2021 and Director of Risk Management from February of 2002 to February of 2016. Mr.
Adair was the treasurer of Home Savings Bank/Premier Bank from February 2016 through June of 2021 and Director of Risk Management from February of 2002 to February of 2016. Mr. Adair has 38 years of experience in finance and accounting in the banking industry. Mr.
The term of office for all the above executive officers is for the period ending with the next annual meeting. Principal Occupation and Business Experience of Executive Officers Mr. Adair has served as Executive Vice President, Secretary, Treasurer and Chief Financial Officer of Farmers and Senior Executive Vice President and Chief Financial Officer of Farmers Bank since August 2021. Mr.
Wenick 66 Senior Executive Vice President and Chief Wealth Management Officer of Farmers Bank Officers are generally elected annually by the Board of Directors. The term of office for all the above executive officers is for the period ending with the next annual meeting. Principal Occupation and Business Experience of Executive Officers Mr.
Helmick was Secretary of Farmers and Executive Vice President – Wealth Management and Retail Services of Farmers Bank since January 2012. Mr. Helmick has been with the Company for 30 years and has a retail and investment background, including an MBA and CFP designation. From 1997 through 2008, Mr.
Helmick has been with the Company for 31 years and has a retail and investment background, including an MBA and CFP designation. From 1997 through 2008, Mr. Helmick served as the Vice President and Program Manager for Farmers Investments. In 2008, Mr.
The DRR reached 1.40% on June 30, 2019, but as of June 30, 2020, the DRR fell below the statutory minimum to 1.30%. This resulted in the FDIC adopting a restoration plan that requires the restoration of the DRR to 1.35% by September 30, 2028. The restoration plan maintained the scheduled assessment rates for all insured institutions.
Because the DRR fell below the statutory minimum to 1.30% the FDIC adopted a restoration plan that requires the restoration of the DRR to 1.35% by September 30, 2028. The restoration plan maintained the scheduled assessment rates for all insured institutions. As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, federally-insured institutions.
The Dodd-Frank Act also provides shareholders the opportunity to cast a non-binding vote on executive compensation practices, imposes new executive compensation disclosure requirements, and contains additional considerations of the independence of compensation advisors. A new compliant clawback policy was approved by the Board of Directors on September 26, 2023.
The Dodd-Frank Act also provides shareholders the opportunity to cast a non-binding vote on executive compensation practices, imposes new executive compensation disclosure requirements, and contains additional considerations of the independence of compensation advisors. Cybersecurity Federal banking regulators issued two related statements regarding cybersecurity in 2015.
Adair has 37 years of experience in finance and accounting in the banking industry. Mr. Helmick is the President and Chief Executive Officer of Farmers and Farmers Bank, a position he has held since November 2013. Prior to becoming President, Mr.
Helmick is the President and Chief Executive Officer of Farmers and Farmers Bank, a position he has held since November 2013. Prior to becoming President, Mr. Helmick was Secretary of Farmers and Executive Vice President – Wealth Management and Retail Services of Farmers Bank since January 2012. Mr.
Under Basel III, common equity tier 1 capital consists of common stock and paid-in capital (net of treasury stock) and retained earnings.
The Federal Reserve Bank monitors the capital adequacy of Farmers and the FDIC monitors the capital adequacy of Farmers Bank. 6 Table of Contents Under the capital adequacy standards of the Basel Committee on Banking Supervision ("Basel III"), common equity tier 1 capital consists of common stock and paid-in capital (net of treasury stock) and retained earnings.
The Bank does not engage in any of the trading activities or own any of the types of funds prohibited by the Volcker Rule. Prompt Corrective Action The federal banking agencies have established a system of prompt corrective action to resolve certain problems of undercapitalized institutions.
Prompt Corrective Action The federal banking agencies have established a system of prompt corrective action to resolve certain problems of undercapitalized institutions.
Investor Relations The Company maintains an Internet site at http://www.farmersbankgroup.com , which contains an Investor Relations section that provides access to the Company’s filings with the Securities and Exchange Commission (the “Commission”).
Farmers Investments is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank. 2 Table of Contents Investor Relations The Company maintains an Internet site at http://www.farmersbankgroup.com , which contains an Investor Relations section that provides access to the Company’s filings with the Securities and Exchange Commission (the “Commission”).
On June 25, 2020, the federal bank regulatory agencies also finalized a rule modifying the Volcker Rule’s prohibition on banking entities investing in or sponsoring covered funds. Such rule permits certain banking entities to offer financial services and engage in other activities that do not raise concerns that the Volcker Rule was originally intended to address.
As a result, certain banking entities are permitted to offer financial services and engage in other activities that do not raise concerns that the Volcker Rule was originally intended to address. The Bank does not engage in any of the trading activities or own any of the types of funds prohibited by the Volcker Rule.
Emclaire operated 19 branches in ten counties throughout western Pennsylvania. 1 The Bank is a full-service national banking association engaged in commercial and retail banking mainly in the northeastern region of Ohio and the western region of Pennsylvania.
No fractional Company Common Shares were issued in the Merger, and Middlefield's shareholders became entitled to receive cash in lieu of fractional Company Common Shares. 1 Table of Contents The Bank is a full-service national banking association engaged in commercial and retail banking mainly in the northeastern region of Ohio and the western region of Pennsylvania.
Nicastro 54 Executive Vice President and Chief Human Resources Officer of Farmers Bank Michael Oberhaus 48 Executive Vice President and Chief Risk Officer of Farmers Bank Joseph W. Sabat 64 Senior Vice President and Chief Accounting Officer of Farmers Bank Timothy F.
Nicastro 55 Executive Vice President and Chief Human Resources Officer of Farmers Bank Michael Oberhaus 49 Executive Vice President and Chief Risk Officer of Farmers Bank Sherry Commons 54 Senior Vice President and Chief Accounting Officer of Farmers Bank Michael Lipke 58 Senior Vice President and Chief Credit Officer of Farmers Bank Amber Wallace Soukenik 60 Senior Executive Vice President and Chief Retail/Marketing Officer of Farmers Bank Mark J.
(the “Company”) completed its previously announced merger with Emclaire Financial Corp., a Pennsylvania corporation and registered financial holding company (“Emclaire”), pursuant to the Agreement and Plan of Merger dated as of March 23, 2022, by and among the Company, FMNB Merger Subsidiary V, LLC, a wholly owned subsidiary of Farmers (“Merger Sub”), and Emclaire (the “Merger Agreement”).
On March 2, 2026, the Company completed its previously announced merger (the "Merger") with Middlefield Banc Corp., an Ohio corporation (“Middlefield”), pursuant to the Agreement and Plan of Merger dated as of October 22, 2025, by and between the Company and Middlefield (the “Merger Agreement”).
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No fractional Company Common Shares were issued in the Merger, and Emclaire’s shareholders became entitled to receive cash in lieu of fractional Company Common Shares.
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The Farmers National Bank of Canfield On October 22, 2025, the Company announced the signing of a definitive merger agreement (the "Agreement") with Middlefield Banc Corp. ("Middlefield"), the holding company for The Middlefield Banking Company ("Middlefield Bank") pursuant to which Middlefield will merge with and into Farmers in an all-stock transaction.
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During its operation Captive was a wholly-owned insurance subsidiary of the Company that provided property and casualty insurance coverage to the Company and its subsidiaries. The Captive pooled resources with similar insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves and to provide insurance where not available or economically feasible.
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Pursuant to the Agreement, each share of Middlefield common stock outstanding immediately prior to completion of the merger will be converted into 2.6 shares of Farmers common stock. The merger is expected to close in the first quarter of 2026.
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Captive did not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Company. Farmers National Insurance, LLC Farmers Insurance was formed during 2009 and offers a variety of insurance products through licensed representatives. During 2022, Farmers Insurance acquired substantially all of the assets, in a cash transaction, of Randy L.
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Adair has served as Executive Vice President, Secretary, Treasurer and Chief Financial Officer of Farmers and Senior Executive Vice President and Chief Financial Officer of Farmers Bank since August 2021. Mr. Adair joined Farmers in June of 2021 as Executive Vice President of Finance. Prior to that time, Mr.
Removed
Farmers Investments is a subsidiary of Farmers Bank and does not account for a material portion of revenue and, therefore, will not be discussed individually, but as part of the Bank.
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Prior to coming to the Company, Ms. Commons was Senior Vice President and Controller of Premier Bank where she worked since 1997. Ms. Commons has over 23 years of experience in finance and accounting in the banking industry. Mr.
