Merchants & Marine Bancorp, Inc. Announces 2025 Financial Results

PASCAGOULA, Miss.–(BUSINESS WIRE)–Merchants & Marine Bancorp, Inc. (OTCQX: MNMB), the parent company of Merchants & Marine Bank, reported net income in the fourth quarter of $973 thousand, or $0.72 per share, compared with earnings of $2.262 million, or $1.70 per share, in the same period of the prior year. Gross income in the fourth quarter of 2025 totaled $14.39 million, an increase of 10.86% from the same quarter in the prior year. Balance sheet footings increased by 31.29% to $941.19 million during the 12 months ended December 31, 2025. Net loans retreated slightly to $445.54 million at December 31, 2025 from $464.36 million at the end of the same period in the prior year, a decrease of 4.05%. Total deposits increased 4.32% from the same period in the prior year, from $573.53 million to $598.28 million. Balance sheet growth, and the significant increase in interest expense related to borrowings resulted from a temporary balance sheet strategy employed in the second quarter. This strategy consisted of match-funding $200 million in variable rate Ginnie Mae guaranteed Home Equity Conversion Mortgage (HECM) mortgage-backed securities with monthly-repricing borrowings from the Federal Home Loan Bank of Dallas. This allowed the company to garner approximately an 80 basis points spread with virtually zero interest rate risk and no credit risk. Management intends to liquidate some or all of this position upon its merger with Farmers-Merchants Bank and Trust Company, which was announced during the fourth quarter of 2025.

Selected financial highlights:

• Net loans declined by $18.82 million, or 4.05%, from December 31, 2024. The bulk of this was due to the planned payoff of two large transactional loans in the Mississippi River Bank brand.
• Interest income for the year totaled $46.14 million, compared to $39.58 million in 2024. The 23.96% increase is a result of increased interest on securities as a part of the previously mentioned balance sheet strategy, as well as continued improvement in overall loan yields through repricing of maturing loans in our banking brands.
• The company’s cost of deposits remains exceptionally low, totaling 0.49% during the fourth quarter, significantly below industry averages. Furthermore, the company saw deposit growth of $24.75 million, or 4.32%, during 2026. While overall cost of funds increased to 1.26% from 0.58% in the same period in the prior year, this increase is almost exclusively linked to the variable rate Federal Home Loan Bank borrowings that are funding the previously mentioned balance sheet strategy.
• Credit quality remained strong at year end. The ratio of loans past due 30-89 days totaled 0.87% of total loans at the end 2025, compared to 1.13% at the end of 2024.
• Accumulated Other Comprehensive Income (AOCI) mark-to-market losses in the securities portfolio decreased 29.05% to ($6.58 million) at the end of 2025 from ($9.27 million) at the end of 2024. This is especially significant given the previously mentioned balance sheet strategy, which more than doubled the company’s securities portfolio during 2026.

“Top line performance continues to increase substantially, due to continued gains in loan yields along with growth in very low-interest deposits, and partially due to our HECM match-funded bond strategy,” remarked Casey Hill, the company’s Chief Financial Officer. He continued “While revenues saw significant improvement, keeping with the trends of recent years, those gains did not translate to our bottom line due to operational preparation and legal expenses associated with our pending acquisition of Farmers-Merchants Bank & Trust. However, upon consummation of that merger in the early second quarter of 2026, we expect to realize significant efficiencies and materially higher net income. FM Bank is already a very strong earner, and we will benefit from being able to more fully leverage operational capacities we’ve built in anticipation of growth across a larger base. We very much look forward to considerable positive movement in the shareholder value that will be created by the addition of the newest member of our Family of Brands.”

In the second quarter of the year, the company employed a carefully constructed balance sheet strategy to supplement earnings without taking on additional interest rate of credit risk, and without requiring additional capital. This was done by purchasing $200 million in floating rate Ginnie Mae guaranteed HECM Mortgage-Backed Securities. Those securities are variable rate and reprice at the beginning of each month. These securities were match funded with an equivalent amount of Federal Home Loan Bank advances, which are refunded monthly as the securities reprice. Management believes this structure virtually eliminates any interest rate risk, while the explicit payment guarantee of Ginnie Mae eliminates any credit risk. The net yield on the strategy is roughly 80 basis points.

“In addition to the upcoming merger, there were several other bright spots worth mentioning in the fourth quarter. Net income in the most recent quarter was the strongest of the year, with income continuing to accelerate as our ancillary brands, particularly Canvas Mortgage and Voyager Lending. Both have healthy pipelines and are pushing toward a framework that is not only profitable, but scalable as we continue adding to our Family of Brands. Indeed, 2026 is shaping up to be a very transformative year for our company, and one that we have been intentionally structuring around for quite some time,” Hill said.

