SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 27, 2001
FIRST FARMERS AND MERCHANTS CORPORATION
TENNESSEE 0-10972 62-1148660
(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
816 South Garden Street, Columbia, Tennessee 38402-1148
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code:(931)-388-3145
Item 2. Acquisition or Disposition of Assets.
On April 27, 2001, First Farmers and Merchants National Bank, a
national banking association and a wholly owned subsidiary of
First Farmers and Merchants Corporation, acquired all of the
issued and outstanding shares of common stock of Peoples and
Union Bank, a Tennessee banking corporation and a subsidiary of
First Tennessee National Corporation, pursuant to an agreement
and plan of merger dated as of December 18, 2000 (the "agreement").
First Farmers and Merchants National Bank acquired all of the
common stock from First Tennessee Corporation, amounting to
48,000 shares of $10.00 par value common stock, for a negotiated
cash purchased price of $24,956,678. All 48,000 shares of
Peoples and Union Bank shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial statements of business acquired.
1. Financial statements of Peoples and Union
Bank as of December 31, 2000 (audited).
2. Financial statements of Peoples and Union
Bank as of March 31, 2001 (unaudited).
(b) Pro forma financial information.
1. First Farmers and Merchants Corporation and
Subsidiary pro forma condensed consolidated
balance sheet as of December 31, 2000
(unaudited).
2. First Farmers and Merchants Corporation and
Subsidiary pro forma condensed consolidated
statement of income for the year ended
December 31, 2000 (unaudited).
3. First Farmers and Merchants Corporation and
Subsidiary pro forma condensed consolidated
balance sheet as of March 31, 2001
(unaudited).
4. First Farmers and Merchants Corporation and
Subsidiary pro forma condensed consolidated
statement of income for the three months
period ended March 31, 2001 (unaudited).
(c) Exhibit:
1. Agreement and plan of merger dated December 18,
2000, between First Farmers and Merchants
National Bank and First Tennessee National
Corporation.
SIGNATURES
__________
Pursuant to the requirement of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
First Farmers and Merchants Corporation
(Registrant)
Date:__________________ /s/Waymon L. Hickman
_____________________
Chairman of the Board
(Chief Executive Officer)
PEOPLES AND UNION BANK
PRO FORMA CONDENSED BALANCE SHEET
(UNAUDITED)
(Dollars in Thousands)
MARCH 31, 2001
ASSETS
Cash and due from banks $ 3,856
Federal funds sold 5,725
Securities available-for-sale, at fair value 18,639
Securities held-to-maturity, at cost 20,474
Loans, net of allowance for loan losses 110,708
Premises and equipment, net of depreciation 1,224
Other assets 1,635
--------
TOTAL ASSETS $ 162,261
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
Deposits
Noninterest-bearing $ 39,445
Interest-bearing 109,676
--------
Total deposits
149,121
Accounts payable and accrued liabilities 1,683
--------
TOTAL LIABILITIES 150,804
--------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Common stock 480
Additional paid-in capital 480
Retained earnings 10,219
Accumulated other comprehensive loss 278
--------
TOTAL STOCKHOLDER'S EQUITY 11,457
--------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 162,261
========
PEOPLES AND UNION BANK
CONDENSED STATEMENT OF INCOME
(UNAUDITED)
(Dollars in Thousands, except per share data)
FOR THE THREE MONTHS ENDED MARCH 31, 2001
INTEREST INCOME
Interest and fees on loans: $ 2,311
Interest and dividend income on investment
securities:
Taxable 760
Tax-exempt 17
------
777
------
TOTAL INTEREST INCOME 3,088
INTEREST EXPENSE
Interest on deposits 1,799
------
NET INTEREST INCOME 1,289
------
Provision For Loan Losses 20
------
Net Interest Income After Provision For Loan Losses 1,269
------
NONINTEREST INCOME
Service fees on deposit accounts 90
Other service fees and commissions 5
Other operating income 121
------
TOTAL NONINTEREST INCOME 216
------
NONINTEREST EXPENSES
Salaries and employee benefits 363
Net occupancy expense 32
Furniture and equipment expense 24
Other operating expense 154
------
TOTAL NONINTEREST EXPENSES 573
------
INCOME BEFORE PROVISION FOR INCOME TAXES 912
PROVISION FOR INCOME TAXES 310
------
NET INCOME $ 602
======
NET INCOME PER SHARE OF COMMON STOCK $ 12.54
======
FIRST FARMERS AND MERCHANTS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On April 27, 2001, First Farmers and Merchants National Bank, a national
banking association and a wholly owned subsidiary of First Farmers and
Merchants Corporation, acquired all of the issued and outstanding shares
of common stock of Peoples and Union Bank, a Tennessee banking
corporation and a subsidiary of First Tennessee National Corporation,
for a cash purchased price of $24,956,678.
In connection with the acquisition, First Farmers and Merchants National
Bank entered into employment contracts with three key offices of Peoples
and Union Bank.
The acquisition will be accounted for as a purchase, with the assets
acquired and liabilities assumed at fair value, and the results of
Peoples and Union Bank's operations are included in First Farmers and
Merchants Corporation and Subsidiary's consolidated financial statements
from the date of acquisition.
The accompanying condensed consolidated financial statements illustrate
the effect of the acquisition ("Pro Forma") on First Farmers and
Merchants Corporation and Subsidiary's financial position and results of
operations. The condensed consolidated balance sheet as of December 31,
2000, is based on the historical balance sheets of First Farmers and
Merchants Corporation and Subsidiary and Peoples and Union Bank as of
that date and assumes the acquisition took place on that date. The
condensed consolidated statements of income for the year ended December
31, 2000, and three months ended March 31, 2001, are based on the
historical statements of income of First Farmers and Merchants
Corporation and Subsidiary and Peoples and Union Bank for those periods.
The pro forma condensed consolidated statements of income assume the
acquisition took place on January 1, 2000.
The pro forma condensed consolidated financial statements may not be
indicative of the actual results of the acquisition. In particular, the
pro forma condensed consolidated financial statements are based on
management's current estimate of the allocation of the purchase price,
the actual allocation of which may differ.
The accompanying condensed consolidated pro forma financial statements
should be read in connection with the historical financial statements of
First Farmers and Merchants Corporation and Subsidiary.
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(Dollars in Thousands)
DECEMBER 31, 2000
FIRST PEOPLES
FARMERS AND
AND UNION CONSOLIDATING
MERCHANTS BANK ENTRY CONSOLIDATED
ASSETS
Cash and due from banks $ 28,037 $ 3,660 $ (4,799) $ 26,898
Federal funds sold - 9,700 - 9,700
Securities available-for-sale, at fair value 96,664 18,987 - 115,651
value
Securities held-to-maturity, at cost 129,403 20,925 (20,000) 130,328
Loans, net of allowance for loan losses 371,770 109,177 - 480,947
Premises and equipment, net of depreciation 8,077 1,229 449 9,755
Other assets 18,115 1,733 13,051 32,899
-------- --------- -------- --------
TOTAL ASSETS $ 652,066 $ 165,411 $(11,299) $ 806,178
======== ======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Deposits
Noninterest-bearing $ 81,435 $ 17,746 $ - $ 99,181
Interest-bearing 475,376 135,164 - 610,540
-------- -------- ------- --------
Total deposits 556,811 152,910 - 709,721
-------- -------- ------- --------
Federal funds purchased and securities sold
under agreements to repurchase 7,551 - - 7,551
Dividends payable 1,139 - - 1,139
Accounts payable and
accrued liabilities 6,756 1,202 - 7,958
TOTAL LIABILITIES -------- -------- ------- --------
572,257 154,112 - 726,369
-------- -------- ------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Common stock 29,200 480 (480) 29,200
Additional paid-in capital 4,320 480 (480) 4,320
Retained earnings 46,156 10,374 (10,374) 46,156
Accumulated other comprehensive loss 133 (35) 35 133
-------- -------- -------- --------
TOTAL STOCKHOLDER'S EQUITY 79,809 11,299 (11,299) 79,809
