Net Interest Margin expands to 3.61%
Annualized Loan Growth of 9.5%
First Farmers and Merchants Corporation (OTCID: FFMH), the holding company for First Farmers and Merchants Bank, today announced its results for the second quarter of 2026, delivering exceptional financial performance highlighted by 9.5% annualized loan growth, a 22.9% increase in net income, and the milestone achievement of the tenth consecutive quarter of net interest margin expansion.
“Our second quarter performance was defined by strong organic momentum, highlighted by 9.5% annualized loan growth,” stated Brian K. Williams, Chairman and Chief Executive Officer. “We successfully converted a robust pipeline while maintaining disciplined pricing standards to ensure we are winning the right business. This loan performance, coupled with higher replacement yields on our earning assets, drove meaningful expansion in our net interest income.”
Key highlights of First Farmers’ results for the second quarter of 2026 include:
- Net income increased 22.9% to $5.7 million from $4.6 million for the year-earlier quarter. Net income per common share increased 25.2% to $1.44 from $1.15 in the second quarter of 2025. Net income increased 4.0% from $5.5 million, or $1.38, per common share, reported in the first quarter of 2026;
- Total loans increased $24.1 million from the first quarter of 2026, representing a 9.5% annualized growth rate for the period, and increased $32.5 million, or 3.2%, compared to the second quarter of 2025;
- Adjusted net income, which excludes special items, increased 24.5% to $5.5 million, or $1.38 per common share, compared with $4.4 million, or $1.09 per common share, for the year-earlier quarter. Second quarter adjusted net income decreased 0.6% from $5.5 million, or $1.39 per common share, reported in the first quarter of 2026 (see “Non-GAAP Financial Measures” section);
- Wealth management and trust services achieved a record quarterly revenue level of $1.3 million, up 10.2% from the second quarter of 2025;
- Net interest income increased 16.7% to $15.3 million from $13.1 million for the second quarter of 2025 and was up 3.2% from $14.8 million for the first quarter of 2026;
- Net interest margin expanded for the tenth consecutive quarter to 3.61%, representing a 47-basis point increase year-over-year and a 7-basis point increase from the first quarter of 2026, driving record net interest income;
- Core non-interest-bearing deposit balances grew 6.0% from the second quarter of 2025, representing 30% of total deposits; and
- Book value per share increased 2.6% to $45.00 from $43.85 in the first quarter of 2026 and increased 15.3% from $39.02 for the second quarter of 2025.
“We are well positioned for the second half of 2026 as our loan pipeline remains solid, and we are seeing accelerating contribution from our strategic growth initiatives including our entry into the Chattanooga market,” Williams added. “Current earnings performance coupled with strong capital levels supports the expansion of these initiatives while also returning capital to our shareholders.”
“The Company’s continued financial success is rooted in the strength of our deposit mix,” said Jill A. Giles, Chief Financial Officer. “Our core franchise remains remarkably stable, averaging approximately 30%, providing a meaningful funding advantage. Although deposit costs remained relatively flat this quarter, we achieved our tenth consecutive quarter of net interest margin expansion by generating higher yields on the asset side of our balance sheet. This increased earnings power, combined with disciplined expense management, enabled us to maintain a consistently lower efficiency ratio throughout the first half of 2026, while continuing to invest strategically in future growth initiatives.”
“Our diversified revenue streams continue to perform exceptionally well, highlighted by record wealth management and trust revenue driven by new and expanded client relationships and an intentional focus on generational wealth strategies. We are leveraging this strong earnings power to make strategic investments in our future. We added six new producers across our commercial, business banking, and mortgage divisions this quarter, and we are heavily prioritizing investments in digital platform enhancements to elevate the customer banking experience and improve long-term operating efficiency.”
