Record Net Interest Income of $13.7 Million Fuels Strong Profitability
COLUMBIA, Tenn.--(BUSINESS WIRE)--
First Farmers and Merchants Corporation (OTCID: FFMH), the holding company for First Farmers and Merchants Bank, today announced its results for the third quarter of 2025.
“I am incredibly proud of our team for delivering another outstanding quarter,” stated Brian K. Williams, Chairman and Chief Executive Officer of First Farmers. “Their deliberate and thoughtful execution of our balance sheet strategy produced record net interest income and our seventh consecutive quarter of margin expansion, a result that stands out in the current industry environment. This performance positions us for a strong finish to the year. Importantly, we are navigating the broader economic uncertainty from a position of strength, supported by our excellent asset quality, strong capital base, and deep relationships in the robust Middle Tennessee market.”
Key highlights of First Farmers’ results for the third quarter of 2025 include:
- Net income increased 22.6% to $4.8 million from $4.0 million for the year-earlier quarter. Net income per common share increased 24.7% to $1.21 from $0.97 in the third quarter of 2024. On a sequential basis, net income increased 4.7% compared with $4.6 million, or $1.15 per common share, reported in the second quarter of 2025. The strong third quarter contributed to a 28.5% increase in year-to-date basic earnings per share to $3.47 from $2.70 in the prior-year period;
- Adjusted net income, which excludes special items, increased 23.1% to $4.8 million, or $1.21 per common share, compared with $3.9 million, or $0.97 per common share, for the year-earlier quarter. Third quarter adjusted net income increased 10.6% from $4.4 million, or $1.09 per common share, reported in the second quarter of 2025 (see “Non-GAAP Financial Measures” section);
- Net interest income increased 20.3% to a record $13.7 million from $11.4 million for the third quarter of 2024 and was up 4.5% from $13.1 million for the second quarter of 2025;
- Net interest margin expanded for the seventh consecutive quarter to 3.23%;
- Efficiency ratio improved to 63.73% from 66.34% for the second quarter of 2025 and 66.36% for the third quarter of 2024;
- Total loans increased $11.0 million, representing a 4.4% annualized growth rate, from the second quarter of 2025, but declined $15.7 million, or 1.5%, compared to the third quarter of 2024;
- Average core deposits grew $59.0 million, or 4.7% year-over-year, which supported the strategic redemption of all $22.3 million in higher-cost brokered deposits during the quarter; and
- Book value per share increased 15.9% to $41.22 from $35.56 in the third quarter of 2024 and increased 5.6% from $39.02 for the second quarter of 2025.
“Building on the momentum from this quarter, our focus remains on investing in the future for First Farmers,” Williams continued. “We have made strategic additions to our mortgage and business banking production teams this quarter, and we expect to further those efforts as we look for opportunities to expand our reach. By investing in proven talent and returning capital to shareholders through our growing dividend and buyback program, we are creating sustainable, long-term value.”
“Our record net interest income this quarter is a direct result of our focused execution on improving the funding mix,” said Jill A. Giles, Chief Financial Officer for First Farmers. “The continued year-over-year growth in our core deposit franchise was the key to this success, allowing us to strategically exit all remaining higher-cost brokered deposits during the quarter, a key driver of our continued margin expansion.”
“Our disciplined expense management is also taking hold, with non-interest expense stabilizing this quarter. This, combined with our solid revenue growth, drove significant improvement in our efficiency ratio. The result of this strong operational performance is a balance sheet which continues to be defined by excellent asset quality and robust capital ratios, providing us with significant flexibility moving forward,” added Giles.
