First Farmers and Merchants Corporation Reports Improved Fourth Quarter and 2024 Results
Fourth Quarter Net Income Per Share Rises
Net Interest Income Increases
Book Value Increases
“First Farmers net income rose
“We were impacted by a slowdown in loan demand in the second half of 2024; however, we see an uptick in lending activity as we enter the first quarter of 2025. We remain positive regarding our continued growth in earnings in 2025 based on our current loan pipeline, the strong position of our balance sheet, and improved net interest margin.
“We remain focused on improving our operations to support continued growth. Our balance sheet is positioned to enhance our earnings performance as rates decline in the future. Credit quality remains very strong, and we continue to streamline our operations to enhance efficiency. Our trust services business line reported record earnings again in 2025, and we are building our mortgage banking capabilities in anticipation of future growth opportunities across our footprint. We believe these fundamentals are key to driving earnings growth and building long-term value for First Farmers’ shareholders.”
Key highlights of First Farmers’ results for 2024 include:
-
Net income was
in 2024, consistent with net income of$16.0 million in 2023;$16.0 million -
Net income per share grew
2.6% to for 2024, up from$3.90 in 2023;$3.80 -
Adjusted net income, which excludes special items, decreased
2.0% to , or$15.9 million per common share in 2024, compared with$3.87 , or$16.2 million per common share (see “Non-GAAP Financial Measures” section);$3.84 -
Loans declined
2.0% to from 2023;$999 million -
Average core deposit balances grew by
, or$43.6 million 3.5% from 2023; -
Wealth management and trust services revenue grew to a record
in 2024 with$4.7 million of administered trust assets;$6.2 billion -
Net interest margin improved for the fourth consecutive quarter to
2.82% ; and -
Book value per share increased
14.5% to from$34.06 from the fourth quarter of 2023.$29.74
“The Board of Directors authorized the extension of our stock repurchase program with the addition of 200,000 shares for 2025,” continued Williams. “In addition, we raised the cash dividend by
Commenting on the results, Robert E. Krimmel, Chief Financial Officer of First Farmers, said, “Our strong earnings performance for the fourth quarter was driven by the improvement in net interest income and our net interest margin. Net interest income rose
“We believe our balance sheet is positioned well to grow future earnings in this interest rate environment. Our improved efficiency ratio benefited from the growth in earnings and focus on expense controls.
“We enter 2025 with a strong capital position to continue our strategic growth initiatives. We expect to benefit from our continued investments in our digital platforms and operating software to improve our future operating efficiencies. We are also building out our mortgage operations and recently received approval to sell mortgage loans directly to Freddie Mac. We expect this will enhance our opportunities to grow non-interest income through mortgage loan sales and servicing in the future,” concluded Krimmel.
Fourth Quarter 2024 Results of Operations