Second Quarter 2026 Results of Operations
|
|
For the three months ended |
|
|
|
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|
|
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||||||||||
($ in thousands, except per share data) |
|
6/30/2026 |
|
3/31/2026 |
|
6/30/2025 |
|
2Q26 vs. 1Q26 |
|
2Q26 vs. 2Q25 |
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|
|
|
|
|
|
|
|
Change |
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% Change |
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Change |
|
% Change |
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Interest income |
|
$ |
18,028 |
|
$ |
17,569 |
|
$ |
16,598 |
|
$ |
459 |
|
2.6% |
|
$ |
1,430 |
|
8.6% |
|
Interest expense |
|
|
2,778 |
|
|
2,799 |
|
|
3,529 |
|
|
(21) |
|
(0.8%) |
|
|
(751) |
|
(21.3%) |
|
Net interest income |
|
$ |
15,250 |
|
$ |
14,770 |
|
$ |
13,069 |
|
$ |
480 |
|
3.2% |
|
$ |
2,181 |
|
16.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income, FTE |
|
$ |
15,388 |
|
$ |
14,916 |
|
$ |
13,201 |
|
$ |
472 |
|
3.2% |
|
$ |
2,187 |
|
16.6% |
|
Net interest margin |
|
|
3.61% |
|
|
3.54% |
|
|
3.14% |
|
+7 bps |
|
|
|
+47 bps |
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|
|||
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|
|
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|
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|
|
|
|
|
|
|
|
||||||
Provision for credit losses |
$ |
120 |
|
$ |
60 |
|
$ |
- |
|
$ |
60 |
|
100.0% |
|
$ |
120 |
|
NM |
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|
|
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|
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|
|
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|
|
|
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|
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Total non-interest income |
|
$ |
3,793 |
|
$ |
3,297 |
|
$ |
3,655 |
|
$ |
496 |
|
15.0% |
|
$ |
138 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total non-interest expense |
|
$ |
11,857 |
|
$ |
11,251 |
|
$ |
11,045 |
|
$ |
606 |
|
5.4% |
|
$ |
812 |
|
7.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income for common shareholders |
|
$ |
5,682 |
|
$ |
5,462 |
|
$ |
4,625 |
|
$ |
220 |
|
4.0% |
|
$ |
1,057 |
|
22.9% |
|
Weighted average shares outstanding - basic |
|
|
3,955,554 |
|
|
3,972,154 |
|
|
4,013,067 |
|
|
(16,600) |
|
(0.4%) |
|
|
(57,513) |
|
(1.4%) |
|
Weighted average shares outstanding – diluted |
|
|
3,961,442 |
|
|
3,978,224 |
|
|
4,020,755 |
|
|
(16,782) |
|
(0.4%) |
|
|
(59,313) |
|
(1.5%) |
|
Basic earnings per share |
|
$ |
1.44 |
|
$ |
1.38 |
|
$ |
1.15 |
|
$ |
0.06 |
|
4.3% |
|
$ |
0.29 |
|
25.2% |
|
Diluted earnings per share |
|
$ |
1.43 |
|
$ |
1.37 |
|
$ |
1.15 |
|
$ |
0.06 |
|
4.4% |
|
$ |
0.28 |
|
24.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Adjusted net income(1) |
|
$ |
5,448 |
|
$ |
5,482 |
|
$ |
4,376 |
|
$ |
(34) |
|
(0.6%) |
|
$ |
1,072 |
|
24.5% |
|
Adjusted basic earnings per share(1) |
|
$ |
1.38 |
|
$ |
1.39 |
|
$ |
1.09 |
|
$ |
(0.01) |
|
(0.7%) |
|
$ |
0.29 |
|
26.6% |
|
Adjusted diluted earnings per share(1) |
|
$ |
1.37 |
|
$ |
1.38 |
|
$ |
1.09 |
|
$ |
(0.01) |
|
(0.7%) |
|
$ |
0.28 |
|
25.7% |
|
(1) See Non-GAAP Financial Measures |
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NM -Not meaningful |
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Net income for the second quarter of 2026 increased by $1.0 million, or 22.9%, compared to the same quarter of 2025. The increase was primarily driven by growth in net interest income, partially offset by higher provision for credit losses expense and increased non-interest expense. Net interest income benefited from growth in average earning assets of $20.0 million, along with increases in investment yields of 43 basis points and loan yields of 17 basis points. In addition, continued repricing of higher-cost deposits and disciplined management of funding costs reduced deposit interest expense. The Company's net interest margin expanded for the tenth consecutive quarter, increasing 47 basis points from the prior year period. This improvement was primarily attributable to higher yields on loans and investment securities, combined with continued easing of deposit cost pressures.
Total non-interest expense increased $812,000, or 7.4%, from the second quarter of 2025, primarily due to a $493,000 increase in salaries and employee benefits expense and a $192,000 increase in software support and technology-related expenses. Non-interest income increased $138,000, driven primarily by record wealth management and trust services performance, with related revenue increasing $141,000 from the year-earlier quarter.
Compared to the first quarter of 2026, net income increased $220,000, or 4.0%. The improvement was driven by higher net interest income and non-interest income, partially offset by increased non-interest expense. Net interest income increased from the sequential first quarter as earning asset yields expanded by 6 basis points. Non-interest income increased $496,000, primarily reflecting a one-time gain on equity securities of $116,000 and a one-time gain on the sale of premises and equipment of $226,000. Non-interest expense increased from the first quarter of 2026, primarily due to a $507,000 increase in salaries and employee benefits expense and a $99,000 increase in software support and other technology-related expenses.