Third Quarter 2025 Results of Operations |
|
| | For the three months ended | | | | | | | | |
($ in thousands, except per share data) | | 9/30/2025 | | 6/30/2025 | | 9/30/2024 | | 3Q25 vs. 2Q25 | | 3Q25 vs. 3Q24 |
| | | | | | | | Change | | % Change | | Change | | % Change |
Interest income | | $ | 17,331 | | | $ | 16,598 | | | $ | 17,550 | | | $ | 733 | | | 4.4 | % | | $ | (219 | ) | | (1.2 | %) |
Interest expense | | | 3,674 | | | | 3,529 | | | | 6,195 | | | | 145 | | | 4.1 | % | | | (2,521 | ) | | (40.7 | %) |
Net interest income | | $ | 13,657 | | | $ | 13,069 | | | $ | 11,355 | | | $ | 588 | | | 4.5 | % | | $ | 2,302 | | | 20.3 | % |
| | | | | | | | | | | | | | |
Net interest income, FTE | | $ | 13,803 | | | $ | 13,201 | | | $ | 11,612 | | | $ | 602 | | | 4.6 | % | | $ | 2,191 | | | 18.9 | % |
Net interest margin | | | 3.23 | % | | | 3.14 | % | | | 2.55 | % | | +9 bps | | | | +68 bps | | |
| | | | | | | | | | | | | | |
Provision for credit losses | $ | - | | | $ | - | | | $ | - | | | $ | - | | | NM | | | $ | - | | | NM | |
| | | | | | | | | | | | | | |
Total non-interest income | | $ | 3,351 | | | $ | 3,655 | | | $ | 3,428 | | | $ | (304 | ) | | (8.3 | %) | | $ | (77 | ) | | (2.2 | %) |
| | | | | | | | | | | | | | |
Total non-interest expense | | $ | 11,006 | | | $ | 11,045 | | | $ | 9,974 | | | $ | (39 | ) | | (0.4 | %) | | $ | 1,032 | | | 10.3 | % |
| | | | | | | | | | | | | | |
Net income for common shareholders | | $ | 4,842 | | | $ | 4,625 | | | $ | 3,951 | | | $ | 217 | | | 4.7 | % | | $ | 891 | | | 22.6 | % |
Weighted average shares outstanding - basic | | | 3,994,144 | | | | 4,013,067 | | | | 4,087,043 | | | | (18,923 | ) | | (0.5 | %) | | | (92,899 | ) | | (2.3 | %) |
Weighted average shares outstanding - diluted | | | 4,001,832 | | | | 4,020,755 | | | | 4,099,707 | | | | (18,923 | ) | | (0.5 | %) | | | (97,875 | ) | | (2.4 | %) |
Basic earnings per share | | $ | 1.21 | | | $ | 1.15 | | | $ | 0.97 | | | $ | 0.06 | | | 5.2 | % | | $ | 0.24 | | | 24.7 | % |
Diluted earnings per share | | $ | 1.21 | | | $ | 1.15 | | | $ | 0.96 | | | $ | 0.06 | | | 5.2 | % | | $ | 0.25 | | | 26.0 | % |
| | | | | | | | | | | | | | |
Adjusted net income(1) | | $ | 4,842 | | | $ | 4,376 | | | $ | 3,933 | | | $ | 466 | | | 10.6 | % | | $ | 909 | | | 23.1 | % |
Adjusted basic earnings per share(1) | | $ | 1.21 | | | $ | 1.09 | | | $ | 0.97 | | | $ | 0.12 | | | 11.0 | % | | $ | 0.24 | | | 24.7 | % |
Adjusted diluted earnings per share(1) | | $ | 1.21 | | | $ | 1.09 | | | $ | 0.96 | | | $ | 0.12 | | | 11.0 | % | | $ | 0.25 | | | 26.0 | % |
(1) See Non-GAAP Financial Measures |
NM -Not meaningful |
|
Net income for the third quarter of 2025 grew $891,000, or 22.6%, compared to the year-earlier quarter. The increase, primarily driven by a 20.3% increase in net interest income, was offset in part by an increase in total non-interest expense. Growth in net interest income was the direct result of the Company’s deliberate balance sheet management strategy, significantly reducing interest expense by eliminating higher-cost borrowings and improving the Company’s liability mix compared to the year-earlier quarter. The Company’s net interest margin expanded for the seventh consecutive quarter due to the easing of deposit cost pressures and reduced reliance on non-core funding as compared to the third quarter of 2024. Total non-interest expense increased $1.0 million, or 10.3%, compared to the third quarter of 2024 primarily due to an increase in salaries and employee benefits expense of $690,000 and net occupancy expense of $156,000. The increase in salaries and employee benefits expenses was driven by annual salary adjustments, key hires supporting our strategic growth initiatives, and planned investments in performance-based employee incentives and benefits, which correlates with higher earnings and growth in net interest margin as compared to the year-earlier quarter. Non-interest income decreased $77,000, or 2.2%, compared to the prior-year quarter, while adjusted non-interest income declined by $52,000 due to the decline in transaction-based interchange fee income for the third quarter of 2025.
Net income for the third quarter of 2025 was up from the sequential second quarter by $217,000, or 4.7%, driven by continued growth in net interest income, partially offset by a decrease in non-interest income. Net interest income continued its positive trend, increasing from the prior quarter as the net interest margin grew by nine basis points to 3.23%. The decrease in non-interest income compared to the prior quarter’s results was primarily due to one-time revenue during the second quarter of 2025 which included a gain on equity securities of $111,000 and a gain on disposal of premises and equipment of $225,000. Highlighting the Company’s disciplined expense management, the efficiency ratio improved significantly to 63.73% from 66.34% in the prior quarter.