Net income increased to
Net interest income after provision increased for the fifth consecutive quarter to
Net income for the fourth quarter of 2024 was up from the sequential third quarter by
For the fourth quarter of 2024, total cash and cash equivalents decreased
Outstanding loan balances decreased
For the fourth quarter of 2024, total shareholders’ equity decreased by
Twelve Months Results
Net income available to common shareholders was
The increase in net interest income was driven by higher interest and fees on loans which were up
Asset Quality
Nonperforming assets increased to
Capital Management Initiatives
During the fourth quarter of 2024, First Farmers repurchased 32,500 shares of the Company’s common stock in the open market and through privately negotiated transactions at an average price of
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 December 31, 2024, First Farmers reported total assets of approximately
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 not to 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 (Dollars in thousands, except per share data) |
||||||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||
|
2024 |
|
2023 |
|
|
2024 |
|
|
2024 |
|
2023 |
|
||||||
Total non-interest income |
$ |
3,394 |
|
$ |
3,685 |
|
|
$ |
3,428 |
|
|
$ |
13,829 |
|
|
$ |
13,200 |
|
Loss on sale of securities |
|
- |
|
|
- |
|
|
|
26 |
|
|
|
26 |
|
|
|
317 |
|
Loss (gain) on equity securities |
|
36 |
|
|
31 |
|
|
|
- |
|
|
|
(55 |
) |
|
|
383 |
|
Gain on redemption of bank-owned life insurance |
|
- |
|
|
(331 |
) |
|
|
- |
|
|
|
(149 |
) |
|
|
(331 |
) |
Gain on disposal of premises and equipment |
|
- |
|
|
(1 |
) |
|
|
(51 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
Adjusted non-interest income |
$ |
3,430 |
|
$ |
3,384 |
|
|
$ |
3,403 |
|
|
$ |
13,649 |
|
|
$ |
13,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total non-interest expense |
$ |
9,982 |
|
$ |
9,677 |
|
|
$ |
9,974 |
|
|
$ |
39,598 |
|
|
$ |
38,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income as reported |
$ |
4,875 |
|
$ |
3,659 |
|
|
$ |
3,951 |
|
|
$ |
16,035 |
|
|
$ |
16,049 |
|
Total adjustments, net of tax1 |
|
27 |
|
|
(309 |
) |
|
|
(18 |
) |
|
|
(134 |
) |
|
|
180 |
|
Adjusted net income |
$ |
4,902 |
|
$ |
3,350 |
|
|
$ |
3,933 |
|
|
$ |
15,901 |
|
|
$ |
16,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
$ |
1.20 |
|
$ |
0.88 |
|
|
$ |
0.97 |
|
|
$ |
3.90 |
|
|
$ |
3.80 |
|
Total adjustments, net of tax1 |
|
0.01 |
|
|
(0.07 |
) |
|
|
- |
|
|
|
(0.03 |
) |
|
|
0.04 |
|
Adjusted basic earnings per share |
$ |
1.21 |
|
$ |
0.81 |
|
|
$ |
0.97 |
|
|
$ |
3.87 |
|
|
$ |
3.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share |
$ |
1.20 |
|
$ |
0.88 |
|
|
$ |
0.96 |
|
|
$ |
3.89 |
|
|
$ |
3.79 |
|
Total adjustments, net of tax1 |
|
0.01 |
|
|
(0.07 |
) |
|
|
- |
|
|
|
(0.03 |
) |
|
|
0.04 |
|
Adjusted diluted earnings per share |
$ |
1.21 |
|
$ |
0.81 |
|
|
$ |
0.96 |
|
|
$ |
3.86 |
|
|
$ |
3.83 |
|
(1) The effective tax rate of |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
|||||||||
|
|
|
(unaudited) |
|
|
||||
|
December 31, |
December 31, |
|||||||
|
(dollars in thousands, except per share data) |
|
2024 |
|
|
2023(1) |
|||