Balance Sheet Trends
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For the three months ended |
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($ in thousands) |
|
6/30/2026 |
|
3/31/2026 |
|
6/30/2025 |
|
2Q26 vs. 1Q26 |
|
2Q26 vs. 2Q25 |
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|
|
|
Change |
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% Change |
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Change |
% Change |
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Total assets |
|
$ |
1,765,024 |
|
$ |
1,796,452 |
|
$ |
1,745,297 |
|
$ |
(31,428) |
|
(1.7%) |
|
$ |
19,374 |
|
1.1% |
Total liabilities |
|
|
1,587,158 |
|
|
1,622,725 |
|
|
1,589,216 |
|
|
(35,567) |
|
(2.2%) |
|
|
(2,058) |
|
(0.1%) |
Total shareholders' equity |
|
|
177,866 |
|
|
173,727 |
|
|
156,081 |
|
|
4,139 |
|
2.4% |
|
|
21,785 |
|
14.0% |
Securities |
|
|
581,799 |
|
|
603,287 |
|
|
589,905 |
|
|
(21,508) |
|
(3.6%) |
|
|
(8,126) |
|
(1.4%) |
Loans, net of deferred fees |
|
|
1,036,817 |
|
|
1,012,674 |
|
|
1,004,340 |
|
|
24,143 |
|
2.4% |
|
|
32,477 |
|
3.2% |
Deposits |
|
|
1,565,049 |
|
|
1,601,309 |
|
|
1,566,383 |
|
|
(36,260) |
|
(2.3%) |
|
|
(1,334) |
|
|
Borrowings |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
0.0% |
|
|
- |
|
0.0% |
Investment securities decreased by $21.5 million from the sequential first quarter of 2026 to $581.8 million, representing 33.0% of total assets. Compared to the second quarter of 2025, investment securities declined $8.1 million from $589.9 million, or 33.6% of total assets. Outstanding loan balances increased $24.1 million during the quarter to $1.037 billion, reflecting a strong annualized growth rate of 9.5%. Compared to the second quarter of 2025, loans grew $32.5 million, or 3.2%. The Company achieved strong loan growth during the quarter and remains encouraged by its lending pipeline, positioning it well for continued growth in future periods.
Total deposits decreased $36.3 million, or 2.3%, from the sequential first quarter to $1.565 billion and decreased $1.3 million, or 0.1%, from the second quarter of 2025. The decrease in deposits compared to the sequential quarter represented typical seasonality with municipal deposits declining to $9.0 million and interest-bearing core deposit balances decreasing $20.1 million. The decrease in total deposits of $1.3 million compared to the second quarter of 2025 was driven by a decrease in brokered deposits of $22.2 million and surge deposits of $21.7 million, offset in part by increases of $17.7 million in core deposits, $8.1 million in municipal deposits, and $16.6 million in other commercial deposits.
The Company had no outstanding borrowings as of June 30, 2026, March 31, 2026, and June 30, 2025, respectively. The stability of the Company’s core deposits reduced its dependency on non-core funding during the second quarter of 2026, first quarter of 2026, and second quarter of 2025.
For the second quarter of 2026, total shareholders’ equity increased by $4.1 million from the sequential first quarter to $177.9 million and grew $21.8 million from the second quarter of 2025. The increase in total shareholders’ equity from the first quarter of 2026 was primarily driven by net income of $5.7 million, offset in part by dividends paid of $1.1 million and stock repurchases of $509,000. The AOCI headwind continues to lessen as the bank successfully amortizes seasoned fixed income investments while reinvesting at higher current market yields, resulting in a minimal unrealized loss adjustment of just $160,000, net of tax, for the second quarter. The book value per share improved 2.6% from the sequential first quarter to $45.00 and increased 15.3% compared to the second quarter of 2025, reflecting the tangible shareholder value created by the Company’s disciplined balance sheet strategy.