Balance Sheet Trends |
|
| | For the three months ended | | | | | | |
($ in thousands) | | 9/30/2025 | | 6/30/2025 | | 9/30/2024 | | 3Q25 vs. 2Q25 | | 3Q25 vs. 3Q24 |
| | | | | | | | Change | | % Change | | Change | | % Change |
Total assets | | $ | 1,745,176 | | $ | 1,745,297 | | $ | 1,854,791 | | $ | (121 | ) | | 0.0 | % | | $ | (109,615 | ) | | (5.9 | %) |
Total liabilities | | | 1,580,984 | | | 1,589,216 | | | 1,709,839 | | | (8,232 | ) | | (0.5 | %) | | | (128,855 | ) | | (7.5 | %) |
Total shareholders' equity | | | 164,192 | | | 156,081 | | | 144,952 | | | 8,111 | | | 5.2 | % | | | 19,240 | | | 13.3 | % |
Securities | | | 580,555 | | | 589,905 | | | 651,808 | | | (9,350 | ) | | (1.6 | %) | | | (71,253 | ) | | (10.9 | %) |
Loans, net of deferred fees | | | 1,015,365 | | | 1,004,811 | | | 1,031,098 | | | 10,554 | | | 1.1 | % | | | (15,733 | ) | | (1.5 | %) |
Deposits | | | 1,558,329 | | | 1,566,383 | | | 1,603,672 | | | (8,054 | ) | | (0.5 | %) | | | (45,343 | ) | | (2.8 | %) |
Borrowings | | | - | | | - | | | 80,000 | | | - | | | 0.0 | % | | | (80,000 | ) | | (100.0 | %) |
| | | | | | | | | | | | | | | |
For the third quarter of 2025, investment securities decreased by $9.4 million from the sequential second quarter to $581 million, or 33.3% of total assets, and decreased $71.3 million from $652 million, or 35.1% of total assets, from the third quarter of 2024. Despite a continued competitive market for high-quality loans, the Company’s lending team delivered solid organic loan growth during the third quarter, driven primarily by expanding relationships with existing customers. Outstanding loan balances grew $10.6 million, or 1.1%, from the sequential second quarter to $1.015 billion and declined $15.7 million, or 1.5%, from the third quarter of 2024.
Total deposits decreased $8.1 million, or 0.5%, from the sequential second quarter to $1.558 billion, and decreased $45.3 million, or 2.8%, from the third quarter of 2024. The decrease in deposits compared to the sequential quarter was the result of planned runoff of $22.3 million in brokered deposits and $21.7 million in surge deposits, partially offset by continued growth in core deposits of $31.0 million. The year-over-year decrease was driven by the successful execution of this strategy, with a $43.4 million increase in core deposits allowing the Company to strategically exit $85.2 million in higher-cost brokered deposits.
The continued stability and growth of core deposits have allowed the Company to eliminate its dependency on non-core funding sources with no outstanding borrowings as of September 30, 2025. The Company’s outstanding Federal Reserve Bank Term Funding Program (“BTFP”) borrowings as of September 30, 2024, in the amount of $80 million were paid off in the fourth quarter of 2024.
For the third quarter of 2025, total shareholders’ equity increased by $8.1 million from the sequential second quarter to $164.2 million and grew $19.2 million from the third quarter of 2024. The increase in total shareholders’ equity from the second quarter of 2025 was primarily driven by net income of $4.8 million and a positive change of $5.1 million in accumulated other comprehensive income, offset in part by dividends paid of $1.2 million and stock repurchases of $713,000. The positive change in accumulated other comprehensive income resulted from a decrease in the unrealized loss adjustment to the available-for-sale securities portfolio totaling $5.1 million, net of tax. The improvement in the value of the available-for-sale securities portfolio was driven by a decrease in market interest rates coupled with ongoing maturity roll-off of the portfolio compared to the sequential second quarter. The book value per share improved 5.6% from the sequential second quarter to $41.22 and increased 15.9% compared to the third quarter of 2024. This strong growth reflects the tangible value the Company’s balance sheet strategy is creating for shareholders.
