Merchants & Marine Bancorp Reports Third Quarter 2025 Financial Results, Highlights Growth Strategy and Pending Merger
Merchants & Marine Bancorp, Inc. the parent company of Merchants & Marine Bank, has released its financial results for the third quarter ended September 30, 2025. The company reported net income of $1.42 million, or $1.07 per share, for the quarter, compared to $1.93 million, or $1.45 per share, during the same quarter last year. While quarterly net income was lower year-over-year, the company recorded meaningful growth in total revenue and balance sheet expansion during the period, underscoring strategic initiatives underway across the organization.
Gross income for the quarter reached $14.88 million, representing a 14.17% increase compared to the third quarter of 2024. Over the past twelve months, total balance sheet assets increased 30.55%, rising to $947.47 million as of September 30, 2025. The company also saw continued growth in its lending activities. Net loans rose 3.87% year-over-year, increasing from $449.34 million to $466.73 million. Total deposits similarly expanded 3.69% year-over-year, growing from $582.31 million to $603.81 million.
A key contributor to the company’s balance sheet growth during the year was a temporary strategic investment position executed during the second quarter. Management implemented a match-funded approach by purchasing $200 million in variable-rate, Ginnie Mae–guaranteed Home Equity Conversion Mortgage (HECM) securities, funded using monthly repricing borrowings from the Federal Home Loan Bank of Dallas. This structure enabled the company to capture an approximately 80-basis-point yield spread while incurring virtually no credit or interest rate risk. The company intends to unwind this position upon the completion of its recently announced merger with Farmers-Merchants Bank and Trust Company.
Performance Across Brands and Business Lines
Loan growth during the period remained diversified across the Company’s multiple divisions and market offerings. Expansion occurred across the core Merchants & Marine Bank franchise, the Mississippi River Bank division in Louisiana, small business loans originated and retained through Voyager Lending, and in mortgage portfolio products offered by Canvas Mortgage. This balanced composition reflects the Company’s multi-brand operating model, which allows for growth across varied customer segments within the Gulf South region.
Interest income for the first nine months of 2025 totaled $33.83 million, an increase from $29.66 million during the same period the year before. This 7.50% rise was driven in part by the balance sheet strategy implemented earlier in the year, as well as continued improvement in loan yields as existing loans matured and repriced at higher rates. Despite a rising interest rate environment, the company has retained one of the lowest funding cost profiles in the regional banking industry. Its cost of funds during the third quarter was 1.13%, well below industry averages. The increase from 66 basis points in the prior year was largely attributable to the temporary Federal Home Loan Bank borrowings supporting the HECM securities strategy. Importantly, the company’s cost of interest-bearing deposits remained exceptionally low at just 46 basis points for the first nine months of 2025.
Credit quality remained stable during the quarter despite a challenging macroeconomic environment influenced by elevated interest rates, ongoing uncertainty in U.S. fiscal policy, global trade tensions, and persistent inflationary pressure. Loans past due 30–89 days totaled 0.77% of total loans at quarter end, improving from 1.09% in the prior-year period. Non-accrual loans represented 1.59% of the loan portfolio compared to 1.09% the previous year. Management explained that the increase in nonaccruals resulted from proactive efforts to resolve a small number of problem loans and does not indicate broader deterioration in credit quality. The company continues to monitor economic conditions closely, noting that additional loan loss provisions may be necessary if uncertainty persists.
The company’s securities portfolio recorded an Accumulated Other Comprehensive Income (AOCI) mark-to-market loss of $7.77 million at quarter-end, compared to a loss of $6.62 million one year ago. These losses represent 2.30% and 4.24% of the total securities portfolio, respectively, and remain more favorable than the averages seen across the banking industry.
Strategic Preparation for Merger and Future Growth
Chief Financial Officer Casey Hill noted that ongoing operational investments during 2025 were made in anticipation of the company’s upcoming merger with Farmers-Merchants Bank & Trust Company. These investments included technology upgrades and personnel expansion, positioning the combined institution to operate effectively at a larger scale and maintain compliance with enhanced regulatory requirements that apply to banks exceeding $1 billion in assets under the Federal Deposit Insurance Corporation Improvement Act (FDICIA).
“While these investments have temporarily impacted overhead expense and earnings, we believe they are essential for ensuring smooth integration and sustained growth,” Hill said. “We chose to proactively strengthen operational infrastructure rather than face disruption or delays in growth after the merger takes effect. We expect that the combined company’s increased scale and earnings power will offset these short-term expense impacts.”
The previously mentioned HECM securities and Federal Home Loan Bank borrowing strategy was also executed in this context. The strategy enabled the company to supplement earnings with minimal risk while maintaining capital flexibility during the merger planning process.
Positioning for Expanded Regional Presence
Chairman and Chief Executive Officer Clayton Legear highlighted that the company’s performance during the first nine months of the year reflects the strength of its diversified family of brands and the continued trust of customers across the Gulf South.
“Our partnership with Farmers-Merchants Bank & Trust Company will expand our footprint and allow us to welcome another respected community banking institution into our organization,” Legear said. “Their strong presence in the Acadiana region aligns with our values and long-term mission. Entering this next chapter from a position of operational readiness and financial stability allows us to pursue greater growth, diversification, and customer value going forward.”
Company Background
Merchants & Marine Bancorp, Inc. is the holding company for Merchants & Marine Bank, a community bank originally established in 1899 and reorganized in 1932 during the Great Depression. The bank now operates nearly $1 billion in assets, serving customers across Southern Mississippi, Coastal Alabama, and Southern Louisiana. The company operates multiple branded divisions, including Voyager Lending for government-guaranteed commercial credit, Canvas Mortgage for residential mortgage services, CannaFirst Financial for banking services tailored to the medical cannabis industry, and its Community of Resources division offering operational support services.
Source Link: https://www.businesswire.com/