Asset Quality
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For the three months ended |
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|
|
|
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|||||||||
($ in thousands) |
6/30/2026 |
|
3/31/2026 |
|
6/30/2025 |
|
2Q26 vs. 1Q26 |
|
2Q26 vs. 2Q25 |
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|
|
|
|
|
|
|
Change |
|
% Change |
|
Change |
|
% Change |
|||||
Allowance for credit losses to total loans |
|
0.79% |
|
|
0.79% |
|
|
0.82% |
|
0 bps |
|
|
|
-3 bps |
|
|
||
Provision for credit losses |
$ |
120 |
|
$ |
60 |
|
$ |
- |
|
$ |
60 |
|
100.0% |
|
$ |
120 |
|
NM |
Net charge-offs to average loans, annualized |
|
0.01% |
|
|
0.01% |
|
|
0.00% |
|
0 bps |
|
|
|
+1 bps |
|
|
||
Total non-performing loans to total loans |
|
0.12% |
|
|
0.13% |
|
|
0.13% |
|
-1 bps |
|
|
|
-1 bps |
|
|
||
Total non-performing loans |
$ |
1,271 |
|
$ |
1,332 |
|
$ |
1,281 |
|
$ |
(61) |
|
(4.6%) |
|
$ |
(10) |
|
(0.78%) |
Total non-performing assets |
$ |
1,441 |
|
$ |
1,527 |
|
$ |
1,319 |
|
$ |
(86) |
|
(5.6%) |
|
$ |
122 |
|
9.2% |
NM – Not meaningful |
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The Company’s asset quality metrics remained strong and stable during the quarter, reflecting a continued prudent approach to credit risk management in the current economic environment, and compare favorably to peer group averages. Non-performing loans were $1.3 million, or 0.12% of total loans, flat from $1.3 million, or 0.13% of total loans, from the sequential first quarter of 2026 and $1.3 million, or 0.13% of total loans, from the second quarter of 2025. Net charge-offs to average loans were 0.01% for the second quarter of 2026 compared with net charge-offs to average loans of 0.01% for the sequential quarter and net charge-offs of 0.00% for the second quarter of 2025. Provision for credit losses expense of $120,000 was recorded to the allowance for credit losses for loans during the second quarter of 2026, which was primarily driven by balance sheet loan growth. The allowance for credit losses represented 0.79% of total loans outstanding for the second quarter of 2026 compared with 0.79% for the sequential first quarter and 0.82% for the second quarter of 2025. The allowance for credit losses for unfunded commitments remained at $725,000, or 0.26% of total unfunded commitments, for the second quarter of 2026 compared with 0.25% for the sequential first quarter of 2026 and increased from $545,000, or 0.23% of total unfunded commitments, for the second quarter of 2025. The Company recorded no provision for credit losses expense for the allowance for credit losses for unfunded commitments in the second quarter of 2026.
Capital Management Initiatives
For the three months ended |
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||||||||||
($ in thousands, except per share data) |
6/30/2026 |
|
3/31/2026 |
|
6/30/2025 |
|
2Q26 vs. 1Q26 |
|
2Q26 vs. 2Q25 |
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|
|
|
|
|
|
|
Change |
|
% Change |
|
Change |
|
% Change |
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Tangible common stockholders' equity to tangible assets |
|
9.61% |
|
|
9.21% |
|
|
8.46% |
|
+40 bps |
|
|
|
+115 bps |
|
|
||
Leverage capital ratio |
|
11.19% |
|
|
10.97% |
|
|
10.54% |
|
+22 bps |
|
|
|
+65 bps |
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|
||
Tier 1 capital ratio |
|
17.56% |
|
|
17.59% |
|
|
17.02% |
|
-3 bps |
|
|
|
+54 bps |
|
|
||
Total Risk-based capital ratio |
|
18.33% |
|
|
18.36% |
|
|
17.80% |
|
-3 bps |
|
|
|
+53 bps |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total shares repurchased |
|
10,246 |
|
|
14,299 |
|
|
25,000 |
|
|
(4,053) |
|
(28.3%) |
|
|
(14,754) |
|
(59.0%) |
Average repurchase price per share |
$ |
49.64 |
|
$ |
49.81 |
|
$ |
38.80 |
|
($ |
0.17) |
|
(0.3%) |
|
$ |
10.84 |
|
27.9% |
First Farmers’ capital ratios remained very strong during the quarter, well above regulatory minimums. With Tier 1 capital of 17.6% and a Total Risk-based capital ratio of 18.3%, the Company maintains exceptional flexibility to fund ongoing strategic growth initiatives while simultaneously returning value to shareholders through cash dividends and our stock repurchase program. During the second quarter of 2026, First Farmers repurchased 10,246 shares of the Company’s common stock in the open market and in privately negotiated transactions at an average price of $49.64 with prices ranging from $48.00 to $54.50 per share in accordance with the Company’s stock repurchase program. Second quarter 2026 stock repurchases decreased 28.3% compared to the sequential first quarter of 2026 and were down 59.0% compared to the year-earlier quarter. Authorization to repurchase approximately 175,455 shares remains under the current program, which is set to expire in December 2026, unless extended or otherwise completed.