Asset Quality |
|
| | For the three months ended | | | | | | | | |
($ in thousands) | | 9/30/2025 | | 6/30/2025 | | 9/30/2024 | | 3Q25 vs. 2Q25 | | 3Q25 vs. 3Q24 |
| | | | | | | | Change | | % Change | | Change | | % Change |
Allowance for credit losses to total loans | | | 0.80 | % | | | 0.82 | % | | | 0.78 | % | | -2 bps | | | | +2 bps | | |
Provision for credit losses | | $ | - | | | $ | - | | | $ | - | | | $ | 0 | | | NM | | | $ | - | | NM | |
Net charge-offs to average loans, annualized | | | 0.01 | % | | | 0.01 | % | | | 0.01 | % | | 0 bps | | | | 0 bps | | |
Total non-performing loans to total loans | | | 0.13 | % | | | 0.13 | % | | | 0.08 | % | | 0 bps | | | | +5 bps | | |
Total non-performing loans | | $ | 1,291 | | | $ | 1,319 | | | $ | 852 | | | $ | (28 | ) | | (2.1 | %) | | $ | 439 | | 51.5 | % |
Total non-performing assets | | $ | 1,513 | | | $ | 1,319 | | | $ | 852 | | | $ | 194 | | | 14.7 | % | | $ | 661 | | 77.6 | % |
NM – Not meaningful |
Non-performing loans were $1.3 million, or 0.13% of total loans, flat from $1.3 million, or 0.13% of total loans, in the sequential second quarter and were up from $852,000, or 0.08% of total loans, compared with the third quarter of 2024. Net charge-offs to average loans were 0.01% for the third quarter of 2025 compared with 0.01% for the sequential quarter and 0.01% for the third quarter of 2024. Provision credit of $5,000 was recorded to the allowance for credit losses for loans during the third quarter of 2025. The allowance for credit losses represented 0.80% of total loans outstanding for the third quarter of 2025 compared with 0.82% for the sequential second quarter and 0.78% for the third quarter of 2024. The allowance for credit losses for unfunded commitments increased to $580,000, or 0.22% of total unfunded commitments, for the third quarter of 2025 compared with 0.23% for the sequential second quarter and decreased from $605,000, or 0.20% of total unfunded commitments, for the third quarter of 2024. Overall, the Company's asset quality metrics remained strong and stable during the quarter, reflecting a continued disciplined approach to credit risk management in the current economic environment.
Capital Management Initiatives |
| | | | | | | | | | |
| | For the three months ended | | | | | | | | |
($ in thousands, except per share data) | | 9/30/2025 | | 6/30/2025 | | 9/30/2024 | | 3Q25 vs. 2Q25 | | 3Q25 vs. 3Q24 |
| | | | | | | | Change | | % Change | | Change | | % Change |
Tangible common stockholders' equity to tangible assets | | | 8.93 | % | | | 8.46 | % | | | 7.36 | % | | +47 bps | | | | +157 bps | | |
Leverage capital ratio | | | 10.68 | % | | | 10.54 | % | | | 9.43 | % | | +14 bps | | | | +125 bps | | |
Tier 1 capital ratio | | | 17.15 | % | | | 17.02 | % | | | 15.69 | % | | +13 bps | | | | +146 bps | | |
Total Risk-based capital ratio | | | 17.92 | % | | | 17.80 | % | | | 16.44 | % | | +12 bps | | | | +148 bps | | |
| | | | | | | | | | | | | | |
Total shares repurchased | | | 16,690 | | | | 25,000 | | | | 22,500 | | | | (8,310 | ) | | (33.2 | %) | | | (5,810 | ) | | (25.8 | %) |
Average repurchase price per share | | $ | 42.82 | | | $ | 38.80 | | | $ | 31.00 | | | $ | 4.02 | | | 10.4 | % | | $ | 11.82 | | | 38.1 | % |
First Farmers’ capital ratios improved compared to the sequential quarter and third quarter of 2024 and remain well above the regulatory minimum guidelines. This robust capital base provides the flexibility to both invest in the strategic growth initiatives outlined previously and return value to shareholders through dividends and the Company’s share repurchase program. During the third quarter of 2025, First Farmers repurchased 16,690 shares of the Company’s common stock in the open market and in privately negotiated transactions at an average price of $42.82 with prices ranging from $40.00 to $44.50 per share in accordance with the Company’s stock repurchase program. Third quarter 2025 stock repurchases decreased 33.2% compared to the sequential second quarter and were down 25.8% compared to the year-earlier quarter. Authorization to repurchase approximately 138,310 shares remains under the current program, which is set to expire in December 2025, unless extended or otherwise completed.
