First Farmers and Merchants Corporation Reports Second Quarter Results
Growth in Net Income of 11% from
Record Loans of
“We reported growth in net income and net interest margin compared to the first quarter of 2024 that benefited from loan growth to a record
Key highlights of First Farmers’ results for the second quarter of 2024 include:
-
Net income decreased 24.8% to
$3.8 million from$5.0 million for the year-earlier quarter. Net income per common share decreased 22.8% to$0.92 from$1.19 in the second quarter of 2023. Net income increased 10.9% from$3.4 million , or$0.82 , per common share, reported in the first quarter of 2024; -
Adjusted net income, which excludes special items, declined 27.7% to
$3.7 million , or$0.90 per common share, compared with$5.1 million , or$1.21 per common share, for the year earlier quarter. Second quarter adjusted net income improved 10.9% from$3.4 million , or$0.80 per common share, reported in the first quarter of 2024 (see “Non-GAAP Financial Measures” section); -
Total loans increased
$36 million , or 14% annualized, to a record$1.054 billion from the first quarter of 2024, and increased$89 million , or 9.2%, compared to the second quarter of 2023; - Net interest margin improved for the second consecutive quarter to 2.48%;
- Efficiency improved to 67.37% compared to 69.72% from the first quarter of 2024;
-
Total non-performing assets declined 8.7% to
$863,000 from the first quarter of 2024; -
Book value per share increased 20.1% to
$30.68 from$25.54 in the second quarter of 2023 and increased 2.5% from$29.92 for the first quarter of 2024; and - Total stock repurchased increased to 55,000 shares, up 119.6%, from the first quarter of 2024, and increased 29.3% from the second quarter of 2023.
“We accelerated stock repurchases during the second quarter based on our confidence in First Farmers’ outlook,” continued Williams. “This was our largest quarterly stock repurchase since 2016. We continued to invest in our future by hiring a high performing three-person treasury management team that will strengthen our core deposit base and enhance services to our business customers. We also added a secondary mortgage operations manager to accelerate our mortgage lending capabilities. First Farmers’ investments in digital banking and lending technology are also improving our operational efficiencies and customer service. We believe these strategic moves will continue to build earnings performance and shareholder value in the future.”
“Our investment portfolio is generating approximately
Second Quarter 2024 Results of Operations
Net income decreased to
Net income for the second quarter of 2024 was up from the sequential first quarter by
For the second quarter of 2024, available-for-sale securities decreased by
For the second quarter of 2024, total shareholders’ equity increased by
Six Months Results
Net income available to common shareholders was
The decline in adjusted net income for the first six months of 2024 was due to a decrease in net interest income of
Asset Quality
Nonperforming assets declined to
Capital Management Initiatives
During the second quarter of 2024, First Farmers repurchased 55,000 shares of the Company’s common stock in the open market and through privately negotiated transactions at an average price of
About
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
|
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
||||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2024 |
|
2023 |
||||||||||
Total non-interest income |
$ |
3,523 |
|
|
$ |
3,262 |
|
$ |
3,483 |