Six Months Results
|
|
For the six months ended |
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|
|
|
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($ in thousands, except per share data) |
|
6/30/2026 |
|
6/30/2025 |
|
YTD 2026 vs. YTD 2025 |
|||||
|
|
|
|
|
|
Change |
|
% Change |
|||
Net interest income |
|
$ |
30,020 |
|
$ |
25,701 |
|
$ |
4,319 |
|
16.8% |
Provision for credit losses |
|
|
180 |
|
|
325 |
|
|
(145) |
|
(44.6%) |
Non-interest income |
|
|
7,090 |
|
|
7,137 |
|
|
(47) |
|
(0.7%) |
Non-interest expense |
|
|
23,108 |
|
|
21,485 |
|
|
1,623 |
|
7.6% |
Net income |
|
|
11,144 |
|
|
9,086 |
|
|
2,058 |
|
22.7% |
Basic earnings per share |
|
|
2.81 |
|
|
2.26 |
|
|
0.55 |
|
24.4% |
Adjusted net income(1) |
|
|
10,930 |
|
|
8,550 |
|
|
2,380 |
|
27.8% |
Adjusted basic earnings per share(1) |
|
|
2.76 |
|
|
2.13 |
|
|
0.63 |
|
29.6% |
(1) See Non-GAAP Financial Measures |
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For the six months ending June 30, 2026, First Farmers reported net income of $11.1 million, or $2.81 per share, compared with $9.1 million, or $2.26 per share, in the same period of 2025. The change reflects growth in net interest income, offset in part by increases in non-interest expense. The increase in net interest income was primarily driven by growth in investment yields of 38 basis points and loan yields of 19 basis points. In addition, net interest income benefited from the reduction in interest expense for deposits and borrowings as the balance sheet liability mix improved compared to the year-earlier period. Non-interest expense grew $1.6 million for the six months ended June 30, 2026, driven by strategic investments in personnel, including increases in salaries expense of $719,000, performance-based incentives and benefits of $211,000, as well as core provider and software support expense of $309,000.
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 Tennessee area through 21 locations in seven counties and one production office in Chattanooga. As of June 30, 2026, First Farmers reported total assets of approximately $1.8 billion, total shareholders’ equity of approximately $178 million, and administered trust assets of $7.1 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: gain on sale of premises and equipment, securities gains and losses, gain on redemption of bank-owned life insurance, and write-down of other real estate owned 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 |
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UNAUDITED RECONCILIATION OF NON-GAAP MEASURES PRESENTED IN EARNINGS RELEASE |
||||||||||||||||||
($ in thousands, except per share data) |
||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||
|
June 30, |
|
March 31, |
|
June 30, |
|||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2026 |
|
2025 |
|||||||||
Total non-interest income |
$ |
3,793 |
|
|
$ |
3,655 |
|
|
$ |
3,297 |
|
$ |
7,090 |
|
|
$ |
7,137 |
|
Gain on sale of premises and equipment |
|
(226 |
) |
|
|
(225 |
) |
|
|
- |
|
|
(226 |
) |
|
|
(225 |
) |
Gain on equity securities |
|
(116 |
) |
|
|
(111 |
) |
|
|
- |
|
|
(116 |
) |
|
|
(111 |
) |
Gain on redemption of bank-owned life insurance |
|
- |
|
|
|
(1 |
) |
|
|
- |
|
|
- |
|
|
|
(288 |
) |
Write-down of other real estate owned |
|
25 |
|
|
|
- |
|
|
|
27 |
|
|
52 |
|
|
|
- |
|
Adjusted non-interest income |
$ |
3,476 |
|
|
$ |
3,318 |
|
|
$ |
3,324 |
|
$ |
6,800 |
|
|
$ |
6,513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total non-interest expense |
$ |
11,857 |
|
|
$ |
11,045 |
|
|
$ |
11,251 |
|
$ |
23,108 |
|
|
$ |