Nine Months Results |
| | | | | | |
| | For the nine months ended | | | | |
($ in thousands, except per share data) | | 9/30/2025 | | 9/30/2024 | | YTD 2025 vs. YTD 2024 |
| | | | | | Change | | % Change |
Net interest income | | $ | 39,358 | | $ | 32,918 | | $ | 6,440 | | 19.6 | % |
Provision for credit losses | | | 325 | | | 125 | | | 200 | | 160.0 | % |
Non-interest income | | | 10,488 | | | 10,434 | | | 54 | | 0.5 | % |
Non-interest expense | | | 32,491 | | | 29,615 | | | 2,876 | | 9.7 | % |
Net income | | | 13,928 | | | 11,160 | | | 2,768 | | 24.8 | % |
Basic earnings per share | | | 3.47 | | | 2.70 | | | 0.77 | | 28.5 | % |
Adjusted net income(1) | | | 13,392 | | | 11,000 | | | 2,392 | | 21.7 | % |
Adjusted basic earnings per share(1) | | | 3.33 | | | 2.66 | | | 0.67 | | 25.2 | % |
(1) See Non-GAAP Financial Measures |
For the nine months ended September 30, 2025, First Farmers reported net income of $13.9 million, or $3.47 per share, compared with $11.2 million, or $2.70 per share, in the same period of 2024. The change reflects growth in net interest income offset in part by increases in provision for credit losses and non-interest expense. The growth in net interest income for the nine months ended September 30, 2025, was attributable to the reduction in interest expense for deposits and borrowings as the balance sheet liability mix improved compared to the year-earlier period. Provision for credit losses increased by $200,000 primarily driven by provision expense of $325,000 recorded in the first quarter of 2025 due to an increase in loans rated for closer monitoring. Non-interest expense grew $2.9 million for the nine months ended September 30, 2025, driven by strategic investments in personnel, including increases in salaries expense of $1.4 million, performance-based incentives and benefits of $757,000, as well as core provider and software support expense of $477,000, and recruitment and other professional services expense of $233,000.
About First Farmers and Merchants Corporation and First Farmers and Merchants Bank
First Farmers and Merchants Corporation is the holding company for First Farmers and Merchants Bank, a community bank serving the Middle Tennessee area through 22 offices in seven Middle Tennessee counties. As of September 30, 2025, First Farmers reported total assets of approximately $1.7 billion, total shareholders’ equity of approximately $164 million, and administered trust assets of $6.7 billion. For more information about First Farmers, visit us on the Web at www.myfirstfarmers.com under “Investor Relations.”
Cautionary Note Regarding Forward Looking Statements
This news release may contain certain “forward-looking statements” that represent First Farmers’ expectations or beliefs concerning future events and often use words or phrases such as “opportunities,” “prospects,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends” or similar expressions. Such forward-looking statements contained herein represent the current expectations, plans or forecast of First Farmers’ and are about matters that are inherently subject to risks and uncertainties. These statements are not guarantees of future results or performance and readers are cautioned to not place undue reliance on them, whether included in this news release or made elsewhere from time to time by First Farmers or on its behalf. First Farmers disclaims any obligation to update such forward-looking statements.
Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. First Farmers management uses non-GAAP financial measures, including: (i) adjusted net income and (ii) adjusted basic earnings per share, in its analysis of the Company’s performance. These non-GAAP financial measures exclude the following from net income: securities gains and losses, gain on redemption of bank-owned life insurance, gain on disposal of premises and equipment, and the income tax effect of adjustments. Management believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company.
