ex_957633.htm

EX-99.3 5 ex_957633.htm EXHIBIT 99.3 ex_957633.htm

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Farmers and Middlefield, and has been prepared to illustrate the financial effect of the Merger. The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Farmers and its subsidiaries and of Middlefield and its subsidiaries, as an acquisition by Farmers of Middlefield using the acquisition method of accounting (Accounting Standards Codification (ASC) 805 “Business Combinations”) and giving effect to the related pro forma adjustments described in the accompanying notes. Under the acquisition method of accounting, the assets and liabilities of Middlefield will be recorded by Farmers at their respective fair values as of the date the Merger is completed. The pro forma financial information should be read in conjunction with Farmers’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 and Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which are incorporated by reference herein, and Middlefield’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 and Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which are incorporated by reference herein.

In November 2025, the FASB issued Accounting Standards Update 2025-08, Financial Instruments – Credit Losses (Topic 326). ASU 2025-08 expands the use of the gross up method to certain acquired loans beyond purchased financial assets with credit deterioration. The ASU applies the gross-up method to acquired non-PCD assets that are purchased seasoned loans ultimately eliminating the Day 1 credit loss expense and reducing interest income recognized in subsequent periods. The ASU is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2026 and is applied on a prospective basis. Early adoption is permitted. If the ASU is adopted early, the impact would be to remove the CECL expense of $15.1 million which would instead gross up the balance sheet and reduce goodwill.

The unaudited pro forma condensed combined financial information set forth below assumes that the Merger was consummated on January 1, 2024 for purposes of the unaudited pro forma condensed combined statements of income and September 30, 2025 for purposes of the unaudited pro forma condensed combined balance sheet and gives effect to the Merger, for purposes of the unaudited pro forma condensed combined statements of income, as if it had been effective during the entire period presented.

These unaudited pro forma condensed combined financial statements reflect the Merger based upon estimated preliminary acquisition accounting adjustments. Actual adjustments will be made as of the effective date of the Merger and, therefore, may differ from those reflected in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial statements included herein are presented for informational purposes only and do not necessarily reflect the financial results of the combined company had the companies actually been combined at the beginning of each period presented. The adjustments included in these unaudited pro forma condensed financial statements are preliminary and may be revised. This information also does not reflect the benefits of the expected cost savings, expense efficiencies or any potential balance sheet restructuring, opportunities to earn additional revenue, potential impacts of current market conditions on revenues, or asset dispositions, among other factors, and includes various preliminary estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the Merger had been consummated on the date or at the beginning of the period indicated or which may be attained in the future. The unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with and are qualified in their entirety by reference to the historical consolidated financial statements and related notes thereto of Farmers and its subsidiaries and of Middlefield and its subsidiaries. Such information and notes thereto are incorporated by reference herein.

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2025

	Farmers			Middlefield			Pro Forma Adjustments			Pro Forma Combined			Pro Forma Notes
ASSETS
Cash and cash equivalents	$	92,345		$	103,705		$	—		$	196,050
Securities available for sale (including equity securities)		1,301,766			155,855			—			1,457,621
Loans held for sale		4,975			209			—			5,184
Loans		3,337,780			1,607,024			(35,791	)		4,909,013		A
Allowance for credit losses		(39,528	)		(23,029	)		(5,375	)		(67,932	)	B
Net Loans		3,298,252			1,583,995			(41,166	)		4,841,081
Premises and equipment, net		56,639			22,426			2,500			81,565		C
Bank owned life insurance		118,475			35,335			—			153,810
Goodwill		167,450			36,356			79,600			283,406		D
Other intangibles		18,563			4,862			18,238			41,663		E
Other assets		177,110			36,150			3,765			217,025		F
Total assets	$	5,235,575		$	1,978,893		$	62,937		$	7,277,405
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	994,604		$	410,612		$	—		$	1,405,216
Interest-bearing		3,405,911			1,211,690			(1,037	)		4,616,564		G
Total deposits		4,400,515			1,622,302			(1,037	)		6,021,780
Short-term borrowings		235,000			106,000			—			341,000
Long-term borrowings		86,581			11,502			(2,400	)		95,683		H
Other liabilities		47,530			14,969			8,404			70,903		I
Total liabilities		4,769,626			1,754,773			4,967			6,529,366
Commitments and contingent liabilities Stockholders’ equity:
Common stock		366,214			162,349			140,108			668,671		J
Additional paid-in-capital		—			1,041			(1,041	)		—		K
Retained earnings		277,930			120,514			(140,881	)		257,563		L
Accumulated other comprehensive loss		(155,085)			(18,875)			18,875			(155,085)		M
Treasury stock		(23,110	)		(40,909	)		40,909			(23,110	)	N
Total stockholders’ equity		465,949			224,120			57,970			748,039
Total liabilities and stockholders’ equity	$	5,235,575		$	1,978,893		$	62,937		$	7,277,405
Shares outstanding		37,646,549			8,086,886			13,563,579			59,297,014		U