-------- -------- ------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 652,066 $ 165,411 $(11,299) $ 806,178
======== ======== ======== ========
See Note to Proforma Condensed Consolidated Financial
Statements (Unaudited)
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Dollars in Thousands, except per share data)
FOR THE YEAR ENDED DECEMBER 31, 2000
FIRST PEOPLES
FARMERS AND
AND UNION
MERCHANTS BANK CONSOLIDATED
INTEREST INCOME
Interest and fees on loans: $ 31,358 $ 9,326 $ 40,684
Interest and dividend income
on investment securities:
Taxable 10,097 2,908 13,005
Tax-exempt 3,108 57 3,165
Dividends 278 - 278
Other interest income 598 - 598
------- ------- -------
14,081 2,965 17,046
------- ------- -------
TOTAL INTEREST INCOME 45,439 12,291 57,730
INTEREST EXPENSE
Interest on deposits 21,486 6,826 28,312
Interest on other short term borrowings 117 - 117
------- ------- -------
TOTAL INTEREST EXPENSE 21,603 6,826 28,429
------- ------- -------
NET INTEREST INCOME 23,836 5,465 29,301
------- ------- -------
Provision For Loan Losses 900 80 980
------- ------- -------
Net Interest Income After
Provision For Loan Losses 22,936 5,385 28,321
------- ------- -------
NONINTEREST INCOME
Trust department income 1,813 - 1,813
Service fees on deposit accounts 5,136 497 5,633
Other service fees and commissions 422 41 463
Other operating income 566 182 748
------- ------- -------
TOTAL NONINTEREST INCOME 7,937 720 8,657
------- ------- -------
NONINTEREST EXPENSES
Salaries and employee benefits 9,711 1,718 11,429
Net occupancy expense 1,485 157 1,642
Furniture and equipment expense 1,192 104 1,296
Other operating expense 6,780 416 7,196
------- ------- -------
TOTAL NONINTEREST EXPENSES 19,168 2,395 21,563
------- ------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES 11,705 3,710 15,415
PROVISION FOR INCOME TAXES 3,379 1,354 4,733
------- ------- -------
NET INCOME $ 8,326 $ 2,356 $ 10,682
======== ======== ========
NET INCOME PER SHARE OF COMMON STOCK
(Weighted average shows outstanding: $ 3.66
2,210,000) =======
See Note to Proforma Condensed Consolidated Financial Statements
(Unaudited)
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(Dollars in Thousands)
MARCH 31, 2001
FIRST PEOPLES
FARMERS AND
AND UNION CONSOLIDATING
MERCHANTS BANK ENTRY CONSOLIDATED
ASSETS
Cash and due from banks $ 21,309 $ 3,856 $ - $ 25,165
Federal funds sold 8,910 5,725 (5,408) 9,227
Securities available-for-sale, at fair value 103,593 18,639 - 122,232
Securities held-to-maturity, at cost 130,549 20,474 (19,549) 131,474
Loans, net of allowance for loan losses 380,431 110,708 - 491,139
Premises and equipment, net of depreciation 8,189 1,224 449 9,862
Other assets 18,705 1,635 13,051 33,391
-------- -------- --------- --------
TOTAL ASSETS $ 671,686 $ 162,261 $ (11,457) $ 822,490
======== ======== ========= ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Deposits
Noninterest-bearing $ 84,361 $ 39,445 $ - $ 123,806
Interest-bearing 493,559 109,676 - 603,235
-------- -------- --------- --------
Total deposits 577,920 149,121 - 727,041
-------- -------- --------- --------
Securities sold under agreements to
repurchase 1,965 - - 1,965
Accounts payable and accrued liabilities 8,374 1,683 - 10,057
-------- -------- --------- --------
TOTAL LIABILITIES 588,259 150,804 - 739,063
-------- -------- --------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Common stock 29,200 480 (480) 29,200
