Mercer Bancorp Reports 72.6% Decrease in Quarterly Net Income, Total Assets Slightly Down

Mercer Bancorp, Inc. reported its financial results for the three and six months ended March 31, 2025, revealing a net income of $35.4 million for the quarter, a significant decrease of 72.6% compared to $129.1 million in the same period last year. For the six-month period, net income rose slightly to $311.7 million from $302.6 million. The company's total interest income increased by 18% to $2.3 million for the quarter, driven primarily by a $336,000 increase in interest from loans, while total interest expense rose by 14% to $659,000, leading to a net interest income of $1.7 million, up 19.7% year-over-year.

In terms of operational changes, Mercer Bancorp experienced a notable increase in noninterest expenses, which rose by 26.1% to $1.7 million for the quarter, largely due to a significant rise in data processing costs following a conversion to a new core data processor. The provision for credit losses also increased to $28,000, reflecting a proactive approach to managing potential loan defaults. The allowance for credit losses stood at $934,000, representing 0.64% of total loans, slightly down from 0.65% at the end of the previous fiscal year.

The company’s loan portfolio showed mixed results, with total loans decreasing by 0.4% to $144.5 million. Residential real estate loans decreased by 1.6%, while agricultural loans increased by 2.5%. The total nonperforming loans rose to $749,000, up from $386,000, indicating a need for continued vigilance in credit quality management. The bank's strategy remains focused on growing its loan portfolio, particularly in residential and agricultural sectors, while also expanding its indirect automobile lending program.

Mercer Bancorp's total assets decreased slightly to $180.9 million, down 0.5% from the previous fiscal year, primarily due to declines in securities and loans held for sale. However, cash and cash equivalents increased by 13.8% to $6.7 million. The bank's deposits rose by 3.1% to $138.8 million, with a notable increase in certificates of deposit. The company also repurchased 16,997 shares of its common stock during the period, reflecting its commitment to returning value to shareholders.

Looking ahead, Mercer Bancorp aims to enhance its product offerings and improve customer engagement, particularly through the new branch office under construction in Berne, Indiana, expected to open in August 2025. The management remains optimistic about the bank's growth potential, despite the challenges posed by the current economic environment and competitive landscape.