ASSETS |
Cash and due from banks |
|
$ |
26,034 |
|
$ |
22,654 |
|
|
Interest-bearing deposits |
|
20,493 |
|
2,689 |
|
||||
Federal funds sold |
|
86 |
|
117 |
|
||||
Total cash and cash equivalents |
|
46,613 |
|
25,460 |
|
||||
Securities: |
|
|
|
||||||
Available-for-sale |
|
588,523 |
|
692,763 |
|
||||
Held-to-maturity (fair market value |
|
24,532 |
|
15,038 |
|
||||
|
Equity securities |
|
2,178 |
|
|
2,123 |
|
||
Loans held-for-sale |
|
- |
|
470 |
|
||||
Loans, net of deferred fees |
|
998,818 |
|
1,018,866 |
|
||||
Allowance for credit losses |
|
(7,952 |
) |
(7,666 |
) |
||||
Net loans |
|
990,866 |
|
1,011,200 |
|
||||
Bank premises and equipment, net |
|
29,094 |
|
30,208 |
|
||||
Bank-owned life insurance |
|
36,672 |
|
34,602 |
|
||||
Goodwill |
|
9,018 |
|
9,018 |
|
||||
|
Deferred tax asset |
|
22,795 |
|
|
24,862 |
|
||
Other assets |
|
15,020 |
|
25,859 |
|
||||
|
TOTAL ASSETS |
|
$ |
1,765,311 |
|
|
$ |
1,871,603 |
|
LIABILITIES |
Deposits: |
|
|
||||||
Non-interest-bearing |
|
$ |
482,398 |
|
$ |
463,858 |
|
||
Interest-bearing |
|
1,121,223 |
|
1,154,706 |
|
||||
Total deposits |
|
1,603,621 |
|
1,618,564 |
|
||||
|
Accounts payable and accrued liabilities |
|
24,017 |
|
|
24,798 |
|
||
|
Federal Reserve Bank BTFP borrowings |
|
- |
|
|
104,000 |
|
||
|
TOTAL LIABILITIES |
|
1,627,638 |
|
|
1,747,362 |
|
||
SHAREHOLDERS’
|
Common stock - |
40,394 |
|
|
41,741 |
|
|||
|
Additional paid-in capital |
|
85 |
|
|
- |
|
||
Retained earnings |
|
152,268 |
|
143,249 |
|
||||
Accumulated other comprehensive loss |
|
(55,169 |
) |
(60,844 |
) |
||||
Total shareholders’ equity attributable to First Farmers and Merchants Corporation |
|
137,578 |
124,146 |
|
|||||
Noncontrolling interest - preferred stock of subsidiary |
|
95 |
|
95 |
|
||||
TOTAL SHAREHOLDERS’ EQUITY |
|
137,673 |
|
124,241 |
|
||||
|
|
||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
1,765,311 |
|
|
$ |
1,871,603 |
|
|
|
|
|||||||
(1) Derived from audited financial statements as of December 31, 2023. |
|||||||||
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
||||||||||||||||
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||
|
(dollars in thousands, except per share data) |
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
INTEREST AND |
Interest and fees on loans |
$ |
13,900 |
|
|
$ |
13,354 |
|
|
$ |
56,417 |
|
|
$ |
49,180 |
|
DIVIDEND |
Income on investment securities |
|
|
|
|
|||||||||||
INCOME |
Taxable interest |
2,027 |
|
|
2,222 |
|
|
8,401 |
|
|
9,329 |
|
||||
Exempt from federal income tax |
431 |
|
|
433 |
|
|
1,762 |
|
|
1,786 |
|
|||||
Interest from federal funds sold and other |
467 |
|
|
82 |
|
|
1,551 |
|
|
457 |
|
|||||
|
Total interest income |
16,825 |
|
|
16,091 |
|
|
68,131 |
|
|
60,752 |
|
||||
INTEREST |
Interest on deposits |
4,411 |
|
|
5,054 |
|
|
17,037 |
|
|
14,362 |
|
||||
EXPENSE |
Interest on borrowings |
271 |
|
|
994 |
|
|
6,033 |
|
|
2,035 |
|
||||
Total interest expense |
4,682 |
|
|
6,048 |
|
|
23,070 |
|
|
16,397 |
|
|||||
Net interest income |
12,143 |
|
|
10,043 |
|
|
45,061 |
|
|
44,355 |
|
|||||
Provision credit for credit losses |
(285 |
) |
|
(230 |
) |
|
(160 |
) |
|
(490 |
) |
|||||
|
Net interest income after provision |
12,428 |