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The Federal Reserve Bank monitors the capital adequacy of Farmers and the FDIC monitors the capital adequacy of Farmers Bank. 6 In July 2013, the Federal banking regulators approved a final rule to implement the revised capital adequacy standards of the Basel Committee on Banking Supervision (“Basel III”), and to address relevant provisions of the Dodd-Frank Act.
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Lipke is the Senior Vice President and Chief Credit Officer of Farmers Bank and has held that title since April of 2025. Mr. Lipke joined Farmer National Bank as part of the merger with Cortland Bank in November of 2021 as the Director of Commercial Credit Administration. Prior to the merger Mr.
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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 Company and the Bank became subject to Basel III on January 1, 2015.
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Basel III also changed the risk-weights of assets in an effort to better reflect credit risk and other risk exposures.
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Requirements of higher capital levels or higher levels of liquid assets could adversely impact the Company’s net income and return on equity. In December 2018, the federal banking agencies issued a final rule to address regulatory treatment of credit loss allowances under the Current Expected Credit Losses (“CECL”).
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The rule revised the federal banking agencies’ regulatory capital rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model.
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Due to COVID-19, federal banking agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL.
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The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.
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On August 26, 2020, the federal 7 banking agencies issued a final rule that made certain technical changes to the interim final rule, including expanding the pool of eligible institutions. The changes in the final rule applied only to those banking organizations that elected the CECL transition relief provided for under the rule.
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The Company did not elect this transition relief.
Removed
In July 2019, the federal bank regulatory agencies that adopted the Volcker Rule adopted a final rule to exempt certain community banks, including Farmers, from such rule consistent with the Regulatory Relief Act.
Removed
See Exhibit 97.1 for the policy relating to recovery of erroneously awarded compensation. Cybersecurity Federal banking regulators issued two related statements regarding cybersecurity in 2015.
Removed
Shaffer 63 Senior Executive Vice President and Chief Banking Officer of Farmers Bank Amber Wallace Soukenik 59 Senior Executive Vice President and Chief Retail/Marketing Officer of Farmers Bank Mark J. Wenick 65 Senior Executive Vice President and Chief Wealth Management Officer of Farmers Bank Officers are generally elected annually by the Board of Directors.
Removed
Sabat was appointed to that position in June 2021 and previously served as Controller of Farmers Bank since April 2006. Prior to coming to the Company, Mr. Sabat was with a regional public accounting firm. Mr. Sabat has 29 years of experience in the accounting, finance and auditing fields.
Removed
He is a certified public accountant and was appointed as an executive officer in 2012. Mr. Shaffer serves as Senior Executive Vice President and Chief Banking Officer and has held that title since January of 2025. Previously, Mr. Shaffer served as Chief Credit Officer from 2021 through January 2025.
Removed
He was previously Regional President and held that title from July of 2015 through 2020. Mr. Shaffer also served as the Director of Commercial Banking & Private Client Services. In October of 2011, Mr. Shaffer joined Farmers Bank as the Commercial Lending Manager, overseeing commercial lending, small business lending and treasury management. Mr.
Removed
He brings more than 41 years of financial expertise in the area of wealth management.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+16 added−16 removed124 unchanged
Biggest changeOur exposure to credit risk is managed through the use of consistent underwriting standards that emphasize “in-market” lending, while avoiding highly leveraged transactions as well as excessive industry and other concentrations. Our credit administration function employs risk management techniques to ensure that loans adhere to corporate policy and problem loans are promptly identified.
Biggest changeWe take credit risk by virtue of making loans, extending loan commitments and letters of credit and, to a lesser degree, purchasing non-governmental securities. Our exposure to credit risk is managed through the use of consistent underwriting standards that emphasize “in-market” lending, while avoiding highly leveraged transactions as well as excessive industry and other concentrations.
Although Management believes that the Company’s allowance for credit losses is adequate to absorb losses on any existing loans that may become 15 uncollectible, we cannot estimate loan losses with certainty, and we cannot provide any assurances that our allowance for loan losses will prove sufficient to cover actual credit losses in the future.
Although Management believes that the Company’s allowance for credit losses is adequate to absorb losses on any existing loans that may become uncollectible, we cannot estimate loan losses with certainty, and we cannot provide any assurances that our allowance for loan losses will prove sufficient to cover actual credit losses in the future.
Nevertheless, we could face delays and challenges in the foreclosure process arising from claims relating to industry practices generally, which could adversely affect recoveries and our financial results, whether through increased expenses of litigation and property maintenance, deteriorating values of underlying mortgaged properties or unsuccessful litigation results generally. 23 In addition, in connection with the origination and sale of residential mortgages into the secondary market, we make certain representations and warranties, which, if breached, may require us to repurchase such loans, substitute other loans or indemnify the purchasers of such loans for actual losses incurred in respect of such loans.
Nevertheless, we could face delays and challenges in the foreclosure process arising from claims relating to industry practices generally, which could adversely affect recoveries and our financial results, whether through increased expenses of litigation and property maintenance, deteriorating values of underlying mortgaged properties or unsuccessful litigation results generally. 23 Table of Contents In addition, in connection with the origination and sale of residential mortgages into the secondary market, we make certain representations and warranties, which, if breached, may require us to repurchase such loans, substitute other loans or indemnify the purchasers of such loans for actual losses incurred in respect of such loans.
Because we have a significant amount 14 of real estate loans, additional decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.
Because we have a significant amount of real estate loans, additional decreases in real estate values could adversely affect the value of property used as collateral and our ability to sell the collateral upon foreclosure.
Similar to any large organization, we are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems. 20 Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions, social media and other marketing activities, the implementation of environmental, social, and governance practices, and from actions taken by government regulators and community organizations in response to any of the foregoing.
Similar to any large organization, we are exposed to many types of operational risk, including reputational risk, legal and compliance risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems. 18 Table of Contents Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions, social media and other marketing activities, the implementation of environmental, social, and governance practices, and from actions taken by government regulators and community organizations in response to any of the foregoing.
As of December 31, 2024, a majority of our loan portfolio consisted of commercial real estate and residential real estate loans, including real estate development, construction and residential and commercial mortgage loans. Consequently, real estate-related credit risks are a significant concern for us.
As of December 31, 2025 , a majority of our loan portfolio consisted of commercial real estate and residential real estate loans, including real estate development, construction and residential and commercial mortgage loans. Consequently, real estate-related credit risks are a significant concern for us.
Unauthorized disclosure of sensitive or confidential customer information, whether through a data breach of our computer systems, third-party service providers’ systems, by cyber-attack or otherwise, could severely harm our business. As part of our financial institution business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties.
Unauthorized disclosure of sensitive or confidential customer information, whether through a data breach of our computer systems, third-party service providers ’ systems, by cyber-attack or otherwise, could severely harm our business. As part of our financial institution business, we collect, process and retain sensitive and confidential client and customer information on behalf of our subsidiaries and other third parties.
Should management determine it is more likely than not that the deferred tax assets will be realized, a valuation allowance with a change to earnings would be reflected in the period. 24 Changes and uncertainty in tax laws could adversely affect our performance.
Should management determine it is more likely than not that the deferred tax assets will be realized, a valuation allowance with a change to earnings would be reflected in the period. 24 Table of Contents Changes and uncertainty in tax laws could adversely affect our performance.
Item 1A. Ris k Factors. The following are certain risk factors that could materially and negatively affect our business, results of operations, cash flows or financial condition.
Item 1A. Risk Factors. The following are certain risk factors that could materially and negatively affect our business, results of operations, cash flows or financial condition.
Any of these factors could adversely affect each company’s ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the acquisition or could reduce each company’s earnings or otherwise adversely affect our business and financial results after the acquisition. 19 We may fail to realize all of the anticipated benefits of acquisitions, which could reduce our anticipated profitability.
Any of these factors could adversely affect each company’s ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the acquisition or could reduce each company’s earnings or otherwise adversely affect our business and financial results after the acquisition. 17 Table of Contents We may fail to realize all of the anticipated benefits of acquisitions, which could reduce our anticipated profitability.
The financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors and the Deposit Insurance Fund, and not to benefit our shareholders.
The financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors and the DIF, and not to benefit our shareholders.
As cyber-attacks and other attempted information security threats continue to evolve, we may be required to spend significant additional resources in efforts to modify and enhance our protective measures or in investigating or remediating of security breaches or vulnerabilities. 21 We depend on our subsidiaries for dividends, distributions and other payments.
