First Farmers and Merchants (FFMH) AI Stock Analysis

• Market Cap: $203.46M
• Dividend Yield: 2.25%
• Average Volume (3M): 314.00
• Price to Earnings (P/E): 10.7
• Beta (1Y): >-0.01
• Revenue Growth: -0.79%
• EPS Growth: 30.45%
• Country: US
• Employees: 467
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.18
• Shares Outstanding: 4,094,102
• 10 Day Avg. Volume: 309
• 30 Day Avg. Volume: 314
• PEG Ratio: 3.83
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 2.46
• P/FCF Ratio: 4.72
• Enterprise Value/Market Cap: 0.73
• Enterprise Value/Revenue: 1.93
• Enterprise Value/Gross Profit: 2.34
• Enterprise Value/Ebitda: 6.34
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $56.00 ▲(13.94% Upside)

First Farmers and Merchants demonstrates strong financial stability with low leverage and solid cash flow generation. The valuation is attractive with a low P/E ratio and reasonable dividend yield. Technical indicators suggest a neutral market position, with no strong momentum in either direction.

Positive Factors

Balance Sheet Strength

Zero reported total debt and a robust equity base give the bank structural financial resilience. Low leverage supports regulatory capital ratios, funds lending capacity, and reduces refinancing risk, enabling steady operations and strategic flexibility over the next several months.

Cash Generation

Strong operating cash flow and rising free cash flow indicate the franchise converts earnings into real liquidity. This durable cash generation supports dividends, organic loan growth, and internal investments without reliance on external funding over a multi-month horizon.

Profitability and Margin Sustainability

Consistently strong net margins reflect disciplined cost control and profitable core banking operations. Sustained margins boost return on equity and provide a buffer against margin compression or modest revenue headwinds in the medium term.

Negative Factors

Modest Revenue Growth

Revenue growth has been minimal, limiting scale benefits and earnings leverage. Without clearer top-line expansion, the bank may struggle to materially increase profitability or fund growth initiatives, making performance sensitive to local market conditions over months.

Concentrated Community Bank Model

A business model focused on traditional retail and commercial banking concentrates exposure to local economic cycles and interest-rate dynamics. Limited product diversification and geographic scale can constrain growth and increase vulnerability to regional downturns over the medium term.

Limited Historical Cash-Flow Disclosure

The lack of multi-year free cash flow history reduces visibility into the durability of cash conversion and capital allocation trends. This makes it harder to assess whether recent cash-strength improvements are sustainable versus one-off, raising medium-term forecasting uncertainty.

First Farmers and Merchants Business Overview & Revenue Model

Company Description

First Farmers and Merchants Corporation operates as the bank holding company for First Farmers and Merchants Bank that provides various banking and financial services in Tennessee and Alabama. The company's deposit products include personal and business checking and savings, and individual retirement and investment accounts, as well as certificates of deposit. Its loan portfolio comprises personal mortgages; home equity lines of credit; debit and credit cards; personal, auto, and farmer loans; and business loans, such as commercial mortgages, equipment lending and leasing, construction lending, accounts receivable financing, lines of credit, and other products. The company also offers wealth management services, such as trust and investment services; and treasury management solutions, which include accounts receivable and payable, fraud prevention, and account management solutions, as well as online and mobile banking services. It operates 22 branch offices in seven Middle Tennessee counties. The company was founded in 1909 and is based in Columbia, Tennessee.

How the Company Makes Money

FFMH generates revenue primarily through its interest income from loans and mortgages, which constitutes the largest portion of its earnings. The bank issues various types of loans, including personal loans, commercial loans, and agricultural loans, charging interest on these products. Additionally, FFMH earns fees from account services, transaction fees, and investment services provided to clients. Another significant revenue stream comes from the bank's investment portfolio, where it invests in securities to earn interest and dividends. The bank may also engage in partnerships with local businesses and organizations to enhance its service offerings, further contributing to its overall profitability.

First Farmers and Merchants Financial Statement Overview

Summary

First Farmers and Merchants exhibits a strong financial position characterized by stable revenue, commendable profit margins, and solid equity. The company maintains low leverage, enhancing its financial stability. While cash flows are robust, further growth in revenue would bolster overall financial strength.

Income Statement

First Farmers and Merchants has demonstrated stable revenue generation with a slight growth from $57.55 million to $59.05 million in 2024. The net profit margin remained consistently strong, indicating efficient cost management. However, revenue growth is modest, and the lack of EBITDA data limits a full profitability analysis.

Balance Sheet

The company's balance sheet is strong with a robust equity position and zero current total debt, reflected in a debt-to-equity ratio of zero. Return on Equity (ROE) has been impressive due to solid net income performance. The equity ratio is healthy, indicating financial stability and low leverage risk.

Cash Flow

First Farmers and Merchants' cash flow is positive with significant growth in operating cash flow and free cash flow in recent years. The operating cash flow to net income ratio is favorable, suggesting strong cash generation relative to profits. However, the absence of previous free cash flow data limits trend analysis.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	76.57M	59.05M	73.94M	65.37M	64.32M	61.77M
Gross Profit	63.17M	59.05M	57.55M	62.13M	61.94M	57.98M
EBITDA	23.33M	20.95M	21.14M	24.07M	21.16M	19.07M
Net Income	17.91M	16.04M	16.05M	18.05M	15.62M	14.19M
Balance Sheet
Total Assets	1.75B	1.77B	1.87B	1.94B	1.97B	1.80B
Cash, Cash Equivalents and Short-Term Investments	51.22M	46.53M	25.46M	28.95M	94.86M	134.60M
Total Debt	0.00	0.00	104.00M	25.00M	0.00	0.00
Total Liabilities	1.59B	1.63B	1.75B	1.85B	1.81B	1.64B
Stockholders Equity	155.99M	137.58M	124.15M	96.57M	158.54M	159.90M
Cash Flow
Free Cash Flow	0.00	30.77M	17.11M	15.31M	21.18M	12.90M
Operating Cash Flow	0.00	31.29M	17.73M	16.42M	22.63M	16.63M
Investing Cash Flow	0.00	117.61M	86.72M	-116.40M	-223.79M	-287.87M
Financing Cash Flow	0.00	-127.74M	-107.99M	27.33M	166.02M	377.78M

First Farmers and Merchants Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FFMH, the sentiment is Positive. The current price of 49.15 is below the 20-day moving average (MA) of 49.54, above the 50-day MA of 48.57, and above the 200-day MA of 43.78, indicating a bullish trend. The MACD of 0.40 indicates Positive momentum. The RSI at 57.19 is Neutral, neither overbought nor oversold. The STOCH value of 96.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FFMH.

First Farmers and Merchants Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFMH	74 Outperform	$203.46M	10.71	12.17%	2.25%	-0.79%	30.45%
NKSH	72 Outperform	$231.79M	14.64	7.51%	4.47%	9.69%	41.26%
CBNA	70 Outperform	$228.18M	12.03	13.91%	―	―	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
EFSI	67 Neutral	$205.97M	24.09	6.63%	3.11%	-1.45%	-31.32%
FRAF	67 Neutral	$228.48M	10.76	9.91%	2.51%	12.06%	10.38%
FSFG	66 Neutral	$238.37M	10.24	12.50%	1.95%	7.65%	69.41%