|
|
10,273 |
|
|
45,221 |
|
|
44,845 |
|
||||
NON-INTEREST |
Mortgage banking activities |
45 |
|
|
26 |
|
|
167 |
|
|
127 |
|
||||
INCOME |
Wealth management and trust services fees |
1,203 |
|
|
1,064 |
|
|
4,707 |
|
|
4,331 |
|
||||
|
Service fees on deposit accounts |
1,711 |
|
|
1,781 |
|
|
6,881 |
|
|
7,170 |
|
||||
Investment services fee income |
100 |
|
|
87 |
|
|
393 |
|
|
366 |
|
|||||
Earnings on bank-owned life insurance (BOLI) |
181 |
|
|
156 |
|
|
670 |
|
|
558 |
|
|||||
Loss on sale of available-for-sale securities |
- |
|
|
- |
|
|
(26 |
) |
|
(317 |
) |
|||||
|
Gain on disposal of premises and equipment |
- |
|
|
1 |
|
|
149 |
|
|
8 |
|
||||
|
(Loss) gain on equity securities |
(36 |
) |
|
(31 |
) |
|
55 |
|
|
(383 |
) |
||||
|
Gain on redemption of BOLI |
- |
|
|
331 |
|
|
2 |
|
|
331 |
|
||||
Other non-interest income |
190 |
|
|
270 |
|
|
831 |
|
|
1,009 |
|
|||||
|
Total non-interest income |
3,394 |
|
|
3,685 |
|
|
13,829 |
|
|
13,200 |
|
||||
NON-INTEREST |
Salaries and employee benefits |
5,400 |
|
|
5,336 |
|
|
22,312 |
|
|
21,581 |
|
||||
EXPENSE |
Net occupancy expense |
559 |
|
|
627 |
|
|
2,318 |
|
|
2,570 |
|
||||
Depreciation expense |
409 |
|
|
441 |
|
|
1,630 |
|
|
1,670 |
|
|||||
Data processing expense |
581 |
|
|
531 |
|
|
2,308 |
|
|
2,066 |
|
|||||
|
Software support and other computer expense |
1,219 |
|
|
1,119 |
|
|
4,598 |
|
|
4,275 |
|
||||
Legal and professional fees |
274 |
|
|
231 |
|
|
862 |
|
|
874 |
|
|||||
Audits and exams expense |
174 |
|
|
181 |
|
|
706 |
|
|
706 |
|
|||||
Advertising and promotions |
324 |
|
|
252 |
|
|
946 |
|
|
1,001 |
|
|||||
FDIC insurance premium expense |
204 |
|
|
239 |
|
|
899 |
|
|
920 |
|
|||||
Other non-interest expense |
830 |
|
|
712 |
|
|
3,003 |
|
|
2,915 |
|
|||||
Total non-interest expense |
9,974 |
|
|
9,669 |
|
|
39,582 |
|
|
38,578 |
|
|||||
Income before provision for income taxes |
5,848 |
|
|
4,289 |
|
|
19,468 |
|
|
19,467 |
|
|||||
|
Provision for income taxes |
965 |
|
|
622 |
|
|
3,417 |
|
|
3,402 |
|
||||
Net income |
4,883 |
|
|
3,667 |
|
|
16,051 |
|
|
16,065 |
|
|||||
Noncontrolling interest - dividends on preferred stock subsidiary |
8 |
|
|
8 |
|
|
16 |
|
|
16 |
|
|||||
|
Net income available to common shareholders |
$ |
4,875 |
|
|
$ |
3,659 |
|
|
$ |
16,035 |
|
|
$ |
16,049 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding - basic |
4,055,843 |
|
|
4,174,283 |
|
|
4,109,510 |
|
|
4,228,232 |
|
|||||
|
Weighted average shares outstanding - diluted |
4,068,164 |
|
|
4,175,998 |
|
|
4,121,831 |
|
|
4,229,947 |
|
||||
|
Earnings per share |
$ |
1.20 |
|
|
$ |
0.88 |
|
|
$ |
3.90 |
|
|
$ |
3.80 |
|
|
Diluted earnings per share |
$ |
1.20 |
|
|
$ |
0.88 |
|
|
$ |
3.89 |
|
|
$ |
3.79 |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) |
|||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||
(dollars in thousands, except per share data) |
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
Results of Operations: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
16,825 |
|
|
$ |
17,550 |
|
|
$ |
16,975 |
|
|
$ |
16,781 |
|
|
$ |
16,091 |
|
Interest expense |
4,682 |
|
|
6,195 |
|
|
6,024 |
|
|
6,169 |
|
|
6,048 |
|
|||||
Net interest income |
12,143 |
|
|
11,355 |
