Mercer Bancorp, Inc.

What they do

The company takes deposits from the general public and invests those funds, along with borrowings and operating cash flow, primarily in one- to four-family residential mortgage loans and agricultural real estate loans secured by properties in its market area. To a lesser extent, it originates consumer, multifamily, commercial real estate, construction and land, home equity, and commercial and industrial loans, and it invests in securities such as mortgage-backed securities and U.S. government-sponsored enterprise obligations. Funding comes mainly from core deposits, supplemented by Federal Home Loan Bank of Cincinnati advances and brokered deposits.

Revenue drivers

• Residential mortgage lending — At September 30, 2025, $78.8 million, or 54.7%, of the total loan portfolio consisted of residential mortgage loans; net interest income from these loans is the company's largest earnings source.
• Agricultural real estate lending — Agricultural real estate loans were $46.3 million, or 32.2% of the total loan portfolio at September 30, 2025, reflecting the rural economy of the market area.
• Indirect automobile lending — Started in January 2023, indirect auto loans are originated through car dealerships in western and southeastern Ohio and eastern Indiana; at September 30, 2025, $4.4 million, or 3.1%, of the total loan portfolio was indirect auto loans held for investment, with an additional $8.1 million of auto loans held for sale.
• Non-interest income — Consists primarily of service charges on deposit accounts, gains on sales of loans, and income from bank owned life insurance.

Recent performance

Annual net income rose to $972,305 in fiscal 2025 from $692,737 in fiscal 2024, while diluted EPS increased to $1.02 from $0.73. Operating cash flow was $1.9 million in fiscal 2025, compared with negative $8.1 million in fiscal 2024. At March 31, 2026, total assets were $173.9 million, total liabilities were $148.8 million, and shareholders' equity was $25.1 million, with cash and equivalents of $6.0 million. The company filed its fiscal 2025 Form 10-K on December 19, 2025, and its latest Form 10-Q on May 12, 2026. No indirect automobile loans were sold during the year ended September 30, 2025.

Strategy

Management's stated objective is to build long-term stockholder value by operating a profitable community-oriented financial institution. The company plans to continue focusing on originating one- to four-family residential mortgage loans and agricultural real estate loans for retention in the portfolio, while prudently growing and diversifying through an indirect automobile lending program. It intends to pool and sell some automobile loans to investors to enhance fee income, with efforts to market indirect auto loan pools to investor banks anticipated to begin in the second calendar quarter of 2026. Following its conversion and stock offering, the company intends to continue seeking to expand its residential and agricultural real estate portfolios. Funding priorities include core deposits, with Federal Home Loan Bank advances and brokered deposits used for liquidity and asset/liability management.

Risks

• Agricultural concentration — Agricultural real estate loans were 32.2% of the total loan portfolio at September 30, 2025, exposing the company to adverse weather, government regulation, tariffs, trade agreements, and subsidy changes affecting its agricultural customers.
• Interest rate and margin pressure — Changes in the interest rate environment could reduce margins and yields, reduce loan originations, or increase defaults, losses, and prepayments within the loan portfolio.
• Funding and deposit liquidity — The company relies on core deposits and uses Federal Home Loan Bank advances and brokered deposits, and changes in liquidity or the percentage of uninsured deposits could affect cost-effective funding.
• Indirect auto lending execution — The indirect automobile lending program is relatively new and small, and the company has not yet sold any indirect auto loans; efforts to market loan pools to investor banks are not expected to begin until the second calendar quarter of 2026.

Outlook

Management intends to continue expanding residential real estate and agricultural real estate portfolios and to prudently grow the indirect automobile lending segment. Marketing of indirect auto loan pools to investor banks is anticipated to begin in the second calendar quarter of 2026. The company also expects to continue using Federal Home Loan Bank advances and brokered deposits for liquidity and asset/liability management.