As cyber-attacks and other attempted information security threats continue to evolve, we may be required to spend significant additional resources in efforts to modify and enhance our protective measures or in investigating or remediating of security breaches or vulnerabilities. 19 Table of Contents We depend on our subsidiaries for dividends, distributions and other payments.
Liquidity is further provided by unencumbered, or unpledged, investment securities that totaled $414.0 million at December 31, 2024. An inability to raise funds through deposits, borrowings, the sale or pledging as collateral of loans and other assets could have a substantial negative effect on our liquidity.
Liquidity is further provided by unencumbered, or unpledged, investment securities that totaled $498.5 million at December 31, 2025 . An inability to raise funds through deposits, borrowings, the sale or pledging as collateral of loans and other assets could have a substantial negative effect on our liquidity.
Risks Relating to General Economic and Market Conditions Changes in economic, political, and market conditions may adversely affect our industry and our business. Our success depends in part on national and local economic, political, and market conditions as well as governmental monetary and other financial policies.
Changes in economic, political, and market conditions may adversely affect our industry and our business. Our success depends in part on national and local economic, political, and market conditions as well as governmental monetary and other financial policies.
Adverse changes in the ability or willingness of a significant portion of our customers to repay their obligations to the Company, whether due to changes in general economic, political or social conditions including the results of national, state or local elections, the cost of consumer goods, interest rates, natural disasters, acts of war or terrorism, prolonged public health crisis or a pandemic, such as COVID-19, or other causes, or events affecting our customers such as unemployment, major medical expenses, bankruptcy, divorce or death, could have a material effect on our liquidity, financial condition and results of operations.
Adverse changes in the ability or willingness of a significant portion of our customers to repay their obligations to the Company, whether due to changes in general economic, political or social conditions including the results of national, state or local elections, the cost of consumer goods, interest rates, natural disasters, acts of war or terrorism, prolonged public health crisis or a pandemic, or other causes, or events affecting our customers such as unemployment, major medical expenses, bankruptcy, divorce or death, could have a material effect on our liquidity, financial condition and results of operations. 21 Table of Contents We maintain an allowance for credit losses in our financial statements.
Core deposits – savings and money market accounts, time deposits less than $250 thousand and demand deposits—comprised approximately 91.6% of total deposits at December 31, 2024. Additional available unused wholesale sources of liquidity include advances from the FHLB, issuances through dealers in the capital markets and access to certificates of deposit issued through brokers.
Core deposits – savings and money market accounts, time deposits less than $250,000 and demand deposits—comprised approximately 93.0% of total deposits at December 31, 2025 . Additional available unused wholesale sources of liquidity include advances from the FHLB, issuances through dealers in the capital markets and access to certificates of deposit issued through brokers.
If general economic conditions worsen, we may experience higher levels of delinquencies, repossessions and charge-offs. 17 Commercial and industrial loans may expose us to greater financial and credit risk than other loans. As of December 31, 2024, approximately 10.8% of our loan portfolio consisted of commercial and industrial loans.
If general economic conditions worsen, we may experience higher levels of delinquencies, repossessions and charge-offs. 15 Table of Contents Commercial and industrial loans may expose us to greater financial and credit risk than other loans. As of December 31, 2025 , approximately 10.4% of our loan portfolio consisted of commercial and industrial loans.
If the methodologies and assumptions we use in the CECL model prove to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on our financial condition and results of operations.
If the methodologies and assumptions we use in the CECL model prove to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on our financial condition and results of operations. 16 Table of Contents We are subject to certain risks with respect to liquidity.
During 2023, several high profile bank failures caused uncertainty in the investor community and negative confidence among bank customers generally. 16 These failures and any additional failures that could occur may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a negative reputational ramification for the financial services industry, including us.
These failures and any additional failures that could occur may reduce customer confidence, affect sources of funding and liquidity, increase regulatory requirements and costs, adversely affect financial markets and/or have a negative reputational ramification for the financial services industry, including us.
In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all. Item 1B. Unresolve d Staff Comments. There are no matters of unresolved staff comments from the Commission staff.
In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all.
Those actions included increasing assessment rates for all insured institutions, requiring riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels, and imposing special assessments.
Those actions included increasing assessment rates for all insured institutions, requiring riskier institutions to pay a larger share of premiums by factoring in rate adjustments based on secured liabilities and unsecured debt levels, and imposing special assessments. 22 Table of Contents Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged.
We maintain an allowance for credit losses in our financial statements. Under CECL the credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments, based on estimates and assumptions at that date.
Under the Financial Accounting Standards Board ("FASB") Current Expected Credit Losses ("CECL") standard, the credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments, based on estimates and assumptions at that date.
Our financial condition, results of operation, and stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions.
Our financial condition, results of operation, and stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions. In recent years, several high profile bank failures caused uncertainty in the investor community and negative confidence among bank customers generally.
Failure to successfully keep pace with technological change affecting the financial services industry, and failure to successfully manage the risks associated with the implementation of these new technologies, could negatively affect our growth, revenue and net income. Risks Related to the Legal and Regulatory Environment Increases in FDIC insurance premiums may have a material adverse effect on our earnings.
Failure to successfully keep pace with technological change affecting the financial services industry, and failure to successfully manage the risks associated with the implementation of these new technologies, could negatively affect our growth, revenue and net income.
The FDIC maintains the Deposit Insurance Fund to resolve the cost of bank failures. Since late 2008, the FDIC has taken various actions intended to maintain a strong funding position and restore reserve ratios of the Deposit Insurance Fund.
Risks Related to the Legal and Regulatory Environment Increases in FDIC insurance premiums may have a material adverse effect on our earnings. The FDIC maintains the Deposit Insurance Fund to resolve the cost of bank failures. Since late 2008, the FDIC has taken various actions intended to maintain a strong funding position and restore reserve ratios of the DIF.
If any of the following risks occur, our business, financial condition or results of operations could be negatively affected. Additional risks that are not presently known or that we presently deem to be immaterial could also have a material, adverse impact on our business, financial condition or results of operations.
Additional risks that are not presently known or that we presently deem to be immaterial could also have a material, adverse impact on our business, financial condition or results of operations. 14 Table of Contents Risks Related to Our Business We extend credit to a variety of customers based on internally set standards and judgment.
Risks Related to Our Business We extend credit to a variety of customers based on internally set standards and judgment. We manage credit risk through a program of underwriting standards, the review of certain credit decisions and an on-going process of assessment of the quality of credit already extended.
We manage credit risk through a program of underwriting standards, the review of certain credit decisions and an on-going process of assessment of the quality of credit already extended. Our credit standards and on-going process of credit assessment might not protect us from significant credit losses.
Removed
Instability in geopolitical matters, as well as volatility in financial markets, may have a material adverse effect on our industry and our business. The macroeconomic environment in the U.S. is susceptible to global events and volatility in financial markets. The unrest in Israel and the Middle East could escalate and cause financial market volatility.
Added
If any of the following risks occur, our business, financial condition or results of operations could be negatively affected.
Removed
In addition, the ongoing invasion of Ukraine by Russian military forces that began in early 2022 resulted in significant market and other disruptions, including volatility of commodity prices and supply of energy, food, and other commodities.
Added
Our credit administration function employs risk management techniques to ensure that loans adhere to corporate policy and problem loans are promptly identified.
Removed
Trade negotiations between the U.S. and other nations remain uncertain as the extent and duration of this military conflict and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time.
Added
We may be unable to integrate the business of the Company and Middlefield successfully or realize the anticipated benefits of the Merger. The Merger of Middlefield into Farmers was completed on March 2, 2026.
Removed
Changes to United States tariff and import/export regulations may have a negative effect on our industry and our business. There has been on-going discussion and commentary regarding potential significant changes to United States trade policies and tariffs, including imposing higher tariffs or implementing more restrictive trade policies.
Added
The combination of two independent businesses is complex, costly and time-consuming, and we anticipate devoting significant management attention and resources to integrating the business practices and operations of Middlefield into ours.
Removed
The current administration has created significant uncertainty about the future relationship between the United States and other countries with respect to the trade policies and tariffs.
Added
Potential difficulties that we may encounter as part of the integration process include the following: • the inability to successfully combine our business and Middlefield’s business in a manner that permits us to achieve, on a timely basis, or at all, the enhanced revenue opportunities and cost savings and other benefits anticipated to result from the Merger; • complexities associated with managing the combined businesses, including difficulty addressing possible differences in operational philosophies and the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on depositors, borrowers, employees and other constituencies; • the inability to retain the service of key management and other key personnel; • the assumption of contractual obligations with less favorable or more restrictive terms; and • potential unknown liabilities and unforeseen increased expenses associated with the Merger.
