MIDDLEFIELD BANC CORP: Shareholders Approve Merger with Farmers National Banc Corp.

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1. Event Description (What Happened)

Middlefield Banc Corp. shareholders have decisively approved the merger with Farmers National Banc Corp. This vote clears the path for Farmers to acquire Middlefield Banc Corp., transforming it from an independent entity into a part of a larger, combined banking operation.

Key Terms of the Deal (as previously announced): For each share of Middlefield Banc Corp. common stock, shareholders will receive 0.75 shares of Farmers National Banc Corp. common stock. This stock-for-stock transaction means Middlefield shareholders will become Farmers shareholders once the merger closes.

Shareholders overwhelmingly supported the merger, with over 6.3 million shares voting "For" the proposal, compared to approximately 366,000 "Against." They also provided advisory approval for the compensation packages designated for Middlefield's executives in connection with the merger. These packages typically include severance and retention arrangements, designed to ensure a smooth leadership transition during the integration process.

2. Event Date/Timeline

Middlefield Banc Corp. announced this significant development on Tuesday, February 10, 2026, following a special shareholder meeting held on the same day. This shareholder vote follows the initial announcement of the definitive merger agreement between Middlefield and Farmers.

With shareholder approval now secured, the merger remains on schedule. The companies continue to expect to complete the merger during the first quarter of 2026.

3. Impact Assessment (Who/What is Affected)

This approval marks a definitive step toward Middlefield Banc Corp. integrating with Farmers National Banc Corp., creating a stronger, more competitive financial institution with enhanced capabilities.

• For Investors: If you own Middlefield shares, they will convert into Farmers National Banc Corp. shares based on the 0.75 exchange ratio. Your investment will transition from Middlefield to Farmers, making you a shareholder in the larger, combined entity with a pro forma asset base exceeding $5 billion.
• For Customers: Middlefield customers will become Farmers National Banc Corp. customers. While the companies aim for a seamless transition, customers can anticipate changes to branding, potentially expanded branch networks, and a wider array of digital and traditional banking services.
• For Employees: Middlefield employees will transition to Farmers National Banc Corp. This integration will involve aligning corporate cultures, roles, and compensation structures. While some roles may become redundant due to operational efficiencies, the combined entity aims to retain key talent and offer new opportunities within the larger organization.
• For the Combined Entity: The merger will establish a larger, more robust regional bank with a stronger market presence and increased capacity for growth and investment. The strategic reasons for this combination include:
  • Expanded Geographic Reach: Broadening the combined entity's presence into new, attractive markets across Ohio and Pennsylvania.
  • Diversified Product Offerings: Customers will benefit from a broader range of financial products and services, leveraging the strengths of both institutions, including expanded commercial lending and wealth management capabilities.
• For Local Communities: The combined bank intends to maintain a strong community focus, utilizing the strengths of both institutions to support local economies and philanthropic initiatives. Furthermore, Middlefield's CEO, Thomas G. Murry, is expected to join the Farmers National Banc Corp. board of directors, ensuring continuity and local representation.

4. Financial Impact

The merger is structured as a stock-for-stock transaction, where Middlefield shareholders will receive 0.75 shares of Farmers National Banc Corp. common stock for each Middlefield share they own. Shareholders also approved the advisory vote on executive compensation packages related to the merger.

The combined entity expects to command a pro forma asset base exceeding $5 billion. Management anticipates achieving significant cost savings, estimated at approximately 15-20% of combined non-interest expenses, through reduced overhead, optimized technology platforms, and streamlined administrative functions. The transaction is projected to increase Farmers' earnings per share within one year of closing.

Middlefield's dividend policy will cease upon the merger's completion. Shareholders will then follow Farmers National Banc Corp.'s dividend policy (Farmers' current quarterly dividend is approximately $0.16 per share, subject to change by their board).

5. Key Takeaways for Investors

This is a significant moment for Middlefield Banc Corp. investors. Here's what you should keep in mind:

• Merger is Highly Likely: With shareholder approval secured, the merger is now highly probable, pending regulatory approvals and other standard closing conditions.
• Understand Your New Investment: If you own MBCN shares, you will become a shareholder of Farmers National Banc Corp. It is crucial to understand Farmers' business, financial performance, and strategic outlook, as your investment will now be tied to their future. Review Farmers' recent financial reports and investor presentations.
• Integration Risks: While the companies expect to achieve efficiencies, integrating two banks carries inherent risks. These include potential operational disruptions, challenges in retaining customers or employees, and the possibility that anticipated cost savings or revenue enhancements may not fully materialize. Regulatory approvals, though expected, are not guaranteed and could face delays.
• Monitor Regulatory Approvals: Before the deal can officially close, several customary closing conditions must be met. Crucially, this includes obtaining regulatory approvals from key agencies such as the Federal Reserve and the Ohio Department of Financial Institutions. Keep an eye on official announcements regarding the progress of these approvals, as they represent the final major hurdles.
• Volatility: Expect continued stock price volatility for both MBCN and FMNB as the market anticipates the closing and assesses the combined entity's prospects and the success of the integration.

This merger represents a transformative event for Middlefield Banc Corp., aiming to create a more robust and competitive regional bank. Stay informed by reviewing official filings and news from both companies.