|
|
$ |
7,006 |
|
|
$ |
6,017 |
|
|
Loss on sale of securities |
|
- |
|
|
|
134 |
|
|
- |
|
|
|
- |
|
|
|
317 |
|
|
(Gain) loss on equity securities |
|
- |
|
|
|
- |
|
|
(91 |
) |
|
|
(91 |
) |
|
|
351 |
|
|
Gain on redemption of bank-owned life insurance |
|
(2 |
) |
|
|
- |
|
|
- |
|
|
|
(2 |
) |
|
|
- |
|
|
Gain on disposal of premises and equipment |
|
(98 |
) |
|
|
- |
|
|
- |
|
|
|
(98 |
) |
|
|
(4 |
) |
|
Adjusted non-interest income |
$ |
3,423 |
|
|
$ |
3,396 |
|
$ |
3,392 |
|
|
$ |
6,815 |
|
|
$ |
6,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total non-interest expense |
$ |
9,780 |
|
|
$ |
9,361 |
|
$ |
9,853 |
|
|
$ |
19,633 |
|
|
$ |
19,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income as reported |
$ |
3,790 |
|
|
$ |
5,039 |
|
$ |
3,419 |
|
|
$ |
7,209 |
|
|
$ |
9,051 |
|
|
Total adjustments, net of tax1 |
|
(74 |
) |
|
|
99 |
|
|
(67 |
) |
|
|
(142 |
) |
|
|
491 |
|
|
Adjusted net income |
$ |
3,716 |
|
|
$ |
5,138 |
|
$ |
3,352 |
|
|
$ |
7,067 |
|
|
$ |
9,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share |
$ |
0.92 |
|
|
$ |
1.19 |
|
$ |
0.82 |
|
|
$ |
1.74 |
|
|
$ |
2.13 |
|
|
Total adjustments, net of tax1 |
|
(0.02 |
) |
|
|
0.02 |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
|
|
0.12 |
|
|
Adjusted basic earnings per share |
$ |
0.90 |
|
|
$ |
1.21 |
|
$ |
0.80 |
|
|
$ |
1.70 |
|
|
$ |
2.25 |
|
|
(1) The effective tax rate of 26.1% is used to determine net of tax amounts. |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES
|
|||||||||
|
|
|
(unaudited) |
|
|
||||
|
|
|
|
||||||
|
(dollars in thousands, except per share data) |
|
2024 |
|
2023(1) |
||||
ASSETS |
Cash and due from banks |
|
$ |
26,667 |
|
$ |
22,654 |
|
|
Interest-bearing deposits |
|
2,336 |
|
2,689 |
|
||||
Federal funds sold |
|
28 |
|
117 |
|
||||
Total cash and cash equivalents |
|
29,031 |
|
25,460 |
|
||||
Securities: |
|
|
|
||||||
Available-for-sale |
|
644,451 |
|
692,763 |
|
||||
Held-to-maturity (fair market value |
|
16,169 |
|
15,038 |
|
||||
|
Equity securities |
|
2,214 |
|
|
2,123 |
|
||
Loans held-for-sale |
|
- |
|
470 |
|
||||
Loans, net of deferred fees |
|
1,053,814 |
|
1,018,866 |
|
||||
Allowance for credit losses |
|
(8,064 |
) |
(7,666 |
) |
||||
Net loans |
|
1,045,750 |
|
1,011,200 |
|
||||
Bank premises and equipment, net |
|
29,592 |
|
30,208 |
|
||||
Bank-owned life insurance |
|
36,314 |
|
34,602 |
|
||||
|
|
9,018 |
|
9,018 |
|
||||
|
Deferred tax asset |
|
25,366 |
|
|
24,862 |
|
||
Other assets |
|
16,432 |
|
25,859 |
|
||||
|
TOTAL ASSETS |
|
$ |
1,854,337 |
|
|
$ |
1,871,603 |
|
LIABILITIES |
Deposits: |
|
|
||||||
Noninterest-bearing |
|
$ |
465,712 |
|
$ |
463,858 |
|
||
Interest-bearing |
|
1,058,365 |
|
1,154,706 |
|
||||
Total deposits |
|
1,524,077 |
|
1,618,564 |
|
||||
|
Accounts payable and accrued liabilities |
|
26,559 |
|
|
24,798 |
|
||
|
FRB Bank Term Funding Program borrowings |
|
168,000 |
|
|
104,000 |
|
||
|
FHLB Borrowings |
|
10,000 |
|
|
- |
|
||
|
TOTAL LIABILITIES |
|
1,728,636 |
|
|
1,747,362 |
|
||
SHAREHOLDERS’ EQUITY |
Common stock - |
|
40,941 |
|
41,741 |
|
|||
Retained earnings |
|
146,926 |
|
143,249 |
|
||||
Accumulated other comprehensive loss |
|
(62,261 |
) |
(60,844 |
) |
||||
Total shareholders’ equity attributable to |
|
125,606 |
|
124,146 |
|
||||
Noncontrolling interest - preferred stock of subsidiary |
|
95 |
|
95 |
|
||||
TOTAL SHAREHOLDERS’ EQUITY |
|
125,701 |
|
124,241 |
|
||||
|
|
||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
1,854,337 |
|
|
$ |
1,871,603 |
|
|
|
|
|
||||||