21,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income as reported |
$ |
5,682 |
|
|
$ |
4,625 |
|
|
$ |
5,462 |
|
$ |
11,144 |
|
|
$ |
9,086 |
|
Total adjustments, net of tax1 |
|
(234 |
) |
|
|
(249 |
) |
|
|
20 |
|
|
(214 |
) |
|
|
(536 |
) |
Adjusted net income |
$ |
5,448 |
|
|
$ |
4,376 |
|
|
$ |
5,482 |
|
$ |
10,930 |
|
|
$ |
8,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
$ |
1.44 |
|
|
$ |
1.15 |
|
|
$ |
1.38 |
|
$ |
2.81 |
|
|
$ |
2.26 |
|
Total adjustments, net of tax1 |
|
(0.06 |
) |
|
|
(0.06 |
) |
|
|
0.01 |
|
|
(0.05 |
) |
|
|
(0.13 |
) |
Adjusted basic earnings per share |
$ |
1.38 |
|
|
$ |
1.09 |
|
|
$ |
1.39 |
|
$ |
2.76 |
|
|
$ |
2.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share |
$ |
1.43 |
|
|
$ |
1.15 |
|
|
$ |
1.37 |
|
$ |
2.81 |
|
|
$ |
2.25 |
|
Total adjustments, net of tax1 |
|
(0.06 |
) |
|
|
(0.06 |
) |
|
|
0.01 |
|
|
(0.05 |
) |
|
|
(0.13 |
) |
Adjusted diluted earnings per share |
$ |
1.37 |
|
|
$ |
1.09 |
|
|
$ |
1.38 |
|
$ |
2.76 |
|
|
$ |
2.12 |
|
(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) |
|
|
||||||||
|
June 30, |
December 31, |
|||||||||||
|
($ in thousands, except per share data) |
|
2026 |
|
2025(1) |
||||||||
ASSETS |
Cash and due from banks |
|
$ |
28,146 |
|
$ |
22,903 |
|
|||||
Interest-bearing deposits |
|
20,381 |
|
79,477 |
|
||||||||
Federal funds sold |
|
101 |
|
80 |
|
||||||||
Total cash and cash equivalents |
|
48,628 |
|
102,460 |
|
||||||||
Securities: |
|
|
|
||||||||||
Available-for-sale |
|
556,040 |
|
556,275 |
|
||||||||
Held-to-maturity (fair market value $22,849 and $23,383) |
|
23,310 |
|
23,678 |
|
||||||||
|
Equity securities |
|
2,429 |
|
|
2,314 |
|
||||||
|
Loans held-for-sale |
|
1,425 |
|
|
887 |
|
||||||
Loans, net of deferred fees |
|
1,036,817 |
|
1,005,688 |
|
||||||||
Allowance for credit losses |
|
(8,150 |
) |
(8,037 |
) |
||||||||
Net loans |
|
1,028,667 |
|
997,651 |
|
||||||||
Bank premises and equipment, net |
|
26,325 |
|
28,803 |
|
||||||||
Bank-owned life insurance |
|
38,217 |
|
36,129 |
|
||||||||
Goodwill |
|
9,018 |
|
9,018 |
|
||||||||
|
Deferred tax asset |
|
15,188 |
|
|
14,691 |
|
||||||
Other assets |
|
15,777 |
|
16,067 |
|
||||||||
|
TOTAL ASSETS |
|
$ |
1,765,024 |
|
|
$ |
1,787,973 |
|
||||
LIABILITIES |
Deposits: |
|
|
||||||||||
Noninterest-bearing |
|
$ |
482,904 |
|
$ |
484,552 |
|
||||||
Interest-bearing |
|
1,082,145 |
|
1,108,707 |
|
||||||||
Total deposits |
|
1,565,049 |
|
1,593,259 |
|
||||||||
|
Accounts payable and accrued liabilities |
|
22,109 |
|
|
23,091 |
|
||||||
|
TOTAL LIABILITIES |
|
1,587,158 |
|
|
1,616,350 |
|
||||||
SHAREHOLDERS’
|
Common stock - $10 par value per share, 8,000,000 shares authorized; 3,950,811 and 3,972,865 shares issued and outstanding as of the periods presented |
|
|
39,508 |
|
39,729 |
|
||||||
Retained earnings |
|
172,131 |
|
164,267 |
|
||||||||
|
Additional paid-in-capital |
|
177 |
|
|
156 |
|
||||||
Accumulated other comprehensive loss |
|
(34,045 |
) |
(32,624 |
) |
||||||||
Total shareholders’ equity attributable to First Farmers and Merchants Corporation |
|
177,771 |
|
171,528 |
|
||||||||
Noncontrolling interest - preferred stock of subsidiary |
|
95 |
|
95 |
|
||||||||
TOTAL SHAREHOLDERS’ EQUITY |
|
177,866 |
|
171,623 |
|
||||||||
|
|
||||||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
1,765,024 |
|
|
$ |
1,787,973 |
|
||||
|
|||||||||||||
(1) Derived from audited financial statements as of December 31, 2025. |
|||||||||||||
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||
(unaudited) |
||||||||||||||
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
(dollars in thousands, except per share data) |
2026 |
|
2025 |