Removed
These tariffs or other trade restrictions on products and materials that our customers import or export, or the perception that any of these tariffs or other trade restrictions could occur, could cause the prices of our customers’ products to increase which could reduce demand for such products, or reduce our customer margins, and adversely impact their revenues, financial results and ability to service debt.
Added
It is possible that the integration process could result in diversion of the attention of the Company’s management and the disruption of, or the loss of momentum in, the Company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies.
Removed
This could adversely affect our financial condition and results of operations. In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate, our business, financial condition and results of operations could be materially and adversely impacted in the future.
Added
Any of these issues could adversely affect our ability to maintain relationships with depositors, borrowers, employees and other constituencies or achieve the anticipated benefits of the Merger or could reduce our earnings or otherwise adversely affect our business, results of operations and financial condition.
Removed
Our credit standards and on-going process of credit assessment might not protect us from significant credit losses. We take credit risk by virtue of making loans, extending loan commitments and letters of credit and, to a lesser degree, purchasing non-governmental securities.
Added
Risks Relating to General Economic and Market Conditions Significant changes to the size, structure, powers and operations of the federal government, changes to U.S. economic policies, and uncertainties regarding these changes may cause economic disruptions which could adversely impact our business, results of operations and financial condition.
Removed
The adoption of the CECL model by the Company resulted in a onetime adjustment to equity in the amount of $1.9 million, net of tax.
Added
The current U.S. administration has implemented significant changes in federal priorities in the operations, structure, and policy focus of various federal agencies, as well as regulatory priorities, policy approaches and interpretations of existing laws by those federal agencies.
Removed
As a result of the implementation of the CECL model, the time horizon over which we are required to estimate future credit losses expanded, which could result in increased volatility in future provisions for credit losses.
Added
Moreover, leadership transitions at key federal agencies have impacted and may continue to impact rulemaking, supervision, enforcement, and examination priorities across the financial regulatory landscape. These developments may have varying and unpredictable effects on the banking and financial services industry that, which makes it difficult to anticipate and mitigate attendant risks.
Removed
We may also experience a higher or more volatile provision for credit losses due to higher levels of nonperforming loans and net charge-offs if commercial and consumer customers are unable to make scheduled loan payments. 18 We are subject to certain risks with respect to liquidity.
Added
Compliance with changing federal and regulatory priorities could, among other things, increase the costs of operating our business, reduce the demand for our products and services, impact our ability to achieve our business goals, and increase our legal, operational and reputational risks, any or all of which could materially adversely affect our results of operations. 20 Table of Contents The current U.S. administration also has implemented rapid shifts in macroeconomic policies, such as those relating to trade restrictions and tariffs, which have created significant uncertainties regarding U.S. economic growth, the potential for recession, and concerns over inflation.
Removed
In addition, in 2011 the FDIC approved a final rule that changed the deposit insurance assessment base and assessment rate schedule, adopted a new large-bank pricing assessment scheme and set a target size for the Deposit Insurance Fund.
Added
In order to mitigate the impact of unpredictable U.S. actions, global companies and governments may reduce the use of the U.S. dollar in world trade and financial transactions, which could result in further volatility in the financial markets and U.S. economy.
Removed
The rule, as mandated by the Dodd-Frank Act, finalized a target size for the Deposit Insurance Fund at 2 percent of insured deposits.
Added
Slow economic growth, economic contraction or recession, or shifts in broader consumer and business trends in the U.S. generally and regions we serve could significantly impact our ability to originate loans, the ability of borrowers to repay loans, and the value of the collateral securing loans.
Removed
The FDIC recently adopted rules revising assessments in a manner that benefits banks with assets of less than $10 billion, although there can be no assurance that such assessments will not change in the future. 22 We have a limited ability to control the amount of premiums we are required to pay for FDIC insurance.
Added
Other political and economic events within the United States, including changes in or disagreements over U.S. monetary policy and actions of the Federal Reserve, disagreements over long-term federal budget and deficit reduction plans, the threat of a U.S. government shutdown, disagreements over, or threats not to increase, the U.S. government’s borrowing limit, and risk of further downgrade of the ratings of U.S. government debt obligations, also may negatively impact financial markets and the U.S. and regional economy.
Removed
If there are additional financial institution failures or other significant legislative or regulatory changes, the FDIC may be required to increase assessment rates or take actions similar to those taken after 2008.
Added
Further, the perception of the potential for additional, significant changes in federal regulatory or economic policy also has increased uncertainty and may exacerbate declines in investor and consumer confidence, which in turn may adversely impact financial markets and the broader economy of the U.S. and the economy of regions we serve, perhaps suddenly and to a significant degree.
Removed
Increases in FDIC insurance assessment rates may materially adversely affect our results of operations and our ability to continue to pay dividends on our common shares at the current rate or at all. Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged.
Added
Regional business and economic conditions are a major driver of our results of operations. Difficult conditions in the regional business and economic environment, including those caused by the lack of stability and predictability of U.S. policymaking, may materially adversely affect our operating expenses, the quality of our assets, credit losses, and the demand for our products and services.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

0 edited+2 added−5 removed0 unchanged
Removed
Cybersecurity Risk Management and Strategy In the ordinary course of its business, the Bank relies on electronic communications and information systems to conduct its operations and to store sensitive data, and employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats.
Added
Item 1C. Cybersecurity 25 Item 2. Properties 26 Item 3. Legal Proceedings 26 Item 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. Reserved 27 Item 7.
Removed
Notwithstanding these defensive measures, the threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures.
Added
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 48 Item 8. Financial Statements and Supplementary Financial Data 50
Removed
While the Bank has not, to date, detected a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks , the Bank’s systems and those of its customers and third-party service providers are under constant threat and it is possible that we could experience a future significant event.
Removed
The Bank expects risks and exposures related to cybersecurity attacks to remain high for the foreseeable future. For further discussion of risks related to cybersecurity, see “Item 1A Risk Factors.” 25 Governance The Chief Risk Officer is responsible for overseeing the assessment and management of the Company's information security program.
Removed
The Chief Information Officer is responsible for execution, management, and administration of the information security tools and defenses of the program.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Pr operties. At December 31, 2024, the Company conducted its business from its main office at 30 South Broad Street, Canfield, Ohio and 62 full-service banking centers and 2 stand-alone loan production offices located in northeast Ohio. Farmers Trust operates five offices in northeast Ohio and Farmers Insurance operates two offices.
Biggest changeItem 2. Properties. At December 31, 2025, the Company conducted its business from its main office at 30 South Broad Street, Canfield, Ohio and 62 full-service banking centers and 2 stand-alone loan production offices located in northeast Ohio. Farmers Trust operates five offices in northeast Ohio and Farmers Insurance operates two offices.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeHowever, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not known. Item 4. Mine Safe ty Disclosures. Not applicable. 26 Part II
Biggest changeHowever, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not known.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed2 unchanged
Biggest changeQuarter Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 High $ 14.75 $ 13.36 $ 16.32 $ 16.29 Low $ 12.29 $ 11.55 $ 12.01 $ 13.64 Cash dividends paid per share $ 0.17 $ 0.17 $ 0.17 $ 0.17 Quarter Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 High $ 15.08 $ 13.31 $ 14.25 $ 14.72 Low $ 11.56 $ 10.82 $ 11.25 $ 10.38 Cash dividends paid per share $ 0.17 $ 0.17 $ 0.17 $ 0.17 The following table provides information regarding the Company's purchases of its common shares during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number of Shares that May Yet be Purchased Under the Program Beginning balance 497,047 October 1,918 $ 14.67 0 497,047 November 2,120 13.80 0 497,047 December 0 0 0 497,047 Ending balance 4,038 $ 14.21 0 497,047 On July 30, 2019, the Company announced that its Board of Directors authorized the purchase of up to 1,500,000 shares of its common stock in the open market or in privately negotiated transactions, from time to time and subject to market and other conditions.