(1) Derived from audited financial statements as of |
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES
|
||||||||||||||||
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||
|
(dollars in thousands, except per share data) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
INTEREST AND DIVIDEND INCOME |
Interest and fees on loans |
$ |
14,160 |
|
$ |
11,959 |
|
|
$ |
28,050 |
|
$ |
23,409 |
|
||
|
Income on investment securities |
|
|
|
|
|||||||||||
|
Taxable interest |
2,134 |
|
2,376 |
|
|
4,301 |
|
4,816 |
|
||||||
Exempt from federal income tax |
436 |
|
448 |
|
|
869 |
|
911 |
|
|||||||
Interest from federal funds sold and other |
245 |
|
237 |
|
|
536 |
|
285 |
|
|||||||
|
Total interest income |
16,975 |
|
15,020 |
|
|
33,756 |
|
29,421 |
|
||||||
INTEREST EXPENSE |
Interest on deposits |
3,976 |
|
2,918 |
|
|
8,300 |
|
4,740 |
|
||||||
|
Interest on other borrowings |
2,048 |
|
5 |
|
|
3,893 |
|
372 |
|
||||||
Total interest expense |
6,024 |
|
2,923 |
|
|
12,193 |
|
5,112 |
|
|||||||
Net interest income |
10,951 |
|
12,097 |
|
|
21,563 |
|
24,309 |
|
|||||||
Provision (credit) for credit losses |
60 |
|
(260 |
) |
|
125 |
|
(260 |
) |
|||||||
|
Net interest income after provision |
10,891 |
|
12,357 |
|
|
21,438 |
|
24,569 |
|
||||||
NON-INTEREST INCOME |
Mortgage banking activities |
18 |
|
35 |
|
|
77 |
|
75 |
|
||||||
|
Wealth management and trust services fees |
1,167 |
|
1,080 |
|
|
2,324 |
|
2,164 |
|
||||||
|
Service fees on deposit accounts |
1,771 |
|
1,841 |
|
|
3,455 |
|
3,572 |
|
||||||
Investment services fee income |
114 |
|
84 |
|
|
215 |
|
189 |
|
|||||||
Earnings on bank-owned life insurance |
154 |
|
129 |
|
|
312 |
|
244 |
|
|||||||
Loss on sale of available-for-sale securities |
- |
|
(134 |
) |
|
- |
|
(317 |
) |
|||||||
|
Gain on disposal of premises and equipment |
98 |
|
- |
|
|
98 |
|
4 |
|
||||||
|
Gain (loss) on equity securities |
- |
|
- |
|
|
91 |
|
(351 |
) |
||||||
|
Gain on redemption of bank-owned life insurance |
2 |
|
- |
|
|
2 |
|
- |
|
||||||
Other non-interest income |
199 |
|
227 |
|
|
432 |
|
437 |
|
|||||||
|
Total non-interest income |
3,523 |
|
3,262 |
|
|
7,006 |
|
6,017 |
|
||||||
NON-INTEREST EXPENSE |
Salaries and employee benefits |
5,599 |
|
5,286 |
|
|
11,222 |
|
10,957 |
|
||||||
|
Net occupancy expense |
561 |
|
622 |
|
|
1,160 |
|
1,311 |
|
||||||
Depreciation expense |
405 |
|
410 |
|
|
811 |
|
822 |
|
|||||||
Data processing expense |
581 |
|
509 |
|
|
1,144 |
|
999 |
|
|||||||
|
Software support and other computer expense |
1,111 |
|
1,032 |
|
|
2,206 |
|
2,070 |
|
||||||
Legal and professional fees |
188 |
|
170 |
|
|
408 |
|
441 |
|
|||||||
Audits and exams expense |
172 |
|
181 |
|
|
359 |
|
367 |
|
|||||||
Advertising and promotions |
210 |
|
249 |
|
|
410 |
|
494 |
|
|||||||
|
222 |
|
226 |
|
|
440 |
|
493 |
|
|||||||
Other non-interest expense |
731 |
|
676 |
|
|
1,473 |
|
1,467 |
|
|||||||
Total non-interest expense |
9,780 |
|
9,361 |
|
|
19,633 |
|
19,421 |
|
|||||||
Income before provision for income taxes |
4,634 |
|
6,258 |
|
|
8,811 |
|
11,165 |
|
|||||||
|
Provision for income taxes |
836 |
|
1,211 |
|
|
1,594 |
|
2,106 |
|
||||||
Net income |
3,798 |
|
5,047 |
|
|
7,217 |
|
9,059 |
|
|||||||
Noncontrolling interest - dividends on preferred stock subsidiary |
8 |
|
8 |
|
|
8 |
|
8 |
|
|||||||
|
Net income available to common shareholders |
$ |
3,790 |
|
$ |
5,039 |
|
|
$ |
7,209 |
|
$ |
9,051 |
|
||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding |
4,127,442 |
|
4,244,359 |
|
|
4,146,840 |
|
4,258,884 |
|
|||||||
|