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES PRESENTED IN EARNINGS RELEASE |
($ in thousands, except per share data) |
|
| Three Months Ended | | Nine Months Ended |
| September 30, | | June 30, | | September 30, |
| 2025 | | 2024 | | 2025 | | 2025 | | 2024 |
Total non-interest income | $ | 3,351 | | $ | 3,428 | | | $ | 3,655 | | | $ | 10,488 | | | $ | 10,434 | |
Loss on sale of securities | | - | | | 26 | | | | - | | | | - | | | | 26 | |
Gain on equity securities | | - | | | - | | | | (111 | ) | | | (111 | ) | | | (91 | ) |
Gain on redemption of bank-owned life insurance | | - | | | - | | | | (1 | ) | | | (288 | ) | | | (2 | ) |
Gain on disposal of premises and equipment | | - | | | (51 | ) | | | (225 | ) | | | (225 | ) | | | (149 | ) |
Adjusted non-interest income | $ | 3,351 | | $ | 3,403 | | | $ | 3,318 | | | $ | 9,864 | | | $ | 10,218 | |
| | | | | | | | | | | | | | |
Total non-interest expense | $ | 11,006 | | $ | 9,974 | | | $ | 11,045 | | | $ | 32,491 | | | $ | 29,615 | |
| | | | | | | | | | | | | | |
Net income as reported | $ | 4,842 | | $ | 3,951 | | | $ | 4,625 | | | $ | 13,928 | | | $ | 11,160 | |
Total adjustments, net of tax1 | | - | | | (18 | ) | | | (249 | ) | | | (536 | ) | | | (160 | ) |
Adjusted net income | $ | 4,842 | | $ | 3,933 | | | $ | 4,376 | | | $ | 13,392 | | | $ | 11,000 | |
| | | | | | | | | | | | | | |
Basic earnings per share | $ | 1.21 | | $ | 0.97 | | | $ | 1.15 | | | $ | 3.47 | | | $ | 2.70 | |
Total adjustments, net of tax1 | | - | | | - | | | | (0.06 | ) | | | (0.13 | ) | | | (0.04 | ) |
Adjusted basic earnings per share | $ | 1.21 | | $ | 0.97 | | | $ | 1.09 | | | $ | 3.34 | | | $ | 2.66 | |
| | | | | | | | | | | | | | |
Diluted earnings per share | $ | 1.21 | | $ | 0.96 | | | $ | 1.15 | | | $ | 3.46 | | | $ | 2.70 | |
Total adjustments, net of tax1 | | - | | | - | | | | (0.06 | ) | | | (0.13 | ) | | | (0.04 | ) |
Adjusted diluted earnings per share | $ | 1.21 | | $ | 0.96 | | | $ | 1.09 | | | $ | 3.33 | | | $ | 2.66 | |
|
(1) The effective tax rate of 26.1% is used to determine net of tax amounts. |
|
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
| | | (unaudited) | | |
| | | September 30, | | December 31, |
| ($ in thousands, except per share data) | | 2025 | | 2024(1) |
ASSETS | Cash and due from banks | | $ | 25,246 | | | $ | 26,034 | |
| Interest-bearing deposits | | 27,318 | | | 20,493 | |
| Federal funds sold | | 167 | | | 86 | |
| Total cash and cash equivalents | | 52,731 | | | 46,613 | |
| Securities: | | | | |
| Available-for-sale | | 554,123 | | | 588,523 | |
| Held-to-maturity (fair market value $23,707 and $24,014, net of ACL Securities of $9 and $9, respectively) | | 24,143 | | | 24,532 | |
| Equity securities | | 2,289 | | | 2,178 | |
| Loans held-for-sale | | 280 | | | - | |
| Loans, net of deferred fees | | 1,015,365 | | | 998,818 | |
| Allowance for credit losses | | (8,160 | ) | | (7,952 | ) |
| Net loans | | 1,007,205 | | | 990,866 | |
| Bank premises and equipment, net | | 28,622 | | | 29,094 | |
| Bank-owned life insurance | | 35,961 | | | 36,672 | |
| Goodwill | | 9,018 | | | 9,018 | |
| Deferred tax asset | | 16,363 | | | 22,795 | |
| Other assets | | 14,441 | | | 15,020 | |
| TOTAL ASSETS | | $ | 1,745,176 | | | $ | 1,765,311 | |
LIABILITIES | Deposits: | | | | |
| Noninterest-bearing | | $ | 463,023 | | | $ | 482,398 | |
| Interest-bearing | | 1,095,306 | | | 1,121,223 | |
| Total deposits | | 1,558,329 | | | 1,603,621 | |
| Accounts payable and accrued liabilities | | 22,655 | | | 24,017 | |
| TOTAL LIABILITIES | | 1,580,984 | | | 1,627,638 | |
SHAREHOLDERS’
EQUITY | Common stock - $10 par value per share, 8,000,000 shares authorized; 3,980,619 and 4,039,445 shares issued and outstanding as of the periods presented | | 39,806 | | | 40,394 | |
| Retained earnings | | 161,017 | | | 152,268 | |