Biggest changeMarch 31, June 30, September 30, December 31, Quarter Ended 2025 2025 2025 2025 High $ 14.51 $ 13.89 $ 15.30 $ 14.67 Low $ 12.80 $ 11.92 $ 13.19 $ 12.86 Cash dividends paid per share $ 0.17 $ 0.17 $ 0.17 $ 0.17 March 31, June 30, September 30, December 31, Quarter Ended 2024 2024 2024 2024 High $ 14.75 $ 13.36 $ 16.32 $ 16.29 Low $ 12.29 $ 11.55 $ 12.01 $ 13.64 Cash dividends paid per share $ 0.17 $ 0.17 $ 0.17 $ 0.17 The following table provides information regarding the Company's purchases of its common shares during the quarter ended December 31, 2025: Total Number of Shares Average Price Paid per Total Number of Shares Purchased as Part of Publicly Announced Maximum Number of Shares that May Yet be Purchased Under Period Purchased Share Program the Program Beginning balance 497,047 October 4,366 $ 14.26 0 497,047 November 0 0 0 497,047 December 0 0 0 497,047 Ending balance 4,366 $ 0 0 497,047 On March 1, 2023, the Company announced that its Board of Directors authorized the purchase of up to 1,000,000 shares of its common stock in the open market or in privately negotiated transactions, from time to time and subject to market and other conditions.
This 2023 Repurchase Program supersedes the Company’s prior share repurchase program discussed above. The 2023 Repurchase Program may be modified, suspended or terminated by the Company at any time. During 2024, no shares were repurchased under this plan. There were 497,047 shares left to repurchase under this plan at December 31, 2024. Ite m 6. Reserved. 27
This 2023 Repurchase Program supersedes the Company’s prior share repurchase program discussed above. The 2023 Repurchase Program may be modified, suspended or terminated by the Company at any time. During 2025, no shares were repurchased under this plan. There were 497,047 shares left to repurchase under this plan at December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuers Purchases of Equity Securities. Market Information regarding the Company’s Common Shares. Farmers’ common shares currently trade under the symbol “FMNB” on the Nasdaq Capital Market. Farmers had approximately 3,970 holders of record of common shares at March 1, 2025.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuers Purchases of Equity Securities. Market Information regarding the Company ’ s Common Shares. Farmers’ common shares currently trade under the symbol “FMNB” on the Nasdaq Capital Market. Farmers had approximately 37,672,309 holders of record of common shares at February 20, 2026.
Removed
During the first two months of 2023, 347,846 shares were repurchased under this plan. On March 1, 2023, the Company announced that its Board of Directors authorized the purchase of up to 1,000,000 shares of its common stock in the open market or in privately negotiated transactions, from time to time and subject to market and other conditions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 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 a lower level of brokered CDs utilized in 2024. 29 Average Balance Sheets and Related Yields and Rates (Table Dollar Amounts in Thousands except Per Share Data) Years ended December 31, 2024 2023 2022 AVERAGE AVERAGE AVERAGE BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE EARNING ASSETS Loans (1) (2) $ 3,227,384 $ 186,032 5.76 % $ 3,155,858 $ 172,161 5.46 % $ 2,358,724 $ 108,100 4.58 % Taxable securities 1,110,905 26,838 2.42 1,143,547 26,231 2.29 1,081,966 20,843 1.93 Tax-exempt securities (1) 386,643 12,165 3.15 419,557 13,283 3.17 465,855 14,952 3.21 Other investments 35,402 1,450 4.10 39,559 1,986 5.02 33,153 871 2.63 Federal funds sold and other cash 96,288 3,727 3.87 74,950 2,476 3.30 76,253 684 0.90 Total earning assets 4,856,622 230,212 4.74 4,833,471 216,137 4.47 4,015,951 145,450 3.62 NONEARNING ASSETS Noninterest-earning assets 234,297 205,683 128,757 Total Assets $ 5,090,919 $ 5,039,154 $ 4,144,708 INTEREST-BEARING LIABILITIES Time deposits $ 745,945 $ 29,329 3.93 % $ 654,717 $ 19,462 2.97 % $ 360,687 $ 3,044 0.84 % Brokered time deposits 25,389 1,108 4.36 132,895 6,204 4.67 56,965 1,240 2.18 Savings deposits 1,095,470 16,144 1.47 1,113,561 9,899 0.89 846,418 1,352 0.16 Demand deposits - interest bearing 1,396,193 34,588 2.48 1,415,425 27,541 1.95 1,392,058 7,449 0.54 Total interest-bearing deposits 3,262,997 81,169 2.49 3,316,598 63,106 1.90 2,656,128 13,085 0.49 Short term borrowings 293,488 14,105 4.81 160,964 8,357 5.19 55,668 1,408 2.53 Long term borrowings 87,749 4,090 4.66 88,439 4,086 4.62 87,972 3,427 3.90 Total borrowed funds 381,237 18,195 4.77 249,403 12,443 4.99 143,640 4,835 3.37 Total Interest-Bearing Liabilities 3,644,234 99,364 2.73 3,566,001 75,549 2.12 2,799,768 17,920 0.64 NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing 981,115 1,065,389 959,294 Other Liabilities 58,134 50,302 34,180 Stockholders' equity 407,436 357,462 351,466 Total Liabilities and Stockholders' Equity $ 5,090,919 $ 5,039,154 $ 4,144,708 Net interest income and interest rate spread $ 130,848 2.01 % $ 140,588 2.35 % $ 127,530 2.98 % Net interest margin 2.69 % 2.91 % 3.18 % (1) Interest on certain tax-exempt loans and tax-exempt securities in 2024, 2023 and 2022 is not taxable for Federal income tax purposes.
Biggest changeThe 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.
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. 28 Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position.
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. 28 Table of Contents Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows and financial position.
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 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.
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.
The Company uses cohort primarily for consumer loan portfolios. 46 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.
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.
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 The credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments.
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.
Contractual Obligations, Commitments, Contingent Liabilities and Off-Balance Sheet Arrangements The following table presents, as of December 31, 2024, 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.
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.
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, 2024. The Company uses two methodologies to analyze loan pools.
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 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, expect as may be required by applicable law. Results of Operations Comparison of Operating Results for the Years Ended December 31, 2024 and 2023.
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, expect as may be required by applicable law. Results of Operations Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 .
As of December 31, 2024, 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.
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.
Recent Accounting Pronouncements and Developments Note 1 to the consolidated financial statements discusses new accounting policies adopted by Farmers during 2024 and 2023 and the expected impact of accounting policies recently issued or proposed but not yet required to be adopted.
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.
Farmers originated both fixed rate and adjustable rate mortgages during 2024. 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.
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.
These loans and their potential loss exposure have been considered in management’s analysis of the adequacy of the allowance for credit losses. 40 Loan Commitments and Lines of Credit In the normal course of business, the Bank has extended various commitments for credit.
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.
Net Interest Income The Company recognized net interest income of $128.4 million for the year ended December 31, 2024, compared to $137.8 million for the year ended December 31, 2023. The tax-equivalent net interest margin declined from 2.91% for 2023 to 2.69% for 2024.
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 .
To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of December 31, 2024, 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.
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.
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
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
The gross charge-offs in the commercial real estate portfolio, were $4.6 million for 2024, which represented approximately 57.8% 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.
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.
At December 31, 2024, under the 44 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, 2024 and 2023.
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 .
PCE inflation of 2.50%, and U.S. unemployment of 4.30%, 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%.
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%.
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 $650 thousand for residential real estate loans and lending-related commitments • An increase of approximately $1.16 million 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.
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.
At year-end 2024 and 2023, the most recent regulatory notifications categorized Farmers Bank as well capitalized under the regulatory framework for prompt corrective action. 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.
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 following table shows the carrying value of investment securities by type of obligation at the dates indicated: December 31, 2024 2023 U.S.
The following table shows the carrying value of investment securities by type of obligation at the dates indicated: December 31, 2025 2024 U.S.
Nonperforming loans to total loans increased in 2024 primarily due to a single commercial real estate credit totaling $8.8 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.
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.
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 $101.4 million at December 31, 2024, compared to $99.5 million at December 31, 2023.
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 .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following presents a discussion and analysis of Farmers’ financial condition and results of operations by its management. The review highlights the principal factors affecting earnings and the significant changes in balance sheet items for the years 2024, 2023 and 2022.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. The following presents a discussion and analysis of Farmers’ financial condition and results of operations by its management. The review highlights the principal factors affecting earnings and the significant changes in balance sheet items for the years 2025 , 2024 and 2023 .
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 in Ukraine; • actions by the Federal Reserve Board, U.S.
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 in Ukraine; • 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.
For example, compared to the Company’s central scenario that is based on a four-quarter forecasted change in U.S. real GDP of 2.10% from 4Q2024 to 4Q2025, U.S.
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.
Noninterest Expenses Noninterest expense totaled $106.7 million for the year ended December 31, 2024 compared to $111.8 million for the year ended December 31, 2023. The decline was primarily driven by merger related costs which fell from $5.5 million in 2023 to $92 thousand in 2024.
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.
Commercial real estate loans increased to $1.38 billion at December 31, 2024 from $1.33 billion at December 31, 2023. The Company’s commercial real estate loan portfolio includes loans for owner occupied and non-owner occupied real estate.
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.
Commercial loans at December 31, 2024, totaled $351.5 million compared to $347.8 million at December 31, 2023. 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.
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.
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 Small Business Investment Company (“SBIC”) income in 2024 compared to 2023.
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 .
Premises and Equipment Premises and equipment increased $7.9 million from $44.4 million at December 31, 2023, to $52.3 million at December 31, 2024. This increase was primarily due to the construction of additional office space at the Company's headquarters in Canfield, OH, partially offset by depreciation.
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.
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.
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 .
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 Agricultural loans increased from $261.8 million in 2023 to $263.0 million in 2024.
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 .
For the commercial real estate and commercial categories, which represent 42.2% and 10.8% of the total loan portfolio in 2024, respectively, management relies on the Bank’s internal loan review procedures and allocates accordingly based on loan classifications.
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.
Loans comprised 66.5% of the Bank’s average earning assets in 2024, compared to 65.3% in 2023. 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.
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.
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 The following table summarizes the Company’s nonperforming loans and nonperforming assets for the years ending 2020 through 2024: Nonperforming Assets December 31, 2024 2023 2022 2021 2020 Nonaccrual loans: Commercial Real Estate $ 10,642 $ 5,852 $ 4,057 $ 3,004 $ 389 Commercial 3,858 1,802 3,840 7,190 3,789 Residential Real Estate 4,983 3,807 3,438 4,280 5,783 Consumer 600 461 494 682 864 Agricultural 2,120 2,486 2,482 314 680 Total Nonaccrual Loans $ 22,203 $ 14,408 $ 14,311 $ 15,470 $ 11,505 Loans Past Due 90 Days or More 615 655 492 725 2,330 Total Nonperforming Loans $ 22,818 $ 15,063 $ 14,803 $ 16,195 $ 13,835 Repossessed assets 33 166 73 0 0 Total Nonperforming Assets $ 22,851 $ 15,229 $ 14,876 $ 16,195 $ 13,835 Percentage of Nonperforming Loans to Total Loans 0.70 % 0.47 % 0.62 % 0.69 % 0.67 % Percentage of Nonperforming Assets to Total Assets 0.45 % 0.30 % 0.36 % 0.39 % 0.45 % Loans Delinquent 30-89 days $ 13,032 $ 16,705 $ 9,605 $ 8,891 $ 9,297 Percentage of Loans Delinquent 30-89 days to Total Loans 0.40 % 0.52 % 0.40 % 0.38 % 0.45 % Percentage of Nonaccrual Loans to Total Loans 0.68 % 0.45 % 0.60 % 0.66 % 0.55 % Percentage of Allowance for Credit Losses to Nonaccrual Loans 161.52 % 239.03 % 188.51 % 189.94 % 192.49 % The following table summarizes the Company’s allocation of the allowance for credit losses under CECL for the years 2021 through 2024 and the allowance for loan losses in 2020: December 31, 2024 2023 2022 2021 2020 Loans to Loans to Loans to Loans to Loans to Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans Commercial Real Estate $ 19,259 48.6 % $ 18,150 48.1 % $ 14,840 50.5 % $ 15,879 51.0 % $ 10,775 43.1 % Commercial 4,628 12.4 5,086 12.6 4,186 14.6 4,949 15.7 5,022 21.6 Residential Real Estate 7,271 30.7 6,917 30.8 4,374 25.3 4,870 24.9 3,684 25.2 Consumer 4,705 8.3 4,287 8.5 3,578 9.6 3,688 8.4 2,663 10.0 $ 35,863 100.0 % $ 34,440 100.0 % $ 26,978 100.0 % $ 29,386 100.0 % $ 22,144 100.0 % The allowance allocated to each of the four loan categories should not be interpreted as an indication that charge-offs in 2024 occurred in the same proportions or that the allocation indicates future charge-off trends.
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 Company’s agricultural loan portfolio contains a diverse mix of dairy, crops, land, poultry and cattle loans. Consumer loans increased to $268.5 million at December 31, 2024, from $267.9 million at December 31, 2023. The consumer loan portfolio includes indirect auto loans and other consumer loan products.
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.
At December 31, 2024, on a consolidated basis, Farmers had intangibles of $20.8 million subject to amortization and $167.5 million in goodwill, which was not subject to periodic amortization. The Company accounts for acquisitions under Financial Accounting Standards Board (“FASB”) ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting.
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.
The allowance for credit losses to total loans increased to 1.10% at December 31, 2024, compared to 1.08% at December 31, 2023. Nonperforming loans to total loans increased from 0.47% at December 31, 2023 to 0.70% at December 31, 2024.
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 .
During the years 2021-2024, the Company used the CECL methodology while the incurred loss methodology was used in 2020: Years Ended December 31, 2024 2023 2022 2021 2020 Balance at Beginning of Year $ 34,440 $ 26,978 $ 29,386 $ 22,144 $ 14,487 Charge-Offs: Commercial Real Estate (4,619 ) (349 ) (300 ) (70 ) (122 ) Commercial (1,742 ) (1,272 ) (2,042 ) (388 ) (412 ) Residential Real Estate (155 ) (384 ) (92 ) (297 ) (172 ) Consumer (1,471 ) (932 ) (870 ) (912 ) (1,347 ) Total Charge-Offs (7,987 ) (2,937 ) (3,304 ) (1,667 ) (2,053 ) Recoveries on Previous Charge-Offs: Commercial Real Estate 22 1 3 33 31 Commercial 520 103 75 199 11 Residential Real Estate 177 81 89 162 85 Consumer 447 496 479 411 483 Total Recoveries 1,166 681 646 805 610 Net Charge-Offs (6,821 ) (2,256 ) (2,658 ) (862 ) (1,443 ) Impact of CECL adoption 0 0 0 2,160 0 Provision For Credit Losses and Day One Purchase entry 8,244 9,718 250 5,944 9,100 Balance at End of Year $ 35,863 $ 34,440 $ 26,978 $ 29,386 $ 22,144 Ratio of Net Commercial Real Estate Charge-offs To Average Loans Outstanding 0.14 % 0.01 % 0.01 % 0.00 % 0.00 % Ratio of Net Commercial Charge-offs To Average Loans Outstanding 0.04 % 0.04 % 0.08 % 0.01 % 0.02 % Ratio of Net Residential Real Estate Charge-offs To Average Loans Outstanding 0.00 % 0.01 % 0.00 % 0.01 % 0.00 % Ratio of Net Consumer Charge-offs To Average Loans Outstanding 0.03 % 0.01 % 0.02 % 0.02 % 0.04 % Allowance for Credit Losses/Total Loans 1.10 1.08 1.12 1.26 1.07 The provision for credit losses, which includes the provision for unfunded commitments, declined to $8.0 million in 2024 compared to $9.2 million in 2023.
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 .
Investment Securities The debt securities available for sale decreased $33.1 million in 2024 to $1.27 billion at December 31, 2024, from $1.30 billion at December 31, 2023. For additional information regarding Farmers’ investment securities see Note 3 to the Consolidated Financial Statements.
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.
Average balances and average rates paid on deposits are as follows: Years Ended December 31 2024 2023 2022 Amount Rate Amount Rate Amount Rate Noninterest-bearing demand $ 981,115 0.00 % $ 1,065,389 0.00 % $ 959,294 0.00 % Interest-bearing demand 1,396,193 2.48 % 1,415,425 1.95 % 1,392,058 0.54 % Money market 659,807 2.43 % 602,445 1.62 % 389,036 0.14 % Savings 435,663 0.03 % 511,116 0.03 % 457,382 0.02 % Brokered time deposits 25,389 4.36 % 132,895 4.67 % 56,965 2.18 % Certificates of deposit 745,945 3.93 % 654,717 2.97 % 360,687 0.84 % Total $ 4,244,112 1.91 % $ 4,381,987 1.44 % $ 3,615,422 0.64 % The following table sets forth the maturities of retail certificates of deposit having principal amounts $250,000 or greater at December 31, 2024 (in thousands): Retail certificates of deposit maturing in quarter ending: March 31, 2025 $ 136,533 June 30, 2025 112,131 September 30, 2025 12,207 December 31, 2025 13,115 After December 31, 2025 11,025 Total retail certificates of deposit with balances $250,000 or greater $ 285,011 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.
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.
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.
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.
Salaries and employee benefits increased by $1.6 million to $58.9 million for the year ended December 31, 2024 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.