“We have been intentional in using the strength of our balance sheet to build capacity for sustainable growth across our Family of Brands. That position of strength reflects the discipline and talent of our bankers and support teams, who have built low-cost funding, strong credit quality, and scalable infrastructure. As a result, we are now able to approach expanding our Family of Brands through mergers and acquisitions as a disciplined, repeatable line of business — pairing organic momentum with strategic expansion – like our partnership with FM Bank – to create long-term value for our shareholders and the communities we serve,” remarked Clayton Legear, President & CEO of the company.

Merchants & Marine Bancorp, Inc. (OTCQX: MNMB) is the parent company of Merchants & Marine Bank, a Mississippi chartered community bank serving the Gulf South region. Originally founded in 1899, Merchants & Marine Bank was reborn in 1932 during the middle of the worst economic disaster in the history of the United States: The Great Depression. More than eight decades later, Merchants & Marine Bank has grown from $25,000 to nearly $1 billion in assets. The Bank offers banking services to customers in Southern Mississippi and Coastal Alabama under its legacy Merchants & Marine Bank brand, and in Southern Louisiana through its Mississippi River Bank brand. It offers mortgage financing through its Canvas Mortgage brand, medical cannabis banking through its CannaFirst Financial brand, and access to government-guaranteed credit through its Voyager Lending brand. It provides bank operational, risk, finance, and support services through its Community of Resources bank services brand. For more information on Merchants & Marine Bancorp, Inc., visit https://mandmbank.com/investor-relations

Cautionary Statement Regarding Forward-Looking Statements

This press release contains, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding certain of the Company’s goals and expectations with respect to future events that are subject to various risks and uncertainties, and statements preceded by, followed by, or that include the words “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions. These statements are based upon the current belief and expectations of the Company’s management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control). Factors that could cause actual results to differ materially from management’s projections, forecasts, estimates and expectations include, but are not limited to: (i) the impact on us or our customers of a decline in general economic conditions and any regulatory responses thereto; (ii) slower economic growth rates or potential recession in the United States and our market areas; (iii) the impacts related to or resulting from uncertainty in the banking industry as a whole; (iv) increased competition for deposits among traditional and nontraditional financial services companies, and related changes in deposit customer behavior; (v) the impact of changes in market interest rates, whether due to a continuation of the elevated interest rate environment or further reductions in interest rates and a resulting decline in net interest income; (vi) the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas; (vii) the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Federal Reserve; (viii) changes in unemployment rates in the United States and our market areas; (ix) adverse changes in customer spending, borrowing and savings habits; (x) declines in commercial real estate values and prices; (xi) a deterioration of the credit rating for U.S. long-term sovereign debt or the impact of uncertain or changing political conditions, including federal government shutdowns and uncertainty regarding United States fiscal debt, deficit and budget matters; (xii) cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber-attacks; (xiii) severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events, including as a result of in the policies of the current U.S. presidential administration or Congress; (xiv) the impact of tariffs, sanctions and other trade policies of the U.S. and its global trading counterparts and the resulting impact on the Company and its customers; (xv) the maintenance and development of well-established and valued client relationships and referral source relationships; (xvi) acquisition or loss of key production personnel; (xvii) changes in tax laws; (xviii) the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; (xix) potential costs related to the impacts of climate change; (xx) current or future litigation, regulatory examinations or other legal and/or regulatory actions; (xxi) risks related to the Company’s acquisitions generally, including disruption to current plans and operations; (xxiii) our ability to recognize the expected benefits and synergies of our completed acquisitions; and (xxiv) our ability to successfully complete the conversion of the core data processing systems of acquired banks into the core data processing system of the Bank. These forward-looking statements are based on current information and/or management’s good faith belief as to future events. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. The forward-looking statements are made as of the date of this press release. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made, except as required by law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Available Information

The Company maintains an Internet web site at www.mandmbank.com/investor-relations. The Company makes available, free of charge, on its web site the Company’s annual reports, quarterly earnings reports, and other press releases. In addition, the OTC Markets Group maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company (at www.otcmarkets.com/stock/MNMB/overview).

The Company routinely posts important information for investors on its web site (under www.mandmbank.com and, more specifically, under the Investor Relations tab at www.mandmbank.com/investor-relations). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under the OTC Markets Group OTCQX Rules for U.S. Banks. Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, OTC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this press release.

Member FDIC

Contacts

Casey Hill, CFO

Merchants & Marine Bancorp, Inc.

[email protected]
(228) 934-1307