Attached files
| file | filename |
|---|---|
| 8-K - FIRST FARMERS & MERCHANTS CORP | esfirstfarmers8k10-27.htm |
EXHIBIT 99.1
For additional information
contact
Robert E. Krimmel
Chief Financial Officer
(931) 380-8257
FIRST FARMERS AND MERCHANTS CORPORATION REPORTS THIRD QUARTER NET INCOME OF $2.7 MILLION, OR $0.57 PER COMMON SHARE
COLUMBIA, Tenn. (October 27, 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 September 30, 2015, showing increases in earnings, loans, and net interest income.
Key highlights of First Farmers’ results for the third quarter of 2015 include:
-
Net income of $2.72 million or $0.57 per common share, up 1% from $2.70 million or $0.56 per common share for the previous quarter, but down from $2.73 million or $0.55 per common share for the year-earlier quarter;
-
Net income, excluding special items for each quarter, of $2.6 million or $0.54 per common share, up 5% from $2.5 million or $0.51 per common share for the previous quarter, and up 10% from $2.4 million or $0.48 per common share for the year-earlier quarter (see non-GAAP reconciliation);
-
Solid loan growth of $42 million or 6% from the previous quarter and $111 million or 18% compared with the year-earlier quarter;
-
Deposit growth of $5 million from the previous quarter and $85 million or 9% compared with the year-earlier quarter; and
-
A decline in nonperforming assets of $275,000 or 11% compared with the previous quarter and $4.2 million or 66% compared with the year-earlier quarter.
Commenting on the results, T. Randy Stevens, Chairman and Chief Executive Officer of First Farmers, said “The third quarter earnings performance, after adjusting for special items, expressed strong momentum with double-digit year-over-year loan growth and a positive shift in our earning assets.” Stevens added, “We continue to be pleased with our most recent investments in new branch locations and high quality bankers. The combined efforts of our entire team have allowed First Farmers to enjoy net income of $8.0 million through the nine months ended September 30, 2015 an increase of 6% compared to the same period in 2014.”
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 2
Third Quarter 2015 Results of Operations
The $17,000 increase in reported quarterly earnings for the third quarter of 2015 compared with the previous quarter was primarily driven by improvement in net interest income coupled with a realized gain on the sale of AFS securities offset in part by an increase in the corporate effective tax rate. The $7,000 decrease in reported quarterly earnings for the third quarter of 2015 compared with the year-earlier quarter was primarily driven by a reported gain on the sale of foreclosed property for the year-earlier quarter and an increase in salaries and employee benefits offset in part with improved net interest income.
For the third quarter of 2015, First Farmers continued to achieve solid loan growth of $42 million or 6% from the previous quarter and advancing $111 million or 18% compared with the year-earlier quarter, driven primarily by increased commercial, commercial real estate, and residential mortgage lending. Total deposits stood at $1.061 billion at the end of the third quarter of 2015, up $5 million from the previous quarter and up $85 million or 9% from the year-earlier quarter.
Capital Management Initiatives
During the third quarter of 2015, First Farmers repurchased approximately 34,000 shares of common stock at an average price of $27.00 per share under its stock repurchase program. Authorization to repurchase approximately 79,000 shares remains under the current program, which is set to expire in December 2015, unless extended or otherwise completed.
Asset Quality
Total nonperforming assets decreased to $2.2 million, or 0.18% of total assets, compared to $2.5 million, or 0.21% of total assets, for the previous quarter and declined from $6.4 million, or 0.57% of total assets, compared to the year-earlier quarter. Net recoveries to average loans were 0.12% for the third quarter of 2015 compared to 0.19% for the previous quarter and net charge-offs of 0.07% 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 third quarter of 2015. The allowance for loan losses represented 1.18% of total loans outstanding as of September 30, 2015 versus 1.25% for the previous quarter and 1.34% for year-earlier quarter.
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 3
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 September 30, 2015, First Farmers reported total assets of approximately $1.2 billion and total shareholders’ equity of approximately $120 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.