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.
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.
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.
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 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.
These loans are made to finance properties such as office and industrial buildings, hotels and retail shopping centers. 36 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, 2024 and 2023: (In Thousands of Dollars) Amortized Cost % of Commercial Real Estate % of Total Portfolio Weighted Average Loan-to-Value Weighted Average 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 % (In Thousands of Dollars) Amortized Cost % of Commercial Real Estate % of Total Portfolio Weighted Average Loan-to-Value Weighted Average Occupancy December 31, 2023 Commercial real estate Retail $ 354,953 23.09 % 11.10 % 55.16 % 85.26 % Farmland 202,726 13.19 % 6.34 % 51.24 % 100.00 % Warehouse/Industrial 166,291 10.82 % 5.20 % 56.04 % 70.99 % Office 175,020 11.38 % 5.47 % 53.91 % 75.04 % Multifamily 153,410 9.98 % 4.80 % 63.10 % 85.79 % Medical 154,890 10.08 % 4.84 % 51.51 % 92.64 % Hotel 49,695 3.23 % 1.55 % 48.64 % 79.59 % Special Purpose 99,152 6.45 % 3.10 % 55.10 % 99.88 % Restaurant 56,460 3.67 % 1.77 % 53.17 % 100.00 % Multifamily - Construction 27,860 1.81 % 0.87 % 59.02 % 22.06 % All Other 96,869 6.30 % 3.03 % 47.10 % 95.30 % Total $ 1,537,326 100.00 % 48.07 % Residential real estate mortgage loans increased to $1.00 billion at December 31, 2024, from $986.0 million at December 31, 2023.
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 .
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.
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.
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 for the twelve months ended December 31, 2024, compared to $9.0 million for the twelve months ended December 31, 2023.
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.
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 increased to $7.3 million for 2024 compared to $6.3 million in 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 .
Treasury securities $ 52,606 $ 53,210 U.S. government sponsored enterprise debt securities 62,501 74,745 Mortgage-backed securities - residential and collateralized mortgage obligations 626,643 594,385 Small Business Administration 2,475 2,917 Obligations of states and political subdivisions 504,880 556,169 Corporate bonds 17,448 18,275 Debt securities available for sale $ 1,266,553 $ 1,299,701 Other investments 14,736 15,114 Total securities $ 1,281,289 $ 1,314,815 41 A summary of debt securities held at December 31, 2024 classified according to maturity and including weighted average yield for each range of maturities is set forth below: December 31, 2024 Type and Maturity Grouping Fair Value Weighted Average Yield 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.
The increase was primarily due to net income of $45.9 million offset by an increase in accumulated other comprehensive loss of $20.7 million and dividends paid on common stock of $25.5 million.
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.
Intangible amortization expense decreased by $573,000 to $2.9 million for the year ended December 31, 2024 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.
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.
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.
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.
Refer to Note 18 to the consolidated financial statements for additional information regarding the effective tax rate. 32 Comparison of Operating Results for the Years Ended December 31, 2023 and 2022. The Company recorded net income of $49.9 million for the year ended December 31, 2023, compared to $60.6 million for the year ended December 31, 2022.
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 .
Treasury securities Maturing within one year $ 99 2.18 % Maturing after one year but within five years 35,629 1.04 % Maturing after five years but within ten years 16,878 1.21 % Maturing after ten years 0 0.00 % Total 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.
Deposits in amounts in excess of the FDIC insurance limit were $1.42 billion at December 31, 2024. Short-Term Borrowings The Company's short-term borrowings decreased by $50.0 million from $355.0 million at December 31, 2023, to $305.0 million at December 31, 2024.
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.
(2) Nonaccrual loans are included in the average balance totals. 30 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: 2024 change from 2023 2023 change from 2022 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 $ 13,871 $ 3,902 $ 9,969 $ 64,061 $ 36,533 $ 27,528 Taxable securities 607 (749 ) 1,356 5,388 1,186 4,202 Tax-exempt securities (1,118 ) (1,042 ) (76 ) (1,669 ) (1,486 ) (183 ) Other investments (536 ) (209 ) (327 ) 1,115 168 947 Funds sold and other cash 1,251 705 546 1,792 (12 ) 1,804 Total interest income $ 14,075 $ 2,607 $ 11,468 $ 70,687 $ 36,389 $ 34,298 Interest Expense Time deposits $ 9,867 $ 2,712 $ 7,155 $ 16,418 $ 2,481 $ 13,937 Brokered time deposits (5,096 ) (5,019 ) (77 ) 4,964 1,653 3,311 Savings deposits 6,245 (161 ) 6,406 8,547 427 8,120 Demand deposits 7,047 (374 ) 7,421 20,092 125 19,967 Short term borrowings 5,748 6,880 (1,132 ) 6,949 2,663 4,286 Long term borrowings 4 (32 ) 36 659 18 641 Total interest expense $ 23,815 $ 4,006 $ 19,809 $ 57,629 $ 7,367 $ 50,262 Increase (decrease) in tax equivalent net interest income $ (9,740 ) $ (1,399 ) $ (8,341 ) $ 13,058 $ 29,022 $ (15,964 ) 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.
(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.
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 in 2024 to $2.7 million, compared to $2.4 million for the twelve months ended December 31, 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.
The decrease was primarily due to a $14.1 million decrease in income before income taxes. 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 14.9% in 2023 and 16.8% for 2022.
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 decline was due to lower FDIC expense as the Company had higher capital levels in 2024 resulting in lower expense. 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.
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.
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.
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 spread across several categories of expense. Income Taxes Income tax expense increased from $8.8 million for the year ended December 31, 2023, to $9.5 million for the year ended December 31, 2024. The increase was primarily due to a higher effective tax rate and less benefit from low income housing tax credits.
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.
This increase was due to better yields on loans which increased from 5.46% in 2023 to 5.76% in 2024.
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 Company picked up additional business in 2024 and with the acquisition of Crest in December of 2024, revenue from this business should continue to increase in 2025. 31 Security losses increased to $2.6 million during the year ended December 31, 2024, from $471,000 for the year ended December 31, 2023.
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 increased net charge-off figure in 2024 was driven by a charge-off of $4.4 million for a single commercial credit backed by office space. 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 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.
Years Ended December 31, 2024 2023 2022 2021 2020 Commercial Real Estate $ 1,381,573 42.2 % $ 1,334,600 41.6 % $ 1,026,822 42.6 % $ 1,010,674 43.3 % $ 712,818 34.3 % Commercial 351,533 10.8 347,819 10.9 294,406 12.2 312,532 13.4 401,003 19.3 Residential Real Estate 1,003,678 30.8 986,032 30.8 607,557 25.3 580,242 24.9 523,340 25.2 Consumer 268,533 8.2 267,875 8.4 228,794 9.5 195,343 8.4 208,842 10.0 Agricultural 263,029 8.0 261,801 8.2 247,171 10.3 232,291 10.0 232,041 11.1 Total Loans $ 3,268,346 100.0 % $ 3,198,127 100.0 % $ 2,404,750 100.0 % $ 2,331,082 100.0 % $ 2,078,044 100.0 % 35 The following schedule sets forth maturities based on remaining scheduled repayments of principal for loans listed above as of December 31, 2024: Types of Loans 1 Year or less 1 to 5 Years 5 to 15 Years Over 15 Years Commercial $ 19,713 $ 181,984 $ 97,994 $ 51,842 Commercial Real Estate $ 124,311 $ 514,111 $ 630,941 $ 112,211 Residential Real Estate $ 9,782 $ 48,963 $ 215,293 $ 729,639 Consumer $ 4,076 $ 107,972 $ 132,043 $ 24,442 Agricultural $ 4,105 $ 36,625 $ 49,288 $ 173,011 The amounts of loans as of December 31, 2024, 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 $ 99,059 $ 1,524,346 $ 1,623,405 Fixed Rates of Interest 62,928 1,582,013 1,644,941 Total Loans $ 161,987 $ 3,106,359 $ 3,268,346 Total loans were $3.27 billion at December 31, 2024, compared to $3.20 billion at December 31, 2023, an increase of $70.2 million.
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.
Commitments 12/31/2024 Note Ref. 2025 2026 2027 2028 2029 Thereafter Deposits without maturity $ 3,429,116 Certificates of deposit and brokered time deposits 11 790,004 $ 21,574 $ 9,018 $ 4,098 $ 6,550 $ 6,419 Long-term borrowings 13 0 0 0 0 0 90,000 Leases 9 1,393 1,279 1,198 1,214 1,110 5,652 There are also $17.1 million of commitments to various partnership investment funds.
