First Farmers and Merchants (FFMH) 8-K First Farmers and Merchants Corporation Reports Second Quarter Net Income of $2.7 Million, or $0.56 Per Common Share

EXHIBIT 99.1

For additional information contact
Bobby Krimmel
Chief Financial Officer
(931) 380-8257

FIRST FARMERS AND MERCHANTS CORPORATION REPORTS SECOND QUARTER NET INCOME OF $2.7 MILLION, OR $0.56 PER COMMON SHARE

COLUMBIA, Tenn. (July 23, 2015) –First Farmers and Merchants Corporation, (“First Farmers”), the holding company for First Farmers and Merchants Bank (“the Bank”), today announced unaudited financial results for the quarter ending June 30, 2015, showing increases in earnings, loan growth, and net interest income.

Key highlights of First Farmers’results for the second quarter of 2015 include:

• Net income of $2.7 million or $0.56 per common share, up 3% from $2.6 million or $0.53 per common share for the previous quarter, and up 4% from $2.6 million or $0.52 per common share for the year-earlier quarter;

• Loan growth of $10 million or 2% from the previous quarter and $67 million or 11% compared with the year-earlier quarter;

• Deposit growth of $90 million or 9% compared with the year-earlier quarter; and

• A decline in nonperforming assets of $2.7 million or 52% compared with the previous quarter and $8.9 million or 78% compared with the year-earlier quarter.

Commenting on the results, T. Randy Stevens, Chairman and Chief Executive Officer of First Farmers, said “We are pleased to report another solid quarter of earnings per share growth, while at the same time reporting credit quality metrics which demonstrate further improvements in portfolio risks.” Stevens added, “Our continued strategy of expansion into the Williamson and Davidson County markets, while continuing to serve our traditional markets at the highest level, and the hiring of high quality bankers has allowed us to record double-digit year-over-year loan growth.”

Second Quarter 2015 Results of Operations

The $85,000 increase in reported quarterly earnings for the second quarter of 2015 compared with the previous quarter was primarily driven by increased loan volume. The $105,000 increase in reported quarterly earnings for the second quarter of 2015 compared with the year-earlier quarter was primarily driven by increased loan volume and improvement in the corporation’s effective tax rate for income taxes.

For the second quarter of 2015, First Farmers continued to achieve solid loan growth of $10 million or 2% from the previous quarter and advancing $67 million or 11% compared with the year-earlier quarter, driven primarily by increased commercial and residential mortgage lending. While down 1% from the previous quarter, total deposits increased 9% from the year-earlier quarter from $967 million to $1.057 billion.

 

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FFMH Reports Second Quarter 2015 Results

July 23, 2015

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Asset Quality

Total nonperforming assets decreased to $2.5 million, or 0.21% of total assets, compared to $5.2 million, or 0.43% of total assets, for the previous quarter and declined from $11.4 million, or 1.02% of total assets, compared to the year-earlier quarter. Net recoveries to average loans were 0.19% for the second quarter of 2015 compared to 0.01% for the previous quarter and 0.01% for the year-earlier quarter. As a result of continued improvement in credit trends, no provision to the allowance for loan losses was recorded during the second quarter of 2015, which represented 1.25% of total loans outstanding as of June 30, 2015 versus 1.18% for the previous quarter and 1.40% for year-earlier quarter.

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 19 banking locations in eight Middle Tennessee counties. As of June 30, 2015, First Farmers reported total assets of approximately $1.2 billion and total shareholders’equity of approximately $116 million. For more information about First Farmers, visit First Farmers and Merchants Bank on the Web at www.myfirstfarmers.com under the "Our Story" and "Investor Relations" tab.

Cautionary Note Regarding Forward Looking Statements

Except for historical information contained herein, the matters included in this news release and other information in First Farmers’filings with the Securities and Exchange Commission (the “SEC”) may contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts 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. The forward-looking statements contained herein represent the current expectations, plans or forecasts of First Farmers’future results and revenues. First Farmers intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of these safe harbor provisions. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond First Farmers’control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. Investors should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks, discussed under Item 1A. "Risk Factors" of First Farmers’Annual Report on Form 10-K for the year ending December 31, 2014, and in any of First Farmers subsequent filings with the SEC. Further information concerning First Farmers and its business, including additional factors that could materially affect First Farmers’financial results, is included in its other filings with the SEC.