| Additional paid-in-capital | | 137 | | | 85 | |
| Accumulated other comprehensive loss | | (36,863 | ) | | (55,169 | ) |
| Total shareholders’ equity attributable to First Farmers and Merchants Corporation | | 164,097 | | | 137,578 | |
| Noncontrolling interest - preferred stock of subsidiary | | 95 | | | 95 | |
| TOTAL SHAREHOLDERS’ EQUITY | | 164,192 | | | 137,673 | |
| | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,745,176 | | | $ | 1,765,311 | |
|
(1) Derived from audited financial statements as of December 31, 2024. |
|
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
(unaudited) |
|
| | Three Months
Ended
September 30, | | Nine Months
Ended
September 30, |
| (dollars in thousands, except per share data) | 2025 | | 2024 | | 2025 | | 2024 |
INTEREST AND | Interest and fees on loans | $ | 14,289 | | $ | 14,467 | | | $ | 41,557 | | $ | 42,517 | |
DIVIDEND | Income on investment securities | | | | | | | |
INCOME | Taxable interest | 2,094 | | 2,073 | | | 6,366 | | 6,374 | |
| Exempt from federal income tax | 422 | | 462 | | | 1,272 | | 1,331 | |
| Interest from federal funds sold and other | 526 | | 548 | | | 1,045 | | 1,084 | |
| Total interest income | 17,331 | | 17,550 | | | 50,240 | | 51,306 | |
INTEREST | Interest on deposits | 3,674 | | 4,325 | | | 10,775 | | 12,625 | |
EXPENSE | Interest on other borrowings | - | | 1,870 | | | 107 | | 5,763 | |
| Total interest expense | 3,674 | | 6,195 | | | 10,882 | | 18,388 | |
| Net interest income | 13,657 | | 11,355 | | | 39,358 | | 32,918 | |
| Provision for credit losses | - | | - | | | 325 | | 125 | |
| Net interest income after provision | 13,657 | | 11,355 | | | 39,033 | | 32,793 | |
NON-INTEREST | Mortgage banking activities | 56 | | 45 | | | 90 | | 122 | |
INCOME | Wealth management and trust services fees | 1,190 | | 1,180 | | | 3,536 | | 3,504 | |
| Service fees on deposit accounts | 1,621 | | 1,715 | | | 4,765 | | 5,170 | |
| Investment services fee income | 117 | | 77 | | | 360 | | 292 | |
| Earnings on bank-owned life insurance | 166 | | 177 | | | 509 | | 489 | |
| Gain on disposal of premises and equipment | - | | 51 | | | 225 | | 149 | |
| Loss on sale of available-for-sale securities | - | | (26 | ) | | - | | (26 | ) |
| Gain on equity securities | - | | - | | | 111 | | 91 | |
| Gain on redemption of bank-owned life insurance | - | | - | | | 288 | | 2 | |
| Other non-interest income | 201 | | 209 | | | 604 | | 641 | |
| Total non-interest income | 3,351 | | 3,428 | | | 10,488 | | 10,434 | |
NON-INTEREST | Salaries and employee benefits | 6,379 | | 5,689 | | | 18,821 | | 16,911 | |
EXPENSE | Net occupancy expense | 755 | | 599 | | | 1,961 | | 1,759 | |
| Depreciation expense | 407 | | 410 | | | 1,228 | | 1,221 | |
| Data processing expense | 642 | | 583 | | | 1,873 | | 1,727 | |
| Software support and other computer expense | 1,238 | | 1,173 | | | 3,710 | | 3,379 | |
| Legal and professional fees | 264 | | 180 | | | 797 | | 588 | |
| Audits and exams expense | 198 | | 173 | | | 582 | | 532 | |
| Advertising and promotions | 193 | | 212 | | | 640 | | 622 | |
| FDIC insurance premium expense | 198 | | 255 | | | 601 | | 695 | |
| Other non-interest expense | 732 | | 700 | | | 2,270 | | 2,173 | |
| Total non-interest expense | 11,006 | | 9,974 | | | 32,483 | | 29,607 | |
| Income before provision for income taxes | 6,002 | | 4,809 | | | 17,038 | | 13,620 | |
| Provision for income taxes | 1,160 | | 858 | | | 3,102 | | 2,452 | |
| Net income | 4,842 | | 3,951 | | | 13,936 | | 11,168 | |
| Noncontrolling interest - dividends on preferred stock subsidiary | - | | - | | | 8 | | 8 | |
| Net income available to common shareholders | $ | 4,842 | | $ | 3,951 | | | $ | 13,928 | | $ | 11,160 | |
| | | | | | | | |
| Weighted average shares outstanding - basic | 3,994,144 | | 4,087,043 | | | 4,019,648 | | 4,126,960 | |