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

*(In thousands, except per share data)*	Farmers		Middlefield			Pro Forma Adjustments			Pro Forma Combined		Pro Forma Notes
Interest and dividend income:
Loans, including fees	$	142,361	$	73,994		$	6,711		$	223,066	O
Securities and other		32,013		6,323			4,480			42,816	P
Total interest income		174,374		80,317			11,191			265,882
Interest expense:
Deposits		60,329		25,646			—			85,975
Borrowings		8,620		3,571			150			12,341	Q
Total interest expense		68,949		29,217			150			98,316
Net interest income		105,425		51,100			11,041			167,566
Provision (credit) for credit losses		4,763		(19	)		—			4,744
Net interest income after provision (credit) for credit losses		100,662		51,119			11,041			162,822
Total non-interest income		34,032		7,346			(37	)		41,341	R
Total non-interest expense		87,381		38,942			1,779			128,102	S
Income before income taxes		47,313		19,523			9,225			76,061
Provision for income taxes		7,364		3,216			1,937			12,517	T
Net income		39,949		16,307			7,288			63,544
Basic earnings per common share:
Earnings per share	$	1.07	$	2.02					$	1.09
Weighted average shares outstanding		37,430,415		8,081,573			12,930,517			58,442,505	U
Diluted earnings per common share:
Earnings per share	$	1.06	$	2.01					$	1.08
Weighted average shares outstanding		37,626,099		8,130,213			13,008,341			58,764,653	U

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2024

*(In thousands, except per share data)*	Farmers		Middlefield		Pro Forma Adjustments			Pro Forma Combined		Pro Forma Notes
Interest and dividend income:
Loans, including fees	$	185,710	$	92,566	$	8,948		$	287,224	O
Securities and other		42,022		8,696		5,973			56,691	P
Total interest income		227,732		101,262		14,921			343,915
Interest expense:
Deposits		81,169		33,263		1,037			115,469	V
Borrowings		18,195		7,319		200			25,714	Q
Total interest expense		99,364		40,582		1,237			141,183
Net interest income		128,368		60,680		13,684			202,732
Provision for credit losses		7,966		2,008		15,143			25,117	W
Net interest income after provision for credit losses		120,402		58,672		(1,459	)		177,615
Total non-interest income		41,716		7,213		(50	)		48,879	R
Total non-interest expense		106,691		47,541		12,744			166,976	X
Income before income taxes		55,427		18,344		(14,253	)		59,518
Provision for income taxes		9,478		2,825		(2,993	)		9,310	T
Net income		45,949		15,519		(11,260	)		50,208
Basic earnings per common share:
Earnings per share	$	1.23	$	1.93				$	0.86
Weighted average shares outstanding		37,327,848		8,075,300		12,920,480			58,323,628	U
Diluted earnings per common share:
Earnings per share	$	1.22	$	1.92				$	0.86
Weighted average shares outstanding		37,511,885		8,086,098		12,937,757			58,535,740	U

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note1 - Under the terms of the Merger Agreement, Middlefield will merge into Farmers, with Middlefield shareholders receiving 2.6 shares of Farmers common shares for each share of Middlefield common shares held. The unaudited pro forma combined condensed consolidated financial statements have been prepared using the acquisition method of accounting, giving effect to the Merger. The unaudited pro forma combined condensed consolidated balance sheet combines the historical information of Farmers and Middlefield as of September 30, 2025, and assumes the Merger was completed on that date. The unaudited pro forma combined condensed consolidated statements of income combine the historical financial information of Farmers and Middlefield and give effect to the Merger as if it had been completed as of January 1, 2024 and carried forward through December 31, 2024 and the nine months ended September 30, 2025.

