First Farmers and Merchants (OTCPK:FFMH) - Share price, News & Analysis

FFMH fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

FFMH Stock Overview

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.

Rewards

Trading at 69.1% below our estimate of its fair value

Earnings have grown 8.1% per year over the past 5 years

Pays a reliable dividend of 3.17%

Risk Analysis

Shares are highly illiquid

First Farmers and Merchants Competitors

Price History & Performance

Summary of all time highs, changes and price drops for First Farmers and Merchants
Historical stock prices
Current Share Price	US$26.50
52 Week High	US$36.13
52 Week Low	US$26.50
Beta	0.23
1 Month Change	-5.36%
3 Month Change	-21.25%
1 Year Change	-22.06%
3 Year Change	-40.21%
5 Year Change	-23.19%
Change since IPO	-24.29%

Shareholder Returns

	FFMH	US Banks	US Market
7D	-1.9%	0.3%	-0.9%
1Y	-22.1%	-16.9%	-20.8%

Return vs Industry: FFMH underperformed the US Banks industry which returned -16.2% over the past year.

Return vs Market: FFMH underperformed the US Market which returned -20.6% over the past year.

Price Volatility

Is FFMH's price volatile compared to industry and market?
FFMH volatility
FFMH Average Weekly Movement	n/a
Banks Industry Average Movement	3.8%
Market Average Movement	7.9%
10% most volatile stocks in US Market	16.5%
10% least volatile stocks in US Market	3.1%

Stable Share Price: Insufficient data to determine FFMH's volatility over the past 3 months.

Volatility Over Time: Insufficient data to determine FFMH's volatility change over the past year.

About the Company

Founded	Employees	CEO	Website
1909	n/a	Randy Stevens	https://www.myfirstfarmers.com

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.

First Farmers and Merchants Fundamentals Summary

How do First Farmers and Merchants's earnings and revenue compare to its market cap?
FFMH fundamental statistics
Market Cap	US$114.22m
Earnings (TTM)	US$16.30m
Revenue (TTM)	US$62.70m

7.0x

P/E Ratio

0.9x

P/B Ratio

Is FFMH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FFMH income statement (TTM)
Revenue	US$62.70m
Cost of Revenue	US$0
Gross Profit	US$62.70m
Other Expenses	US$46.40m
Earnings	US$16.30m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.78
Gross Margin	100.00%
Net Profit Margin	25.99%
Debt/Equity Ratio	0.0%

How did FFMH perform over the long term?

See historical performance and comparison

Dividends

3.2%

Current Dividend Yield

22%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is FFMH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FFMH?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FFMH. This is calculated by dividing FFMH's market cap by their current preferred multiple.
What is FFMH's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$114.22m

FFMH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does FFMH's PE Ratio compare to its peers?

FFMH PE Ratio vs Peers

The above table shows the PE ratio for FFMH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.9x

Forward PE

Price-To-Earnings vs Peers: FFMH is good value based on its Price-To-Earnings Ratio (7x) compared to the peer average (10.9x).

Price to Earnings Ratio vs Industry

How does FFMH's PE Ratio compare vs other companies in the U.S. Banks Industry?

Price-To-Earnings vs Industry: FFMH is good value based on its Price-To-Earnings Ratio (7x) compared to the US Banks industry average (9.6x)

Price to Earnings Ratio vs Fair Ratio

What is FFMH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FFMH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate FFMH's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of FFMH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FFMH ($26.5) is trading below our estimate of fair value ($85.81)

Significantly Below Fair Value: FFMH is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FFMH's PEG Ratio to determine if it is good value.

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Future Growth

How is First Farmers and Merchants forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.1%

Forecasted Banks industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as First Farmers and Merchants has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether First Farmers and Merchants is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access First Farmers and Merchants's filings and announcements here.

Past Performance

How has First Farmers and Merchants performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

8.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FFMH has high quality earnings.

Growing Profit Margin: FFMH's current net profit margins (26%) are higher than last year (24.6%).

Past Earnings Growth Analysis

Earnings Trend: FFMH's earnings have grown by 8.1% per year over the past 5 years.

Accelerating Growth: FFMH's earnings growth over the past year (16.4%) exceeds its 5-year average (8.1% per year).

Earnings vs Industry: FFMH earnings growth over the past year (16.4%) underperformed the Banks industry 20.4%.

Return on Equity

High ROE: FFMH's Return on Equity (13.1%) is considered low.

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Financial Health

How is First Farmers and Merchants's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: FFMH's Assets to Equity ratio (17.2x) is moderate.

Allowance for Bad Loans: FFMH has a sufficient allowance for bad loans (791%).

Low Risk Liabilities: 99% of FFMH's liabilities are made up of primarily low risk sources of funding.

Loan Level: FFMH has an appropriate level of Loans to Assets ratio (41%).

Low Risk Deposits: FFMH's Loans to Deposits ratio (44%) is appropriate.

Level of Bad Loans: FFMH has an appropriate level of bad loans (0.1%).

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Dividend

What is First Farmers and Merchants's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.17%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FFMH's dividend (3.17%) is higher than the bottom 25% of dividend payers in the US market (1.63%).

High Dividend: FFMH's dividend (3.17%) is low compared to the top 25% of dividend payers in the US market (4.33%).

Stability and Growth of Payments

Stable Dividend: FFMH's dividends per share have been stable in the past 10 years.

Growing Dividend: FFMH's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (22.3%), FFMH's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.1yrs

Average management tenure

CEO

Randy Stevens (69 yo)

20yrs

Tenure

US$814,116

Compensation

Mr. Thomas Randall Stevens, also known as Randy, has been the Chief Executive Officer at First Farmers and Merchants Corporation since June 30, 2002. He served as Chairman & CEO at First Farmers and Mercha...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Randy's total compensation is reasonable compared to companies of similar size in the US market.

Compensation vs Earnings: Insufficient data to compare Randy's compensation with company performance.

Leadership Team

Experienced Management: FFMH's management team is seasoned and experienced (7.1 years average tenure).

Board Members

Experienced Board: FFMH's board of directors are considered experienced (5.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/22 00:00
End of Day Share Price	2022/06/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31