|
|
10,951 |
|
|
10,612 |
|
|
10,043 |
|
|||||
Provision (credit) for credit losses |
(285 |
) |
|
- |
|
|
60 |
|
|
65 |
|
|
(230 |
) |
|||||
Non-interest income |
3,394 |
|
|
3,428 |
|
|
3,523 |
|
|
3,483 |
|
|
3,685 |
|
|||||
Non-interest expense and non-controlling interest – preferred stock of subsidiary |
9,982 |
|
|
9,974 |
|
|
9,788 |
|
|
9,853 |
|
|
9,677 |
|
|||||
Income before income taxes |
5,840 |
|
|
4,809 |
|
|
4,626 |
|
|
4,177 |
|
|
4,281 |
|
|||||
Income taxes |
965 |
|
|
858 |
|
|
836 |
|
|
758 |
|
|
622 |
|
|||||
Net income for common shareholders |
$ |
4,875 |
|
|
$ |
3,951 |
|
|
$ |
3,790 |
|
|
$ |
3,419 |
|
|
$ |
3,659 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share |
$ |
1.20 |
|
|
$ |
0.97 |
|
|
$ |
0.92 |
|
|
$ |
0.82 |
|
|
$ |
0.88 |
|
Diluted earnings per share |
$ |
1.20 |
|
|
$ |
0.96 |
|
|
$ |
0.92 |
|
|
$ |
0.82 |
|
|
$ |
0.88 |
|
Book value per share |
$ |
34.06 |
|
|
$ |
35.56 |
|
|
$ |
30.68 |
|
|
$ |
29.92 |
|
|
$ |
29.74 |
|
Weighted average shares outstanding per quarter - basic |
4,055,843 |
|
|
4,087,043 |
|
|
4,127,442 |
|
|
4,166,834 |
|
|
4,174,283 |
|
|||||
Weighted average shares outstanding per quarter - diluted |
4,068,164 |
|
|
4,099,707 |
|
|
4,140,106 |
|
|
4,177,909 |
|
|
4,175,998 |
|
|||||
Financial Condition Data and Ratios: |
|
|
|
|
|
|
|
|
|
||||||||||
Total securities |
$ |
615,233 |
|
|
$ |
651,808 |
|
|
$ |
662,834 |
|
|
$ |
686,795 |
|
|
$ |
709,924 |
|
Available-for-sale securities, fair market value |
$ |
588,523 |
|
|
$ |
633,734 |
|
|
$ |
644,451 |
|
|
$ |
669,552 |
|
|
$ |
692,763 |
|
Available-for-sale securities, amortized cost |
$ |
663,980 |
|
|
$ |
695,808 |
|
|
$ |
729,602 |
|
|
$ |
755,162 |
|
|
$ |
776,078 |
|
Loans, net of deferred fees |
$ |
998,818 |
|
|
$ |
1,031,098 |
|
|
$ |
1,053,814 |
|
|
$ |
1,017,677 |
|
|
$ |
1,018,866 |
|
Allowance for credit losses |
$ |
(7,952 |
) |
|
$ |
(8,049 |
) |
|
$ |
(8,064 |
) |
|
$ |
(7,803 |
) |
|
$ |
(7,666 |
) |
Total assets |
$ |
1,765,311 |
|
|
$ |
1,854,791 |
|
|
$ |
1,854,337 |
|
|
$ |
1,884,126 |
|
|
$ |
1,871,603 |
|
Total deposits |
$ |
1,603,621 |
|
|
$ |
1,603,672 |
|
|
$ |
1,524,077 |
|
|
$ |
1,567,083 |
|
|
$ |
1,618,564 |
|
Net interest income, on a fully taxable-equivalent basis |
$ |
12,370 |
|
|
$ |
11,612 |
|
|
$ |
11,188 |
|
|
$ |
10,834 |
|
|
$ |
10,268 |
|
Net interest margin |
2.82 |
% |
|
2.55 |
% |
|
2.48 |
% |
|
2.39 |
% |
|
2.21 |
% |
|||||
Efficiency |
61.20 |
% |
|
66.36 |
% |
|
67.37 |
% |
|
69.72 |
% |
|
67.56 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset Quality Data and Ratios: |
|
|
|
|
|
|
|
|
|
||||||||||
Total nonperforming assets |
$ |
1,344 |
|
|
$ |
852 |
|
|
$ |
863 |
|
|
$ |
945 |
|
|
$ |
1,407 |
|
Nonperforming assets to total assets |
0.08 |
% |
|
0.05 |
% |
|
0.05 |
% |
|
0.05 |
% |
|
0.08 |
% |
|||||
Allowance for credit losses to total loans |
0.80 |
% |
|
0.78 |
% |
|
0.77 |
% |
|
0.77 |
% |
|
0.75 |
% |
|||||
Net (recoveries) charge-offs to average loans (annualized) |
(0.01 |
)% |
|
0.01 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250127011689/en/
For additional information contact
Robert E. Krimmel
Chief Financial Officer
(931) 380-8257
Source: First Farmers and Merchants Corporation