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 4
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 |
|
Nine Months Ended |
|
|||||||||||
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|
|
September 30, |
|
June 30, |
|
September 30, |
|
||||||||
|
Total noninterest income |
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
2014 |
|
|
$ |
2,907 |
$ |
3,177 |
|
$ |
2,774 |
|
$ |
8,566 |
|
$ |
8,919 |
|
||
|
(Gain) loss on sale of securities |
|
(135) |
|
|
7 |
|
|
– |
|
(405) |
|
|
(540) |
|
|
|
Gain on foreclosed property |
|
– |
|
|
(475) |
|
|
– |
|
(17) |
|
(471) |
|
||
|
Adjusted noninterest income |
$ |
2,772 |
|
$ |
2,709 |
|
$ |
2,774 |
|
$ |
8,144 |
|
$ |
7,908 |
|
|
Net income as reported |
$ |
2,719 |
|
$ |
2,726 |
|
$ |
2,702 |
|
$ |
8,038 |
|
$ |
7,585 |
|
|
Tax benefit |
|
– |
|
|
– |
|
|
(203) |
|
|
– |
|
|
– |
|
|
Total adjustments, net of tax1 |
|
(101) |
|
|
(340) |
|
|
– |
|
(320) |
|
(747) |
|
||
|
Adjusted net income |
$ |
2,618 |
|
$ |
2,386 |
|
$ |
2,499 |
|
$ |
7,718 |
|
$ |
6,838 |
|
|
Basic earnings per share |
$ |
0.57 |
|
$ |
0.55 |
|
$ |
0.56 |
|
$ |
1.66 |
|
$ |
1.52 |
|
|
Total adjustments, net of tax1 |
|
(0.03) |
|
|
(0.07) |
|
|
(0.05) |
|
|
(0.07) |
|
(0.15) |
|
|
|
Adjusted basic earnings per share |
$ |
0.54 |
|
$ |
0.48 |
|
$ |
0.51 |
|
$ |
1.59 |
|
$ |
1.37 |
|
(1) The effective tax rate for the period presented is used to determine net of tax amounts.
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 5
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
September 30, |
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|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
2015 |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
2014 |
|
|
|
ASSETS |
Cash and due from banks |
$ |
20,302 |
$ |
18,511 |
|
|
|
|
Interest-bearing deposits |
|
8,956 |
|
|
10,086 |
|
|
|
Federal funds sold |
|
- |
|
|
1,700 |
|
|
|
Total cash and cash equivalents |
|
29,258 |
|
|
30,297 |
|
|
|
Securities: |
|
|
|
|
|
|
|
|
Available-for-sale |
|
403,366 |
|
|
397,886 |
|
|
|
Held-to-maturity (fair market value $3,240 and |
|
|
|
|
|
|
|
|
$22,263 as of Sept 30, 2015 and December 31, 2014, |
|
|
|
|
|
|
|
|
respectively) |
|
3,210 |
|
|
21,985 |
|
|
|
Total securities |
|
406,576 |
|
|
419,871 |
|
|
|
Loans, net of deferred fees |
|
727,535 |
|
|
652,052 |
|
|
|
Allowance for loan and lease losses |
|
(8,585) |
|
|
(7,934) |
|
|
|
Net loans |
|
718,950 |
|
|
644,118 |
|
|
|
Bank premises and equipment, net |
|
25,741 |
|
|
25,773 |
|
|
|
Other real estate owned |
|
90 |
|
|
5 |
|
|
|
Bank owned life insurance |
|
26,447 |
|
|
26,176 |
|
|
|
Goodwill |
|
9,018 |
|
|
9,018 |
|
|
|
Deferred tax asset |
|
3,271 |
|
|
5,097 |
|
|
|
Other assets |
|
11,545 |
|
|
10,640 |
|
|
|
TOTAL ASSETS |
$ |
1,230,896 |
|
$ |
1,170,995 |
|
|
LIABILITIES |
Deposits: |
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
223,380 |
$ |
204,358 |
|
|
|
|
Interest-bearing |
|
837,821 |
|
|
815,597 |
|
|
|
Total deposits |
|
1,061,201 |
|
|
1,019,955 |
|
|
|
Federal funds purchased |
|
11,515 |
|
|
- |
|
|
|
Securities sold under agreements to repurchase |
|
24,936 |
|
|
22,834 |
|
|
|
Accounts payable and accrued liabilities |
|
13,282 |
|
|
13,622 |
|
|
|
TOTAL LIABILITIES |
|
1,110,934 |
|
|
1,056,411 |
|
|
SHAREHOLDERS' |
Common stock - $10 par value per share, 8,000,000 shares |
|
|
|
|
|
|
|
EQUITY |
authorized; 4,779,697 and 4,900,576 shares issued |
|
|
|
|
|
|
|
|
and outstanding as of September 30, 2015 and |
|
|
|
|
|