Additional paid-in capital 4,320 480 (480) 4,320
Retained earnings 48,588 10,219 (10,219) 48,588
Accumulated other comprehensive loss 1,319 278 (278) 1,319
-------- -------- --------- --------
TOTAL STOCKHOLDER'S EQUITY 83,427 11,457 (11,457) 83,427
-------- -------- --------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 671,686 $ 162,261 $ (11,457) $ 822,490
======== ======== ========= ========
See Note to Proforma Condensed Consolidated
Financial Statements (Unaudited)
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(Dollars in Thousands, except per share data)
FOR THE THREE MONTHS ENDED MARCH 31, 2001
FIRST PEOPLES
FARMERS AND
AND UNION
MERCHANTS BANK CONSOLIDATED
INTEREST INCOME
Interest and fees on loans: $ 8,451 $ 2,311 $ 10,762
Interest and dividend income on
investment securities:
Taxable 2,369 760 3,129
Tax-exempt 823 17 840
Dividends 55 - 55
Other interest income 198 - 198
------- ------- -------
3,445 777 4,222
------- ------- -------
TOTAL INTEREST INCOME 11,896 3,088 14,984
INTEREST EXPENSE
Interest on deposits 5,663 1,799 7,462
Interest on other short term borrowings 30 - 30
------- ------- -------
TOTAL INTEREST EXPENSE 5,693 1,799 7,492
------- ------- -------
NET INTEREST INCOME 6,203 1,289 7,492
------- ------- -------
Provision For Loan Losses 255 20 275
------- ------- -------
Net Interest Income After
Provision For Loan Losses 5,948 1,269 7,217
------- ------- -------
NONINTEREST INCOME
Trust department income 438 - 438
Service fees on deposit accounts 1,669 90 1,759
Other service fees and commissions 107 5 112
Other operating income 206 121 327
------- ------- -------
TOTAL NONINTEREST INCOME 2,420 216 2,636
------- ------- -------
NONINTEREST EXPENSES
Salaries and employee benefits 2,545 363 2,908
Net occupancy expense 356 32 388
Furniture and equipment expense 183 24 207
Other operating expense 1,871 154 2,025
------- ------- -------
TOTAL NONINTEREST EXPENSES 4,955 573 5,528
------- ------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES 3,413 912 4,325
PROVISION FOR INCOME TAXES 980 310 1,290
------- ------- -------
NET INCOME $ 2,433 $ 602 $ 3,035
======= ======= =======
NET INCOME PER SHARE OF COMMON STOCK
(Weighted average shows outstanding: 2,920,000) $ 1.04
=======
See Note to Proforma Condensed Consolidated
Financial Statements (Unaudited)
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
NOTE TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - The pro forma adjustments to the condensed consolidated
balance sheet are as follows:
1. To reflect the acquisition of Peoples and Union Bank
and the allocation of the purchase price on the basis of the
fair value of the assets acquired and liabilities assumed.
The components of the purchase price and its allocation of
the assets and liabilities of Peoples and Union Bank are as
follows:
Total purchase price $ 24,956,678
Allocation of the purchase price:
Increase in cash and due from banks 3,856,382
Increase in Federal funds sold 25,273,790
Increase in Securities available-for-sale 19,563,840
Increase in net loans 110,707,842
Increase in premises and equipment 1,673,432
Increase in other assets 1,634,818
Increase in noninterest bearing deposits (39,445,024)
Increase in interest bearing deposits (109,676,202)
Increase in accounts payable and accrued liabilities (1,682,538)
------------
11,906,340
Cost in excess of net assets acquired $ 13,050,338