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.
Net Interest Income The Company recognized net interest income of $137.8 million for the twelve months ended December 31, 2023, compared to $124.2 million for the twelve months ended December 31, 2022. The tax-equivalent net interest margin declined from 3.18% for 2022 to 2.91% for the year ended December 31, 2023.
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 .
Other mortgage banking income was up $420,000 in 2023 compared to 2022. The increase was driven by slower prepayment speeds on the mortgage servicing portfolio in 2023 due to the higher level of interest rates. Debit card fees increased to $7.1 million in 2023 compared to $5.8 million in 2022. The increase was primarily due to the addition of Emclaire.
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.
This decrease was due to proceeds from the issuance of brokered time deposits being used to pay down short term borrowings. The Company uses short term borrowings to manage the ongoing fluctuations with loans and deposits, when necessary. Long-Term Borrowings Total long-term borrowings decreased $2.5 million to $86.2 million at December 31. 2024, from $88.7 million at December 31, 2023.
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 allowance for credit losses increased to $35.9 million at December 31, 2024, compared to $34.4 million at December 31, 2023. The increase was primarily driven by growth in the loan portfolio.
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.
Noninterest Income Noninterest income declined to $41.9 million for the year ended December 31, 2023 compared to $44.2 million for the year ended December 31, 2022. The major categories of noninterest income are discussed below. 33 Service charges on deposit accounts totaled $6.3 million in 2023 compared to $4.7 million in 2022.
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.
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.
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 income on federal funds sold and other interest income increased by $1.8 million in 2023 compared to 2022 primarily due to an increase of 239 bp in the yield on the portfolio. This portfolio is heavily impacted by the actions of the Federal Reserve.
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.
See Note 13 within Item 8 of this Annual report on Form 10-K for additional detail. 43 Stockholders’ Equity Total stockholders’ equity increased $1.6 million from $404.4 million at December 31, 2023, to $406.0 million at December 31, 2024.
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 due to earnings on the policies in 2024 offset slightly by proceeds from a death benefit. 42 Deposits Total deposits increased to $4.3 billion at December 31, 2024, from $4.2 billion at December 31, 2023, an increase of $89.4 million. Noninterest bearing deposits declined $61.1 million during 2024 to $965.5 million from $1.03 billion.
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.
Retirement plan consulting fees increased to $2.6 million for 2024 compared to $2.5 million for 2023.
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.
The increase was due to the acquisition of Emclaire. Bank owned life insurance income increased by $632,000 to $2.4 million for the twelve months ended December 31, 2023, compared to $1.8 million for the twelve months ended December 31, 2022.
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 .
This decline was primarily due to the migration of noninterest bearing deposits into interest bearing deposits as customers looked to take advantage of the increase in interest rates. Interest-bearing deposits increased $75.5 million to $3.2 billion at December 31, 2024, compared to $3.15 billion at December 31, 2023.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe assumptions and predictions include inputs to compute baseline net interest income, expected changes in rates on interest bearing deposit accounts and loans, competition and various other factors that are difficult to accurately predict. 2024 2023 ALCO Changes In Interest Rate (basis points) Result Result Guideline Net Interest Income Change +400 -9.0 % -6.2 % -12.5 % +300 -7.0 % -5.0 % -10.0 % +200 -4.7 % -3.4 % -7.5 % +100 -2.5 % -1.9 % -5.0 % -100 2.2 % 1.4 % -5.0 % -200 3.9 % 2.3 % -10.0 % -300 5.5 % 3.1 % -15.0 % -400 6.1 % 2.7 % -20.0 % Net Present Value Of Equity Change +400 -37.2 % -36.4 % -12.5 % +300 -27.3 % -26.8 % -10.0 % +200 -17.7 % -17.3 % -7.5 % +100 -9.0 % -8.7 % -5.0 % -100 5.5 % 5.3 % -10.0 % -200 7.1 % 7.2 % -15.0 % -300 4.4 % 5.1 % -20.0 % -400 1.5 % 3.5 % -25.0 % The yield curve has changed dramatically over the past three years.
Biggest changeThe assumptions and predictions include inputs to compute baseline net interest income, expected changes in rates on interest bearing deposit accounts and loans, competition and various other factors that are difficult to accurately predict. 2025 2024 ALCO Changes In Interest Rate (basis points) Result Result Guideline Net Interest Income Change +400 -6.6 % -9.0 % -12.5 % +300 -5.2 % -7.0 % -10.0 % +200 -3.4 % -4.7 % -7.5 % +100 -1.8 % -2.5 % -5.0 % -100 1.4 % 2.2 % -5.0 % -200 2.3 % 3.9 % -10.0 % -300 3.4 % 5.5 % -15.0 % -400 3.5 % 6.1 % -20.0 % Net Present Value Of Equity Change +400 -27.9 % -37.2 % -12.5 % +300 -20.7 % -27.3 % -10.0 % +200 -12.9 % -17.7 % -7.5 % +100 -6.2 % -9.0 % -5.0 % -100 3.1 % 5.5 % -10.0 % -200 2.4 % 7.1 % -15.0 % -300 -2.9 % 4.4 % -20.0 % -400 -2.5 % 1.5 % -25.0 % The yield curve has changed dramatically over the past three years.
To mitigate these results, the Company has prioritized employing strategies to shrink the longer duration investment portfolio and replace the 48 balances with assets having a shorter duration, including loans, in an effort to close the gap between the book and market rates.
To mitigate these results, the Company has prioritized employing strategies to shrink the longer duration investment portfolio and replace the balances with assets having a shorter duration, including loans, in an effort to close the gap between the book and market rates.
This unprecedented outcome was created by the events occurring over the past four years, namely, the massive influx of liquidity in the form of deposits in 2020 and 2021 from government assistance while interest rates were at their lowest; the deployment of these funds at the prevailing low rates; and now the usage of the deposits as consumers utilize their deposits in an effort to maintain living standards in this highly inflationary economy, which prevents the Company from investing in the higher rates that are now available.
This unprecedented outcome was created by the events occurring over the past five years, namely, the massive influx of liquidity in the form of deposits in 2020 and 2021 from government assistance while interest rates were at their lowest; the deployment of these funds at the prevailing low rates; and now the usage of the deposits as consumers utilize their deposits in an effort to maintain living standards in this highly inflationary economy, which prevents the Company from investing in the higher rates that are now available.
The remaining results of the simulations in the table above indicate that interest rate change results fall within internal limits established by the Company at both December 31, 2024, and December 31, 2023. A report on interest rate risk is presented to the Board of Directors and the ALCO on a quarterly basis.
The remaining results of the simulations in the table above indicate that interest rate change results fall within internal limits established by the Company at both December 31, 2025 , and December 31, 2024 . A report on interest rate risk is presented to the Board of Directors and the ALCO on a quarterly basis.
Other factors, such as market demand, interest rate outlook, regulatory restraint and strategic planning also have an effect on the desired balance sheet structure. 49
Other factors, such as market demand, interest rate outlook, regulatory restraint and strategic planning also have an effect on the desired balance sheet structure. 49 Table of Contents
These rate cuts were an attempt to guide the economy into a “soft landing”, where the still comparatively elevated rate will continue to bring down inflation without harming the job market or the economy.
These rate cuts in 2024 were an attempt to guide the economy into a “soft landing”, where the still comparatively elevated rate would continue to bring down inflation without harming the job market or the economy.
The above table presents results in the up rate scenarios that exceed internal policy limits for the Economic Value of Equity (“EVE”) for both year end periods.
Even with these six rate cuts over the last sixteen months, the discount rate remains elevated. 48 Table of Contents The above table presents results in the up rate scenarios that exceed internal policy limits for the Economic Value of Equity (“EVE”) for both year end periods.
Interest rate sensitive assets and liabilities are those which have rates subject to change within a future time period due to maturity of the instrument or changes in market rates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Important considerations in asset/liability management are liquidity, the balance between interest rate sensitive assets and liabilities and the adequacy of capital. Interest rate sensitive assets and liabilities are those which have rates subject to change within a future time period due to maturity of the instrument or changes in market rates.
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Item 7A. Quantitative and Qualitati ve Disclosures about Market Risk. Important considerations in asset/liability management are liquidity, the balance between interest rate sensitive assets and liabilities and the adequacy of capital.
Added
The committee cut rates by 25 basis points three more times in 2025 in an effort to prioritize employment to promote economic stability amid a slowing labor market. The new target rate set in December 2025 is 3.50% to 3.75%.

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