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FFMH Reports Second Quarter 2015 Results

July 23, 2015

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FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			June 30,
			2015		December 31,
	(dollars in thousands, except per share data)	(unaudited)				2014
ASSETS	Cash and due from banks	$	19,704	$		18,511
	Interest-bearing deposits		6,659			10,086
	Federal funds sold		5,000			1,700
	Total cash and cash equivalents		31,363			30,297
	Securities:
	Available-for-sale		420,464			397,886
	Held-to-maturity (fair market value $7,465 and
	$22,263 as of June 30, 2015 and December 31, 2014,
	respectively)		7,410			21,985
	Total securities		427,874			419,871
	Loans, net of deferred fees		685,402			652,052
	Allowance for loan and lease losses		(8,593)			(7,934)
	Net loans		676,809			644,118
	Bank premises and equipment, net		25,824			25,773
	Other real estate owned		-			5
	Bank owned life insurance		26,348			26,176
	Goodwill		9,018			9,018
	Deferred tax asset		4,925			5,097
	Other assets		11,089			10,640
	TOTAL ASSETS	$	1,213,250		$	1,170,995
LIABILITIES	Deposits:
	Noninterest-bearing	$	220,102	$		204,358
	Interest-bearing		836,615			815,597
	Total deposits		1,056,717			1,019,955
	Securities sold under agreements to repurchase		26,406			22,834
	Accounts payable and accrued liabilities		14,602			13,622
	TOTAL LIABILITIES		1,097,725			1,056,411
SHAREHOLDERS'	Common stock - $10 par value per share, 8,000,000 shares
EQUITY	authorized; 4,813,719 and 4,900,576 shares issued
	and outstanding as of June 30, 2015 and
	December 31, 2014, respectively		48,137			49,006
	Retained earnings		69,691			67,609
	Accumulated other comprehensive loss		(2,398)			(2,126)
	TOTAL SHAREHOLDERS' EQUITY BEFORE
	NONCONTROLLING INTEREST - PREFERRED
	STOCK OF SUBSIDIARY		115,430			114,489
	Noncontrolling interest - preferred stock of subsidiary		95			95
	TOTAL SHAREHOLDERS' EQUITY		115,525			114,584
	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,213,250		$	1,170,995

 

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FFMH Reports Second Quarter 2015 Results

July 23, 2015

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FIRST FARMERS AND MERCHANTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands, except per share data)			Three months ended June 30,						Six months ended June 30,
			2015			2014			2015			2014
INTEREST AND	Interest and fees on loans	$	7,621	$		7,006	$		14,789	$		13,942
DIVIDEND	Income on investment securities
INCOME	Taxable interest		1,491			1,407			2,963			2,761
	Exempt from federal income tax		553			610			1,162			1,289
	Dividends		55			80			110			153
	Total interest income		9,720			9,103			19,024			18,145
INTEREST	Interest on deposits		534			607			1,077			1,211
EXPENSE	Interest on other short term borrowings		22			16			45			32
	Total interest expense		556			623			1,122			1,243
	Net interest income		9,164			8,480			17,902			16,902
	Provision for possible loan and lease
	losses		-			-			-			-
	Net interest income after provision		9,164			8,480			17,902			16,902
NONINTEREST	Gain on loans sold		80			59			113			95
INCOME	Trust department income		640			583			1,292			1,253
	Service fees on deposit accounts		1,661			1,644			3,221			3,164
	Brokerage fees		153			118			298			222
	Earnings on bank owned life insurance		99			78			172			189
	Gain on sale of securities		-			502			270			547
	(Loss) gain on foreclosed property		-			(10)			17			(4)
	Other noninterest income		141			117			276			276
	Total noninterest income		2,774			3,091			5,659			5,742
NONINTEREST	Salaries and employee benefits		4,406			4,376			9,047			8,897
EXPENSE	Net occupancy expense		551			476			1,072			943
	Depreciation expense		366			351			737			711
	Data processing expense		622			573			1,224			1,161
	Legal and professional fees		468			200			819			428
	Stationary and office supplies		75			85			161			155
	Advertising and promotions		314			351			596			679
	FDIC insurance premium expense		129			160			279			289
	Other real estate expense		-			44			-			51
	Other noninterest expense		1,620			1,409			2,646			2,809
	Total noninterest expense		8,551			8,025			16,581			16,123
	Income before taxes		3,387			3,546			6,980			6,521
	Provision for income taxes		677			941			1,653			1,654
	Net income before noncontrolling interest -
	dividends on preferred stock of
	subsidiary		2,710			2,605			5,327			4,867
	Noncontrolling interest-dividends on
	preferred stock subsidiary		8			8			8			8
	Net income for common shareholders	$	2,702		$	2,597		$	5,319		$	4,859
	Weighted average shares outstanding		4,853,265			4,977,506			4,875,133			4,997,536
	Earnings per share	$	0.56	$		0.52	$		1.09	$		0.97

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