Earnings per share |
$ |
0.92 |
|
$ |
1.19 |
|
|
$ |
1.74 |
|
$ |
2.13 |
|
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES
|
|||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||
(dollars in thousands, except per share data) |
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
||||||||||
Results of Operations: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
$ |
16,975 |
|
|
$ |
16,781 |
|
|
$ |
16,091 |
|
|
$ |
15,240 |
|
|
$ |
15,020 |
|
Interest expense |
6,024 |
|
|
6,169 |
|
|
6,048 |
|
|
5,237 |
|
|
2,923 |
|
|||||
Net interest income |
10,951 |
|
|
10,612 |
|
|
10,043 |
|
|
10,003 |
|
|
12,097 |
|
|||||
Provision (credit) for credit losses |
60 |
|
|
65 |
|
|
(230 |
) |
|
- |
|
|
(260 |
) |
|||||
Non-interest income |
3,523 |
|
|
3,483 |
|
|
3,685 |
|
|
3,497 |
|
|
3,262 |
|
|||||
Non-interest expense and non-controlling interest – preferred stock of subsidiary |
9,788 |
|
|
9,853 |
|
|
9,677 |
|
|
9,487 |
|
|
9,369 |
|
|||||
Income before income taxes |
4,626 |
|
|
4,177 |
|
|
4,281 |
|
|
4,013 |
|
|
6,250 |
|
|||||
Income taxes |
836 |
|
|
758 |
|
|
622 |
|
|
675 |
|
|
1,211 |
|
|||||
Net income for common shareholders |
$ |
3,790 |
|
|
$ |
3,419 |
|
|
$ |
3,659 |
|
|
$ |
3,338 |
|
|
$ |
5,039 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share |
$ |
0.92 |
|
|
$ |
0.82 |
|
|
$ |
0.88 |
|
|
$ |
0.79 |
|
|
$ |
1.19 |
|
Book value per share |
$ |
30.68 |
|
|
$ |
29.92 |
|
|
$ |
29.74 |
|
|
$ |
23.61 |
|
|
$ |
25.54 |
|
Weighted average shares outstanding per quarter |
4,127,442 |
|
|
4,166,834 |
|
|
4,174,283 |
|
|
4,206,805 |
|
|
4,244,359 |
|
|||||
Financial Condition Data and Ratios: |
|
|
|
|
|
|
|
|
|
||||||||||
Total securities |
$ |
662,834 |
|
|
$ |
686,795 |
|
|
$ |
709,924 |
|
|
$ |
713,707 |
|
|
$ |
762,175 |
|
Available-for-sale securities, fair market value |
$ |
644,451 |
|
|
$ |
669,552 |
|
|
$ |
692,763 |
|
|
$ |
696,505 |
|
|
$ |
744,963 |
|
Available-for-sale securities, amortized cost |
$ |
729,602 |
|
|
$ |
755,162 |
|
|
$ |
776,078 |
|
|
$ |
810,959 |
|
|
$ |
845,712 |
|
Loans, net of deferred fees |
$ |
1,053,814 |
|
|
$ |
1,017,677 |
|
|
$ |
1,018,866 |
|
|
$ |
1,004,066 |
|
|
$ |
964,822 |
|
Allowance for credit losses |
$ |
(8,064 |
) |
|
$ |
(7,803 |
) |
|
$ |
(7,666 |
) |
|
$ |
(7,871 |
) |
|
$ |
(8,200 |
) |
Total assets |
$ |
1,854,337 |
|
|
$ |
1,884,126 |
|
|
$ |
1,871,603 |
|
|
$ |
1,868,540 |
|
|
$ |
1,878,675 |
|
Total deposits |
$ |
1,524,077 |
|
|
$ |
1,567,083 |
|
|
$ |
1,618,564 |
|
|
$ |
1,674,673 |
|
|
$ |
1,657,587 |
|
Net interest income, on a fully taxable-equivalent basis |
$ |
11,188 |
|
|
$ |
10,834 |
|
|
$ |
10,268 |
|
|
$ |
10,223 |
|
|
$ |
12,298 |
|
Net interest margin |
2.48 |
% |
|
2.39 |
% |
|
2.21 |
% |
|
2.22 |
% |
|
2.64 |
% |
|||||
Efficiency |
67.37 |
% |
|
69.72 |
% |
|
62.84 |
% |
|
69.17 |
% |
|
58.04 |
% |
|||||
|
|
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Asset Quality Data and Ratios: |
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Total nonperforming assets |
$ |
863 |
|
|
$ |
945 |
|
|
$ |
1,407 |
|
|
$ |
3,109 |
|
|
$ |
803 |
|
Nonperforming assets to total assets |
0.05 |
% |
|
0.05 |
% |
|
0.08 |
% |
|
0.17 |
% |
|
0.04 |
% |
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Allowance for credit losses to total loans |
0.77 |
% |
|
0.77 |
% |
|
0.75 |
% |
|
0.78 |
% |
|
0.85 |
% |
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Net charge-offs to average loans (annualized) |
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240722676382/en/
Chief Financial Officer
(931) 380-8257
Source: