Mercer Bancorp's Assets Hit $176.2M, Loan Portfolio Shifts

TL;DR

**MSBB is making smart moves to diversify its loan book and expand geographically, but the slow growth in a competitive rural market means it's a long-term play, not a quick win.**

AI Summary

Mercer Bancorp, Inc. (MSBB) reported consolidated total assets of $176.2 million, total deposits of $144.0 million, and stockholders' equity of $24.6 million as of September 30, 2025. The company's primary business activities include holding Mercer Savings Bank's common stock, making contributions to the Mercer Savings Charitable Foundation, Inc., and retaining approximately 50.0% of the net proceeds from its initial stock offering in July 2023, which generated gross proceeds of approximately $9.7 million from the sale of 972,970 shares at $10.00 per share. Net loans, excluding loans held for sale, constituted 80.8% of total assets at September 30, 2025, with residential mortgages making up 54.7% ($78.8 million) and agricultural real estate loans 32.2% ($46.3 million) of the total loan portfolio. The company expanded its geographic footprint in 2025 by establishing a fifth branch office in Berne, Adams County, Indiana, and introduced a mobile branch for deposit services in eastern Indiana. The loan portfolio saw a decrease in total loans from $148.7 million in 2024 to $144.0 million in 2025, with agricultural loans decreasing by $7.2 million and residential loans increasing by $5.5 million. The allowance for credit losses remained stable at $960,307 in 2025 compared to $963,268 in 2024.

Why It Matters

Mercer Bancorp's stable asset base and strategic branch expansion into eastern Indiana signal a focused growth strategy in its rural market, potentially increasing its deposit market share beyond the current 5.60% in Mercer County and 1.58% in Darke County. The shift in its loan portfolio, with residential mortgages growing by $5.5 million while agricultural loans decreased by $7.2 million, indicates a potential diversification away from its historically agricultural-heavy base, which could mitigate risks associated with the volatile agricultural sector. For investors, this geographic and portfolio diversification could suggest a more resilient earnings profile, though competition from larger regional banks and fintechs remains a significant challenge. Employees and customers in the expanded Indiana market will benefit from increased local banking services.

Risk Assessment

Risk Level: medium — The company operates in a primarily rural, agricultural market, making it susceptible to 'conditions affecting our local agricultural industry, such as adverse weather conditions and the impact of government regulations,' as stated in the forward-looking statements. Additionally, the competitive landscape is intense, with Mercer Savings Bank ranking fifth among nine FDIC-insured institutions in Mercer County with only 5.60% market share and tenth among eleven in Darke County with 1.58% market share, indicating significant competition from larger banks and credit unions.

Analyst Insight

Investors should monitor MSBB's progress in its new Indiana market and the performance of its indirect automobile lending program, which currently holds $4.1 million in loans for investment. The shift towards residential mortgages and away from agricultural loans, alongside the stable allowance for credit losses, suggests a prudent approach to risk management, but sustained growth in a competitive rural environment will be key to future performance.

Key Numbers

• $176.2 million — Consolidated total assets (As of September 30, 2025)
• $144.0 million — Total deposits (As of September 30, 2025)
• $24.6 million — Stockholders' equity (As of September 30, 2025)
• $9.7 million — Gross offering proceeds (From initial stock offering completed July 26, 2023)
• 972,970 — Shares of common stock sold (In initial stock offering at $10.00 per share)
• 80.8% — Net loans as a percentage of total assets (As of September 30, 2025)
• $78.8 million — Residential mortgage loans (Representing 54.7% of total loan portfolio as of September 30, 2025)
• $46.3 million — Agricultural real estate loans (Representing 32.2% of total loan portfolio as of September 30, 2025)
• $4.1 million — Indirect automobile loans held for investment (As of September 30, 2025, representing 2.8% of total loan portfolio)
• $8.1 million — Automobile loans held for sale (As of September 30, 2025)

Key Players & Entities

• Mercer Bancorp, Inc. (company) — Registrant and bank holding company
• Mercer Savings Bank (company) — Wholly-owned subsidiary of Mercer Bancorp
• Federal Reserve (regulator) — Regulates Mercer Bancorp as a bank holding company
• Ohio Division of Financial Institutions (regulator) — Regulates Mercer Savings Bank
• Federal Deposit Insurance Corporation (regulator) — Regulates Mercer Savings Bank
• Mercer Savings Charitable Foundation, Inc. (company) — Recipient of 50,000 shares of common stock and $100,000 cash
• Clark, Schaefer, Hacket & Co. (company) — Auditor firm
• Celina, Ohio (location) — Headquarters of Mercer Bancorp and Mercer Savings Bank
• Berne, Adams County, Indiana (location) — Location of new fifth branch office established in 2025
• Employee Stock Ownership Plan (company) — Purchased 81,838 shares of common stock

FAQ

Risk Factors

• Credit Risk in Loan Portfolio [high — financial]: The company's primary exposure to credit risk stems from its loan portfolio, which constituted 80.8% of total assets as of September 30, 2025. A significant portion of this portfolio is concentrated in residential mortgages (54.7% or $78.8 million) and agricultural real estate loans (32.2% or $46.3 million). While the allowance for credit losses remained stable at $960,307 in 2025, a downturn in the agricultural sector or housing market could lead to increased loan defaults.
• Interest Rate Sensitivity [medium — market]: As a financial institution, Mercer Bancorp is exposed to interest rate risk. Changes in interest rates can affect the net interest margin, the market value of its investment securities, and the demand for its loan products. The company's substantial holdings in residential mortgages, which are typically long-term, make it particularly sensitive to fluctuations in long-term interest rates.
• Branch Expansion and Integration [medium — operational]: The company expanded its geographic footprint in 2025 by opening a fifth branch and introducing a mobile branch. While this aims to increase market reach, it also introduces operational risks related to managing new facilities, integrating new staff, and ensuring consistent service delivery across all locations. The success of these expansions is critical for future growth.
• Compliance with Banking Regulations [high — regulatory]: As a bank holding company and operator of a savings bank, Mercer Bancorp is subject to extensive federal and state banking regulations. Non-compliance can result in significant fines, penalties, and reputational damage. The company must continually adapt to evolving regulatory requirements, including those related to capital adequacy, liquidity, and consumer protection.
• Dependence on Net Interest Income [medium — financial]: The company's profitability is heavily reliant on net interest income, which is the difference between interest earned on assets (primarily loans) and interest paid on liabilities (primarily deposits). A narrowing net interest margin due to increased funding costs or decreased asset yields could negatively impact earnings.

Industry Context

Mercer Bancorp operates within the highly competitive community banking sector, characterized by a focus on local markets and relationship-based lending. The industry is undergoing consolidation and faces increasing competition from larger financial institutions and fintech companies. Trends include a growing demand for digital banking services and evolving regulatory landscapes impacting capital requirements and operational flexibility.

Regulatory Implications

As a bank holding company, Mercer Bancorp is subject to stringent oversight from federal and state regulators, including the Federal Reserve and state banking departments. Compliance with capital adequacy ratios, liquidity requirements, and consumer protection laws is paramount and requires continuous investment in systems and personnel.

What Investors Should Do

1. Monitor loan portfolio composition and credit quality trends, particularly in the agricultural and residential mortgage segments.
2. Evaluate the impact of branch expansion on operational efficiency and profitability.
3. Assess the company's net interest margin trends in light of current interest rate environments.

Key Dates

• 2023-07-26: Initial Stock Offering Completed — Generated gross proceeds of approximately $9.7 million, providing capital for operations and strategic initiatives. Retained 50.0% of net proceeds.
• 2025-09-30: Fiscal Year End — Reporting period for key financial metrics including $176.2 million in total assets, $144.0 million in total deposits, and $24.6 million in stockholders' equity.

Glossary

Allowance for credit losses

An estimate of the amount of uncollectible loans in a company's loan portfolio. It is a contra-asset account that reduces the carrying value of loans to their net realizable amount. (Indicates the company's assessment of potential loan defaults. Remained stable at $960,307 in 2025.)

Net interest margin

The difference between the interest income generated by a financial institution and the interest paid out to its lenders (for example, depositors), expressed as a percentage of the average earning assets. (A key profitability metric for banks, directly impacted by interest rate changes and loan portfolio performance.)

Loans held for sale

Loans that a financial institution intends to sell in the near future, rather than hold for investment. These are typically valued at the lower of cost or fair value. (Distinguishes between loans intended for immediate sale ($8.1 million in automobile loans) and those held for long-term investment.)

Stockholders' equity

The residual interest in the assets of an entity after deducting all its liabilities. For a bank holding company, it represents the ownership stake of shareholders. (Represents the book value of the company. Stood at $24.6 million as of September 30, 2025.)

Year-Over-Year Comparison

The company reported $176.2 million in total assets as of September 30, 2025, a decrease from the previous year's reported total assets of $148.7 million in loans. Total loans decreased from $148.7 million in 2024 to $144.0 million in 2025, driven by a $7.2 million reduction in agricultural loans, partially offset by a $5.5 million increase in residential loans. The allowance for credit losses remained relatively stable, indicating consistent risk management practices despite portfolio shifts.

Key Financial Figures

• $0.01 — (g) of the Act: Common Stock, par value $0.01 per share Indicate by check mark if th
• $9.7 m — ing offering expenses) of approximately $9.7 million, based on the offering price of $
• $10.00 — million, based on the offering price of $10.00 per share. The Company also contributed
• $100,000 — f Contents shares of common stock and $100,000 in cash to the Mercer Savings Charitabl
• $176.2 m — ompany had consolidated total assets of $176.2 million, total deposits of $144.0 million
• $144.0 million — ts of $176.2 million, total deposits of $144.0 million and stockholders' equity of $24.6 milli
• $24.6 million — 4.0 million and stockholders' equity of $24.6 million. Since its incorporation, Mercer Bancor
• $78,036 — timated 2025 median household income is $78,036 for Mercer County and $64,654 for Darke
• $64,654 — income is $78,036 for Mercer County and $64,654 for Darke County, compared to $66,990 s
• $66,990 — d $64,654 for Darke County, compared to $66,990 statewide and $83,770 nationwide. Estim
• $83,770 — unty, compared to $66,990 statewide and $83,770 nationwide. Estimated 2025 median house
• $86,279 — timated 2025 median household income is $86,279 for Adams County and $53,600 for Jay Co
• $53,600 — income is $86,279 for Adams County and $53,600 for Jay County. The September 2025 unem
• $4.1 m — lending program. At September 30, 2025, $4.1 million, or 2.8% of our total loan portfo
• $8.1 million — for investment and we had an additional $8.1 million of automobile loans held for sale. Loa

Filing Documents

• tmb-20250930x10k.htm (10-K) — 5773KB
• tmb-20250930xex23.htm (EX-23) — 3KB
• tmb-20250930xex23d1.htm (EX-23.1) — 13KB
• tmb-20250930xex31d1.htm (EX-31.1) — 14KB
• tmb-20250930xex31d2.htm (EX-31.2) — 14KB
• tmb-20250930xex32.htm (EX-32) — 10KB
• tmb-20250930x10k010.jpg (GRAPHIC) — 9KB
• tmb-20250930x10k011.jpg (GRAPHIC) — 8KB
• tmb-20250930xex23001.jpg (GRAPHIC) — 9KB
• tmb-20250930xex23002.jpg (GRAPHIC) — 11KB
• tmb-20250930xex23d1001.jpg (GRAPHIC) — 9KB
• 0001104659-25-123303.txt ( ) — 21723KB
• tmb-20250930.xsd (EX-101.SCH) — 67KB
• tmb-20250930_cal.xml (EX-101.CAL) — 113KB
• tmb-20250930_def.xml (EX-101.DEF) — 297KB
• tmb-20250930_lab.xml (EX-101.LAB) — 715KB
• tmb-20250930_pre.xml (EX-101.PRE) — 598KB
• tmb-20250930x10k_htm.xml (XML) — 5668KB

Business

Item 1. Business 1

Risk Factors

Item 1A. Risk Factors 27

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 28

Cybersecurity

Item 1C. Cybersecurity 28

Properties

Item 2. Properties 29

Legal Proceedings

Item 3. Legal Proceedings 30

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 30 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31

[Reserved]

Item 6. [Reserved] 31

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 43

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 43

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43

Controls and Procedures

Item 9A. Controls and Procedures 43

Other Information

Item 9B. Other Information 44

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 44 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 45

Executive Compensation

Item 11. Executive Compensation 45

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 45

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 45

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 45 P art IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 46

Form 10-K Summary

Item 16. Form 10-K Summary 47 Index to Financial Statements F-1 Signature Page F-46 Table of Contents PART I

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K of Mercer Bancorp, Inc. (which we may refer to as "we," "us," the "Company" or "Mercer Bancorp") contains forward-looking statements, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "believe," "contemplate," "continue," "target" and words of similar meaning. These forward-looking statements include, but are not limited to: estimates of our risks and future costs and benefits. These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Annual Report on Form 10-K. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: general economic conditions, either nationally or in our market area, which are worse than expected, including the effects of inflation and monetary policy; conditions affecting our local agricultural industry, such as adverse weather conditions and the impact of government regulations, including changes in price supports, tariffs on agricultural products, trade agreements, subsidies and environmental regulations, any of which may affect the ability of our agricult

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