Farmers & Merchants Savings Bank opened for business on July 20, 1925. As of opening day, the bank had amassed assets totaling $299,730.

After J.J. Burbridge's untimely death in 1950, R.E. Tool was named President and was active with the bank until 1983.

In 1971, F&M Bank and First State Bank sponsored an ecological promotion in connection with Manchester’s Annual Ridiculous Day. The banks agreed to pay one cent for every empty pop can presented  that day. 135,222 cans were redeemed before the end of the day.

The new facility was available for drive up and walk up services and provided extended banking hours.

In November of 1978, R.E. Tool sold controlling interest to Cecil W. Dunn and his family. The Dunn family has been involved not only in ownership, but also has taken an active role in the management of the bank. Today, this involvement extends to the third generation of Dunns.

In June of 1994, the Bank purchased the former United Federal Savings Bank in Cedar Rapids from the Resolution Trust Company. The expansion into the Cedar Rapids market proved to be successful. In February of 1998, construction of a new facility began at 4000 First Avenue NE. The new bank building was completed in September 1999 and is a focal point in the Cedar Rapids metropolitan area. Also in 1999, F&M acquired the former First National Bank building located at Second Avenue & First Street SW. This facility became the second full service branch located in Cedar Rapids on April 29, 2002.

F&M Bank expanded into the Anamosa market in November 2004; beginning in a temporary location, and a year later, constructing a permanent facility in downtown Anamosa. Several factors went into the decision to expand, including the geographical location in relation to our existing branches in Cedar Rapids and Manchester, as well as the opportunity for growth in the burgeoning Anamosa area.

In June 2008, the Cedar River engulfed the majority of downtown Cedar Rapids. The F&M Bank branch received substantial damage caused by over nine feet of flood water. A full recovery of the building took over two years.

On December 17, 2010, F&M Bank entered into a purchase and assumption agreement with the FDIC to assume all of the deposits of Community National Bank of Lino Lakes and Vadnais Heights in Minnesota. All employees were retained and played an integral part in the smooth transition. This acquisition was the bank’s first expansion outside of Iowa.

F&M Bank added its seventh location in February 2014 in downtown Monticello, Iowa which was formerly occupied by Bank of the West. This addition is the Bank's second facility in Jones county.