The preliminary estimated merger consideration and allocation of the purchase price is as follows:

Common shares of Middlefield as of September 30, 2025		8,086,886
Stock based compensation to be converted		240,216
Total shares to be converted		8,327,102
Exchange ratio		2.60
Farmers shares to be issued		21,650,465
Price per share of Farmers common stock (closing price December 3, 2025)	$	13.97
Preliminary estimated merger consideration	$	302,457

The purchase price will depend on the market price of Farmers common stock when the acquisition is consummated. Farmers management believes that a 15% fluctuation in the market price of its common stock is reasonably possible based on historical volatility, and the potential effect on purchase price would be:

	“Farmers Share Price”		“Purchase Price (In Thousands)”
As presented	$	13.97		302,457
15% increase	$	16.07		347,826
15% decrease	$	11.87		257,088

	Middlefield Book Value		Fair Value Adjustments			Fair Value
Preliminary estimated merger consideration						$	311,983
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and due from banks	$	103,705	$	0		$	103,705
Securities available for sale		155,855		0			155,855
Loans held for sale		209		0			209
Loans, net of allowance for credit losses		1,583,995		(26,023	)		1,557,972
Premise and equipment		22,426		2,500			24,926
Bank owned life insurance		35,335		0			35,335
Core deposit intangible		0		23,100			23,100
Other assets		36,150		249			36,399
Total identifiable assets acquired		1,937,675		(174	)		1,937,501
Deposits		1,622,302		(1,037	)		1,621,265
Borrowed funds		117,502		(2,400	)		115,102
Other liabilities		14,969		(336	)		14,633
Total liabilities assumed		1,754,773		(3,773	)		1,751,000
Total Identifiable net assets		182,902		3,599			186,501
Goodwill				115,956			115,956
Total allocation	$	182,902	$	119,555		$	302,457

A -

Adjustment to loans reflects the estimated interest rate fair value mark on the portfolio of $20.6 million and credit fair value mark related to non-purchased credit-deteriorated (“PCD”) loans of $15.1 million based on estimates of expected cash flows and $13.3 million on loans preliminarily identified as PCD, resulting in a discount on Middlefield’s portfolio. The final component is a $13.3 million increase adjustment, representing a gross up of PCD loans.

B -	Adjustment to reflect the elimination of Middlefield’s ACL totaling $23.0 million, the $13.2 million addition to the ACL attributable to loans identified as PCD and the day 1 recognition of the ACL related to non-PCD loans of $15.1 million.

C -	Adjustments to premises and equipment represents adjustments to appraised values.

D -	Goodwill was adjusted to remove Middlefield’s goodwill totaling $36.4 million and to record estimated goodwill of $116.0 million resulting from the Merger.

E -	Other intangibles were adjusted to remove Middlefield’s core deposit intangible asset totaling $4.9 million and to record the estimated core deposit intangible resulting from the Merger of $23.1 million.

F -	Adjustments to other assets represents a fair value adjustment of $249,000 for mortgage servicing rights and the recording of the estimated net deferred tax asset of $3.5 million resulting from the Merger.

G -	Adjustment to interest-bearing deposits represents time deposits adjusted to fair value.

H -	Adjustment to trust preferreds to reflect liquidity and interest rate estimates resulting in a discount on Middlefield’s debt.

I -	Adjustment to accrue estimated merger-related expenses, net of tax expected to be incurred by Farmers.

J -	Adjustment to eliminate Middlefield’s capital accounts, and to record the issuance of 21,650,465 shares of Farmers common stock to Middlefield’s shareholders.

K -	Adjustment to eliminate Middlefield’s capital surplus

L -

Adjustment to eliminate Middlefield’s retained earnings, to record the after tax merger costs expected to be incurred by Farmers and to record the after-tax provision for credit losses of $12.0 million resulting from the non-PCD loan provision for credit losses recorded immediately following the consumption of the merger.

M -	Adjustment to eliminate Middlefield’s accumulated other comprehensive income.

N -	Adjustment to eliminate Middlefield’s treasury stock.

O -	Adjustment to record loan discount accretion of the estimated fair value mark, based on the expected average life of the portfolio.

P -	Adjustment to record investment securities discount accretion of the estimated fair value mark, based on the expected average life of the portfolio.

Q -	Adjustment to record discount accretion of the estimated fair value mark over the remaining contractual maturity of the underlying instruments stated term.

R -	Adjustment to record the amortization of the estimated fair value mark on mortgage servicing rights over its expected average life.

S -	Adjustment to record amortization of the estimated core deposit intangible (CDI) and estimated fixed asset fair value mark over their expected lives.

T -	Adjustment to recognize the tax impact of pro forma transactions related adjustment at 21%.

U -	Adjustment to Middlefield common shares reflecting the conversion ratio of 2.60 at closing. V - Adjustment to record amortization of estimated time deposit mark.

W -	To record the provision for credit losses of $15.1 million resulting from the non-PCD loan provision for credit losses recorded immediately following the consummation of the Merger.

X -	Adjustment to record amortization of the estimated core deposit intangible (CDI) and estimated fixed asset fair value mark over their expected lives and record merger expense incurred by Farmers.