|
2026 |
|
2025 |
||||||
INTEREST AND
|
Interest and fees on loans |
$ |
14,400 |
|
|
$ |
13,791 |
|
$ |
28,468 |
|
|
$ |
27,268 |
Income on investment securities |
|
|
|
|
||||||||||
|
Taxable interest |
2,782 |
|
|
2,181 |
|
5,270 |
|
|
4,272 |
||||
Exempt from federal income tax |
423 |
|
|
420 |
|
842 |
|
|
850 |
|||||
Interest from federal funds sold and other |
423 |
|
|
206 |
|
1,017 |
|
|
519 |
|||||
|
Total interest income |
18,028 |
|
|
16,598 |
|
35,597 |
|
|
32,909 |
||||
INTEREST
|
Interest on deposits |
2,778 |
|
|
3,464 |
|
5,577 |
|
|
7,101 |
||||
Interest on other borrowings |
- |
|
|
65 |
|
- |
|
|
107 |
|||||
Total interest expense |
2,778 |
|
|
3,529 |
|
5,577 |
|
|
7,208 |
|||||
Net interest income |
15,250 |
|
|
13,069 |
|
30,020 |
|
|
25,701 |
|||||
Provision for credit losses |
120 |
|
|
- |
|
180 |
|
|
325 |
|||||
|
Net interest income after provision |
15,130 |
|
|
13,069 |
|
29,840 |
|
|
25,376 |
||||
NON-INTEREST
|
Mortgage banking activities |
87 |
|
|
21 |
|
187 |
|
|
34 |
||||
Wealth management and trust services fees |
1,322 |
|
|
1,181 |
|
2,586 |
|
|
2,346 |
|||||
|
Service fees on deposit accounts |
1,600 |
|
|
1,610 |
|
3,123 |
|
|
3,144 |
||||
Investment services fee income |
111 |
|
|
143 |
|
201 |
|
|
243 |
|||||
Earnings on bank-owned life insurance |
167 |
|
|
169 |
|
330 |
|
|
343 |
|||||
|
Gain on sale of premises and equipment |
226 |
|
|
225 |
|
226 |
|
|
225 |
||||
|
Gain on equity securities |
116 |
|
|
111 |
|
116 |
|
|
111 |
||||
|
Gain on redemption of bank-owned life insurance |
- |
|
|
1 |
|
- |
|
|
288 |
||||
|
Write-down of other real estate owned |
(25 |
) |
|
- |
|
(52 |
) |
|
- |
||||
Other non-interest income |
189 |
|
|
194 |
|
373 |
|
|
403 |
|||||
|
Total non-interest income |
3,793 |
|
|
3,655 |
|
7,090 |
|
|
7,137 |
||||
NON-INTEREST
|
Salaries and employee benefits |
7,014 |
|
|
6,521 |
|
13,521 |
|
|
12,442 |
||||
Net occupancy expense |
643 |
|
|
571 |
|
1,286 |
|
|
1,206 |
|||||
Depreciation expense |
441 |
|
|
418 |
|
872 |
|
|
821 |
|||||
Data processing expense |
566 |
|
|
613 |
|
1,191 |
|
|
1,231 |
|||||
|
Software support and other computer expense |
1,440 |
|
|
1,248 |
|
2,781 |
|
|
2,472 |
||||
Legal and professional fees |
329 |
|
|
295 |
|
606 |
|
|
533 |
|||||
Audits and exams expense |
162 |
|
|
194 |
|
326 |
|
|
384 |
|||||
Advertising and promotions |
250 |
|
|
206 |
|
524 |
|
|
447 |
|||||
FDIC insurance premium expense |
205 |
|
|
203 |
|
406 |
|
|
403 |
|||||
Other non-interest expense |
799 |
|
|
768 |
|
1,587 |
|
|
1,538 |
|||||
Total non-interest expense |
11,849 |
|
|
11,037 |
|
23,100 |
|
|
21,477 |
|||||
Income before provision for income taxes |
7,074 |
|
|
5,687 |
|
13,830 |
|
|
11,036 |
|||||
|
Provision for income taxes |
1,384 |
|
|
1,054 |
|
2,678 |
|
|
1,942 |
||||
Net income |
5,690 |
|
|
4,633 |
|
11,152 |
|
|
9,094 |
|||||
Noncontrolling interest - dividends on preferred stock subsidiary |
8 |
|
|
8 |
|
8 |
|
|
8 |
|||||
|
Net income available to common shareholders |
$ |
5,682 |
|
|
$ |
4,625 |
|
$ |
11,144 |
|
|
$ |
9,086 |
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic |
3,955,554 |
|
|
4,013,067 |
|
3,963,808 |
|
|
4,024,899 |
|||||
|
Weighted average shares outstanding - diluted |
3,961,442 |
|
|
4,020,755 |
|
3,969,696 |
|
|
4,032,587 |
||||
|
Earnings per share |
$ |
1.44 |
|
|
$ |
1.15 |
|
$ |
2.81 |
|
|
$ |
2.26 |
|
Diluted earnings per share |
$ |
1.43 |
|
|
$ |
1.15 |
|
$ |
2.81 |
|
|
$ |
2.25 |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
For the three months ended |
||||||||||||||||||||
($ in thousands, except per share data) |
6/30/2026 |
|
3/31/2026 |
|
12/31/2025 |