|
|
|
December 31, 2014, respectively |
|
47,797 |
|
|
49,006 |
|
|
|
Retained earnings |
|
71,831 |
|
|
67,609 |
|
|
|
Accumulated other comprehensive income (loss) |
|
239 |
|
|
(2,126) |
|
|
|
TOTAL SHAREHOLDERS' EQUITY BEFORE |
|
|
|
|
|
|
|
|
NONCONTROLLING INTEREST - PREFERRED |
|
|
|
|
|
|
|
|
STOCK OF SUBSIDIARY |
|
119,867 |
|
|
114,489 |
|
|
|
Noncontrolling interest - preferred stock of subsidiary |
|
95 |
|
|
95 |
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
119,962 |
|
|
114,584 |
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
1,230,896 |
|
$ |
1,170,995 |
|
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 6
|
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
|||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
(dollars in thousands, except per share data) |
Three months ended September 30, |
|
Nine months ended September 30, |
|
|||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
INTEREST AND |
Interest and fees on loans |
$ |
7,815 |
$ |
7,248 |
|
|
$ |
22,604 |
|
$ |
21,190 |
|
||
|
DIVIDEND |
Income on investment securities |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
INCOME |
Taxable interest |
|
1,422 |
|
|
1,469 |
|
|
4,385 |
|
|
4,230 |
|
||
|
|
Exempt from federal income tax |
|
530 |
|
|
578 |
|
|
1,692 |
|
|
1,867 |
|
||
|
|
Dividends |
|
50 |
|
|
56 |
|
|
160 |
|
|
209 |
|
||
|
|
Total interest income |
|
9,817 |
|
|
9,351 |
|
|
28,841 |
|
|
27,496 |
|
||
|
INTEREST |
Interest on deposits |
|
528 |
|
|
587 |
|
|
1,605 |
|
|
1,798 |
|
||
|
EXPENSE |
Interest on other short term borrowings |
|
28 |
|
|
18 |
|
|
73 |
|
|
50 |
|
||
|
|
Total interest expense |
|
556 |
|
|
605 |
|
|
1,678 |
|
|
1,848 |
|
||
|
|
Net interest income |
|
9,261 |
|
|
8,746 |
|
|
27,163 |
|
|
25,648 |
|
||
|
|
Provision for loan and lease losses |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||
|
|
Net interest income after provision |
|
9,261 |
|
|
8,746 |
|
|
27,163 |
|
|
25,648 |
|
||
|
NONINTEREST |
Gain on loans sold |
|
77 |
|
|
86 |
|
|
190 |
|
|
180 |
|
||
|
INCOME |
Trust department income |
|
619 |
|
|
633 |
|
|
1,911 |
|
|
1,886 |
|
||
|
|
Service fees on deposit accounts |
|
1,695 |
|
|
1,681 |
|
|
4,916 |
|
|
4,845 |
|
||
|
|
Brokerage fees |
|
144 |
|
|
103 |
|
|
442 |
|
|
325 |
|
||
|
|
Earnings on bank owned life insurance |
|
99 |
|
|
104 |
|
|
271 |
|
|
293 |
|
||
|
|
Gain (loss) on sale of securities |
|
135 |
|
|
(7) |
|
|
405 |
|
|
540 |
|
||
|
|
Gain on foreclosed property |
|
- |
|
|
475 |
|
|
17 |
|
|
471 |
|
||
|
|
Other noninterest income |
|
138 |
|
|
102 |
|
|
414 |
|
|
379 |
|
||
|
|
Total noninterest income |
|
2,907 |
|
|
3,177 |
|
|
8,566 |
|
|
8,919 |
|
||
|
NONINTEREST |
Salaries and employee benefits |
|
4,654 |
|
|
4,483 |
|
|
13,701 |
|
|
13,380 |
|
||
|
EXPENSE |
Net occupancy expense |
|
566 |
|
|
510 |
|
|
1,638 |
|
|
1,453 |
|
||
|
|
Depreciation expense |
|
377 |
|
|
349 |
|
|
1,114 |
|
|
1,060 |
|
||
|
|
Data processing expense |
|
654 |
|
|
573 |
|
|
1,878 |
|
|
1,734 |
|
||
|
|
Legal and professional fees |
|
213 |
|
|
219 |
|
|
1,032 |
|
|
647 |
|
||
|
|
Stationary and office supplies |
|
68 |
|
|
74 |
|
|
229 |
|
|
229 |
|
||
|
|
Advertising and promotions |
|
307 |
|
|
376 |
|
|
903 |
|
|
1,055 |
|
||
|
|
FDIC insurance premium expense |
|
147 |
|
|
172 |
|
|
426 |
|
|
461 |
|
||
|
|
Other real estate expense |
|
1 |
|
|
17 |
|
|
1 |
|
|
68 |
|
||
|
|
Other noninterest expense |
|
1,537 |
|
|
1,393 |
|
|
4,183 |
|
|
4,202 |
|
||
|
|
Total noninterest expense |
