- Key insight: Farmers and Mechanics Federal Savings Bank, which has $116 million of assets, must develop a plan identifying when it expects to become profitable.
- What's at stake: Some 5.1% of U.S. banks were unprofitable last year, but that percentage was substantially higher among mortgage specialists such as Farmers and Mechanics.
- Supporting data: The Bloomfield, Indiana-based bank has racked up more than $4 million in net losses since 2020.
An Indiana community bank that last turned a profit in 2023 has been hit with an enforcement action in connection with its subpar financial performance.
Farmers and Mechanics Federal Savings Bank neither admitted to nor denied various alleged violations, but it consented to the issuance of an order by the Federal Deposit Insurance Corp. and the Indiana Department of Financial Institutions.
The order, announced Friday, requires the Bloomfield, Indiana-based bank to develop a plan spelling out when it expects to become profitable, and identifying strategies for improving and sustaining its profitability.
The four-office, $116 million-asset bank lost $3.45 million in 2024 and $308,000 last year, according to FDIC data. In the first quarter of 2026, it recorded a $55,000 loss.
The consent order also requires Farmers and Mechanics to maintain a total risk-based capital ratio of at least 12%. In 2024, that ratio was 11.67%, and last year it was 11.03%, according to regulatory data.
In addition, the order requires the bank to employ qualified management — and to get prior written approval from its regulators for the hiring of senior executive officers and the appointment of directors.
Joshua Riggins, the bank's president since 2019, did not immediately respond Friday to a request for comment.
Farmers and Mechanics was established as a savings and loan in 1892. It became an Office of the Comptroller of the Currency-regulated bank in 2011, then switched to a state charter in 2017.
Since 2020, the bank has racked up net losses totaling more than $4 million.
More than 200 U.S. banks, or 5.1% of all institutions, were unprofitable in 2025 according to FDIC data.
That percentage was substantially higher — 13.29% — for banks with less than $100 million of assets. But for institutions in the $100 million-$1 billion asset range, the percentage was 4.13%, a bit lower than the industry-wide average.
At Farmers and Mechanics in 2025, one-to-four family residential real estate loans comprised 62% of all net loans and leases — far above the industry average.
Banks classified as mortgage lenders are substantially more likely to be unprofitable than the industry as a whole. Last year, 15.11% of mortgage lenders — defined as institutions whose residential mortgage loans, plus mortgage-backed securities, exceed 50% of their total assets — were unprofitable.
In the Farmers and Merchants consent order, regulators alleged that the bank engaged in unsafe or unsound banking practices, and also that it violated laws or regulations as a result of weaknesses in capital, earnings, management and sensitivity to market risk.
The order requires the bank to address what it describes as "liquidity issues" that were identified in a September 2025 examination report. The bank must also review its staffing in an effort to determine whether it has appropriate personnel to ensure accounting compliance.