| Weighted average shares outstanding - diluted | 4,001,832 | | 4,099,707 | | | 4,027,336 | | 4,139,624 | |
| Earnings per share | $ | 1.21 | | $ | 0.97 | | | $ | 3.47 | | $ | 2.70 | |
| Diluted earnings per share | $ | 1.21 | | $ | 0.96 | | | $ | 3.46 | | $ | 2.70 | |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL HIGHLIGHTS |
(unaudited) |
|
| For the three months ended |
($ in thousands, except per share data) | 9/30/2025 | | 6/30/2025 | | 3/31/2025 | | 12/31/2024 | | 9/30/2024 |
Results of Operations: | | | | | | | | | |
Interest income | $ | 17,331 | | | $ | 16,598 | | | $ | 16,311 | | | $ | 16,825 | | | $ | 17,550 | |
Interest expense | 3,674 | | | 3,529 | | | 3,679 | | | 4,682 | | | 6,195 | |
Net interest income | 13,657 | | | 13,069 | | | 12,632 | | | 12,143 | | | 11,355 | |
Provision (credit) for credit losses | - | | | - | | | 325 | | | (285 | ) | | - | |
Non-interest income | 3,351 | | | 3,655 | | | 3,481 | | | 3,394 | | | 3,428 | |
Non-interest expense and non-controlling interest – preferred stock of subsidiary | 11,006 | | | 11,045 | | | 10,440 | | | 9,982 | | | 9,974 | |
Income before income taxes | 6,002 | | | 5,679 | | | 5,348 | | | 5,840 | | | 4,809 | |
Income taxes | 1,160 | | | 1,054 | | | 887 | | | 965 | | | 858 | |
Net income for common shareholders | $ | 4,842 | | | $ | 4,625 | | | $ | 4,461 | | | $ | 4,875 | | | $ | 3,951 | |
Per Share Data: | | | | | | | | | |
Basic earnings per share | $ | 1.21 | | | $ | 1.15 | | | $ | 1.11 | | | $ | 1.20 | | | $ | 0.97 | |
Diluted earnings per share | $ | 1.21 | | | $ | 1.15 | | | $ | 1.10 | | | $ | 1.20 | | | $ | 0.96 | |
Book value per share | $ | 41.22 | | | $ | 39.02 | | | $ | 36.85 | | | $ | 34.06 | | | $ | 35.56 | |
Weighted average shares outstanding per quarter - basic | 3,994,144 | | | 4,013,067 | | | 4,034,047 | | | 4,055,843 | | | 4,087,043 | |
Weighted average shares outstanding per quarter - diluted | 4,001,832 | | | 4,020,755 | | | 4,042,108 | | | 4,068,164 | | | 4,099,707 | |
Financial Condition Data and Ratios: | | | | | | | | | |
Total securities | $ | 580,555 | | | $ | 589,905 | | | $ | 609,098 | | | $ | 615,233 | | | $ | 651,808 | |
Available-for-sale securities, fair market value | $ | 554,123 | | | $ | 562,764 | | | $ | 581,649 | | | $ | 588,523 | | | $ | 633,734 | |
Available-for-sale securities, amortized cost | $ | 604,742 | | | $ | 620,335 | | | $ | 646,319 | | | $ | 663,980 | | | $ | 695,808 | |
Loans, net of deferred fees | $ | 1,015,365 | | | $ | 1,004,340 | | | $ | 1,003,200 | | | $ | 998,818 | | | $ | 1,031,098 | |
Allowance for credit losses | $ | (8,160 | ) | | $ | (8,196 | ) | | $ | (8,236 | ) | | $ | (7,952 | ) | | $ | (8,049 | ) |
Total assets | $ | 1,745,176 | | | $ | 1,745,297 | | | $ | 1,777,078 | | | $ | 1,765,311 | | | $ | 1,854,791 | |
Total deposits | $ | 1,558,329 | | | $ | 1,566,383 | | | $ | 1,605,898 | | | $ | 1,603,621 | | | $ | 1,603,672 | |
Net interest income, on a fully taxable-equivalent basis | $ | 13,803 | | | $ | 13,201 | | | $ | 12,935 | | | $ | 12,370 | | | $ | 11,612 | |
Net interest margin | 3.23 | % | | 3.14 | % | | 3.02 | % | | 2.82 | % | | 2.55 | % |
Efficiency | 63.73 | % | | 66.34 | % | | 66.74 | % | | 61.20 | % | | 66.36 | % |
| | | | | | | | | |
Asset Quality Data and Ratios: | | | | | | | | | |
Total non-performing assets | $ | 1,513 | | | $ | 1,319 | | | $ | 1,281 | | | $ | 1,344 | | | $ | 852 | |
Non-performing assets to total assets | 0.09 | % | | 0.08 | % | | 0.07 | % | | 0.08 | % | | 0.05 | % |
Allowance for credit losses to total loans | 0.80 | % | | 0.82 | % | | 0.82 | % | | 0.80 | % | | 0.78 | % |
Net charge-offs (recoveries) to average loans (annualized) | 0.01 | % | | 0.01 | % | | 0.00 | % | | (0.01 | %) | | 0.01 | % |
Source: First Farmers and Merchants Corporation