|
8,524 |
|
|
8,166 |
|
|
25,105 |
|
|
24,289 |
|
||
|
|
Income before taxes |
|
3,644 |
|
|
3,757 |
|
|
10,624 |
|
|
10,278 |
|
||
|
|
Provision for income taxes |
|
925 |
|
|
1,031 |
|
|
2,578 |
|
|
2,685 |
|
||
|
|
Net income before noncontrolling interest - |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
dividends on preferred stock of |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
subsidiary |
|
2,719 |
|
|
2,726 |
|
|
8,046 |
|
|
7,593 |
|
||
|
|
Noncontrolling interest-dividends on |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
preferred stock subsidiary |
|
- |
|
|
- |
|
|
8 |
|
|
8 |
|
||
|
|
Net income for common shareholders |
$ |
2,719 |
|
$ |
2,726 |
|
|
$ |
8,038 |
|
$ |
7,585 |
|
|
|
|
Weighted average shares outstanding |
|
4,808,352 |
|
|
4,934,895 |
|
|
4,852,628 |
|
|
4,977,091 |
|
||
|
|
Basic earnings per share |
$ |
0.57 |
$ |
0.55 |
|
$ |
1.66 |
|
$ |
1.52 |
|
|||
-MORE-
FFMH Reports Third Quarter 2015 Results
October 22, 2015
Page 7
|
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARIES |
|
||||||||||||||
|
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
||||||||||||||
|
|
For the three months ended |
|
|||||||||||||
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|||||
|
Results of Operations: |
(dollars in thousands, except per share data) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
9,817 |
$ |
9,720 |
$ |
9,303 |
|
$ |
9,284 |
$ |
9,351 |
|
|||
|
Interest expense |
|
556 |
|
|
556 |
|
|
565 |
|
|
580 |
|
|
605 |
|
|
Net interest income |
|
9,261 |
|
|
9,164 |
|
|
8,738 |
|
|
8,704 |
|
|
8,746 |
|
|
Provision for possible loan losses, net |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Noninterest income |
|
2,907 |
|
|
2,774 |
|
|
2,885 |
|
|
2,808 |
|
|
3,177 |
|
|
Noninterest expense |
|
8,524 |
|
|
8,559 |
|
|
8,030 |
|
|
7,984 |
|
|
8,166 |
|
|
Income before income taxes |
|
3,644 |
|
|
3,379 |
|
|
3,593 |
|
|
3,528 |
|
|
3,757 |
|
|
Income taxes |
|
925 |
|
|
677 |
|
|
976 |
|
|
871 |
|
|
1,031 |
|
|
Net income for common shareholders |
$ |
2,719 |
|
$ |
2,702 |
|
$ |
2,617 |
|
$ |
2,657 |
|
$ |
2,726 |
|
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.57 |
$ |
0.56 |
$ |
0.53 |
|
$ |
0.54 |
$ |
0.55 |
|
|||
|
Weighted average shares outstanding per |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
quarter |
|
4,808,352 |
|
|
4,853,265 |
|
|
4,897,245 |
|
|
4,909,910 |
|
|
4,934,895 |
|
|
Financial Condition Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total securities |
$ |
406,576 |
$ |
427,874 |
$ |
440,314 |
|
$ |
419,871 |
$ |
402,191 |
|
|||
|
Loans, net of deferred fees |
|
727,535 |
|
|
685,402 |
|
|
675,015 |
|
|
652,052 |
|
|
616,966 |
|
|
Allowance for loan and lease losses |
|
(8,585) |
|
|
(8,593) |
|
|
(7,944) |
|
|
(7,934) |
|
|
(8,257) |
|
|
Total assets |
|
1,230,896 |
|
|
1,213,250 |
|
|
1,219,287 |
|
|
1,170,995 |
|
|
1,130,684 |
|
|
Total deposits |
|
1,061,201 |
|
|
1,056,717 |
|
|
1,063,822 |
|
|
1,019,955 |
|
|
976,189 |
|
|
Asset Quality Data and Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing assets |
$ |
2,218 |
$ |
2,493 |
$ |
5,229 |
|
$ |
5,483 |
$ |
6,429 |
|
|||
|
Non-performing assets to total assets |
|
0.18% |
|
|
0.21% |
|
|
0.43% |
|
|
0.47% |
|
|
0.57% |
|
|
Allowance for loan and lease losses to total loans |
|
1.18% |
|
|
1.25% |
|
|
1.18% |
|
|
1.22% |
|
|
1.34% |
|
|
Net (recoveries) charge-offs to average loans (annualized) |
|
(0.12%) |
|
|
(0.19%) |
|
|
(0.01%) |
|
|
0.10% |
|
|
0.07% |
|
-END-