FARMERS NATIONAL BANC CORP /OH/ Material Event - Shareholder Approval for Middlefield Banc Corp. Acquisition

FARMERS NATIONAL BANC CORP /OH/ (FMNB) has announced a significant step forward in its planned acquisition of Middlefield Banc Corp. (MBCN). This summary breaks down the key details from the recent 8-K filing, providing a clear overview for investors.

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Key Development: Shareholders Approve Major Acquisition

Event Description: FARMERS NATIONAL BANC CORP /OH/ (FMNB) shareholders have approved the company's strategic acquisition of Middlefield Banc Corp. (MBCN). This approval marks a crucial milestone toward completing the merger agreement. Under the terms of this all-stock transaction, each share of Middlefield Banc Corp. common stock will convert into 0.75 shares of FARMERS NATIONAL BANC CORP common stock. To support this acquisition and ensure future financial flexibility, shareholders also approved an increase in FARMERS NATIONAL's authorized common stock from 100 million to 150 million shares.

Event Date/Timeline: FMNB announced this development on February 12, 2026, through an 8-K filing. Shareholders granted their approval at a special meeting held on February 10, 2026. This follows the original merger agreement signed on October 22, 2025. The merger is still expected to close in the second quarter of 2026, pending necessary regulatory approvals. FMNB anticipates the projected financial benefits, such as earnings per share (EPS) accretion, in the first full year post-integration (2027), with tangible book value earn-back expected within 2.5 years.

Financial Impact: Based on FARMERS NATIONAL's stock price at the time of the initial announcement, this deal values Middlefield Banc Corp. at approximately $200 million, or about $22.50 per share. The combined entity is projected to have approximately:

• $5.5 billion in assets
• $4.7 billion in deposits
• $4.1 billion in loans

The merger is expected to generate significant annual cost synergies of approximately $10 million, representing about 30% of Middlefield's non-interest expense. These savings are projected to make the transaction approximately 15% accretive to FARMERS NATIONAL's earnings per share (EPS) in the first full year post-integration (2027). While the transaction will result in an estimated 5% dilution to tangible book value (TBV) per share, FMNB expects to earn this back within 2.5 years. The increase in authorized shares from 100 million to 150 million provides the necessary stock for the all-stock transaction and supports future capital needs.

Strategic Rationale: Growth, Scale, and Financial Strength

This acquisition represents a strategic move for FARMERS NATIONAL to significantly expand its market presence and financial capabilities. By acquiring Middlefield Banc Corp., FARMERS NATIONAL aims to:

• Expand Geographic Reach: Middlefield Banc Corp. operates in complementary markets across Northeast Ohio and Western Pennsylvania, allowing FARMERS NATIONAL to strengthen its presence and serve new communities.
• Increase Scale and Market Share: The larger combined entity can achieve greater market share and influence.
• Drive Efficiency and Profitability: Expected cost synergies from operational efficiencies and reduced overhead are projected to enhance overall profitability.
• Enhance Shareholder Value: The projected EPS accretion and tangible book value earn-back demonstrate a financially sound long-term growth strategy.

Impact Assessment: Who Benefits and How

Impact on Stakeholders:

• Customers: Middlefield Banc Corp. customers will eventually transition to FARMERS NATIONAL, gaining access to a broader branch network, potentially new products and services, and enhanced digital banking capabilities. FARMERS NATIONAL customers may also benefit from an expanded branch footprint.
• Employees: While the company has committed to retaining talent, some roles may become redundant as operations streamline. The combined company will focus on integrating teams and cultures, which can be a period of adjustment.
• Investors (FARMERS NATIONAL): This shareholder approval significantly reduces uncertainty around the deal, bringing it closer to completion. Investors should note the increased share count resulting from the all-stock transaction. While this leads to initial tangible book value dilution, the projected EPS accretion and synergy realization are crucial for long-term value creation. The market's reaction to future news and financial reports will be important indicators.
• Local Communities: A larger, stronger bank can mean increased lending capacity for local businesses and continued community investment.

The Road Ahead: Next Steps and Potential Risks

The next critical step involves securing regulatory approvals from agencies such as the Federal Reserve and the Ohio Department of Financial Institutions. Assuming these approvals are granted, the merger is still expected to close in the second quarter of 2026.

Following the close, the integration process will begin. This complex undertaking involves combining IT systems, harmonizing product offerings, merging branch operations, and integrating employees. This process carries inherent risks:

• Integration Risk: Challenges in merging two distinct corporate cultures, retaining key employees, integrating complex IT systems, and preventing customer attrition could impact the realization of projected synergies and financial benefits.
• Regulatory Delays: While shareholder approval is secured, unexpected delays or conditions from regulators could push back the closing date.
• Economic Conditions: Unforeseen changes in the economic environment could impact the combined entity's performance and the value of the acquisition.
• Failure to Achieve Synergies: There is always a risk that projected cost savings and revenue enhancements may not be fully realized or may take longer to achieve than anticipated.

Investor Takeaways: What to Monitor

Key Takeaways for Investors:

• Regulatory Approval: Watch for announcements regarding final regulatory clearance. This represents the last major hurdle.
• Integration Progress: Future earnings calls and press releases will likely provide updates on the integration's progress. Successful integration is paramount to realizing the deal's benefits.
• Financial Performance: Monitor FARMERS NATIONAL's financial reports post-merger for evidence of the projected EPS accretion, synergy realization, and the earn-back of tangible book value dilution.
• Stock Performance: While shareholder approval reduces uncertainty, the stock price will continue to react to integration news, economic factors, and overall market sentiment regarding bank mergers.
• Long-Term Strategy: This acquisition underscores FARMERS NATIONAL's commitment to growth through strategic mergers and acquisitions. Investors should evaluate this deal within the context of the company's broader long-term strategy and execution capabilities.