|
9/30/2025 |
|
6/30/2025 |
|||||||||||
Results of Operations: |
|
|
|
|
|
|
|
|
|
|||||||||||
Interest income |
$ |
18,028 |
|
|
$ |
17,569 |
|
|
$ |
17,569 |
|
|
$ |
17,331 |
|
|
$ |
16,598 |
|
|
Interest expense |
2,778 |
|
|
2,799 |
|
|
3,325 |
|
|
3,674 |
|
|
3,529 |
|
||||||
Net interest income |
15,250 |
|
|
14,770 |
|
|
14,244 |
|
|
13,657 |
|
|
13,069 |
|
||||||
Provision for credit losses |
120 |
|
|
60 |
|
|
- |
|
|
- |
|
|
- |
|
||||||
Non-interest income |
3,793 |
|
|
3,297 |
|
|
3,473 |
|
|
3,351 |
|
|
3,655 |
|
||||||
Non-interest expense and non-controlling interest – preferred stock of subsidiary |
11,857 |
|
|
11,251 |
|
|
11,975 |
|
|
11,006 |
|
|
11,045 |
|
||||||
Income before income taxes |
7,066 |
|
|
6,756 |
|
|
5,742 |
|
|
6,002 |
|
|
5,679 |
|
||||||
Income taxes |
1,384 |
|
|
1,294 |
|
|
1,049 |
|
|
1,160 |
|
|
1,054 |
|
||||||
Net income for common shareholders |
$ |
5,682 |
|
|
$ |
5,462 |
|
|
$ |
4,693 |
|
|
$ |
4,842 |
|
|
$ |
4,625 |
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|||||||||||
Basic earnings per share |
$ |
1.44 |
|
|
$ |
1.38 |
|
|
$ |
1.18 |
|
|
$ |
1.21 |
|
|
$ |
1.15 |
|
|
Diluted earnings per share |
$ |
1.43 |
|
|
$ |
1.37 |
|
|
$ |
1.18 |
|
|
$ |
1.21 |
|
|
$ |
1.15 |
|
|
Book value per share |
$ |
45.00 |
|
|
$ |
43.85 |
|
|
$ |
43.17 |
|
|
$ |
41.22 |
|
|
$ |
39.02 |
|
|
Weighted average shares outstanding per quarter - basic |
3,955,554 |
|
|
3,972,154 |
|
|
3,976,190 |
|
|
3,994,144 |
|
|
4,013,067 |
|
||||||
Weighted average shares outstanding per quarter - diluted |
3,961,442 |
|
|
3,978,224 |
|
|
3,983,535 |
|
|
4,001,832 |
|
|
4,020,755 |
|
||||||
Financial Condition Data and Ratios: |
|
|
|
|
|
|
|
|
|
|||||||||||
Total securities |
$ |
581,779 |
|
|
$ |
603,287 |
|
|
$ |
582,267 |
|
|
$ |
580,555 |
|
|
$ |
589,905 |
|
|
Available-for-sale securities, fair market value |
$ |
556,040 |
|
|
$ |
578,222 |
|
|
$ |
556,275 |
|
|
$ |
554,123 |
|
|
$ |
562,764 |
|
|
Available-for-sale securities, amortized cost |
$ |
602,761 |
|
|
$ |
625,103 |
|
|
$ |
601,126 |
|
|
$ |
604,742 |
|
|
$ |
620,335 |
|
|
Loans, net of deferred fees |
$ |
1,036,817 |
|
|
$ |
1,012,674 |
|
|
$ |
1,005,688 |
|
|
$ |
1,015,365 |
|
|
$ |
1,004,340 |
|
|
Allowance for credit losses |
$ |
(8,150 |
) |
|
$ |
(8,025 |
) |
|
$ |
(8,037 |
) |
|
$ |
(8,160 |
) |
|
$ |
(8,196 |
) |
|
Total assets |
$ |
1,765,024 |
|
|
$ |
1,796,452 |
|
|
$ |
1,787,973 |
|
|
$ |
1,745,176 |
|
|
$ |
1,745,297 |
|
|
Total deposits |
$ |
1,565,049 |
|
|
$ |
1,601,309 |
|
|
$ |
1,593,259 |
|
|
$ |
1,558,329 |
|
|
$ |
1,566,383 |
|
|
Net interest income, on a fully taxable-equivalent basis |
$ |
15,388 |
|
|
$ |
14,916 |
|
|
$ |
14,382 |
|
|
$ |
13,803 |
|
|
$ |
13,201 |
|
|
Net interest margin |
3.61 |
% |
|
3.54 |
% |
|
3.37 |
% |
|
3.23 |
% |
|
3.14 |
% |
||||||
Efficiency |
63.10 |
% |
|
61.64 |
% |
|
66.74 |
% |
|
63.73 |
% |
|
66.34 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Asset Quality Data and Ratios: |
|
|
|
|
|
|
|
|
|
|||||||||||
Total non-performing assets |
$ |
1,441 |
|
|
$ |
1,527 |
|
|
$ |
1,795 |
|
|
$ |
1,513 |
|
|
$ |
1,319 |
|
|
Non-performing assets to total assets |
0.08 |
% |
|
0.09 |
% |
|
0.10 |
% |
|
0.09 |
% |
|
0.08 |
% |
||||||
Allowance for credit losses to total loans |
0.79 |
% |
|
0.79 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
0.82 |
% |
||||||
Net charge-offs to average loans (annualized) |
0.01 |
% |
|
0.01 |
% |
|
0.01 |
% |
|
0.01 |
% |
|
0.01 |
% |
||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20260727310455/en/
Contacts
For additional information contact
Jill A. Giles
Chief Financial Officer
(931) 380-8284
