3/8/25
First Farmers Financial Corporation (FFMR) is a regional bank that doesn’t make headlines like the big players, but for those who appreciate steady, reliable dividends, it’s a name worth knowing. Based in Tennessee, this community bank has built a reputation for conservative financial management and consistent shareholder returns. Unlike high-growth tech stocks or volatile energy plays, FFMR is all about stability. It offers a reliable income stream backed by strong fundamentals, making it an appealing choice for investors looking to generate passive income.
Let’s take a deep dive into what makes this stock stand out for dividend-focused investors.
📊 Key Dividend Metrics
💰 Dividend Yield: 2.96%
📈 5-Year Average Yield: 2.82%
💵 Annual Dividend Payout: $1.96 per share
🔄 Dividend Growth: Steady, with consistent increases over time
🔎 Payout Ratio: 38.71%, a sustainable level for a bank
📅 Next Dividend Date: July 15, 2024
🚀 Ex-Dividend Date: December 31, 2024
Dividend Overview
FFMR’s dividend yield sits at a reasonable 2.96%, which isn’t the highest in the banking sector, but it’s solid for a small-cap regional bank. What makes it attractive is the consistency. The company has a long history of paying dividends without interruption, and the payout ratio of 38.71% shows that it’s not overextending itself.
A dividend yield close to 3% may not seem groundbreaking, but when combined with the company’s reliable earnings, it becomes a strong income-generating asset. FFMR doesn’t operate with the risk of higher-yielding dividend stocks that sometimes sacrifice financial stability for short-term payouts. Instead, it strikes a balance—offering a reasonable yield while maintaining a sustainable payout structure.
Dividend Growth and Safety
Dividend investors know that a good yield is only part of the equation. Growth and safety matter just as much, if not more. FFMR’s profit margin of 40.56% suggests that the company has plenty of room to maintain and even increase its dividend over time. On top of that, quarterly earnings growth is sitting at a solid 21.7%, meaning the company isn’t just staying afloat—it’s actually expanding its bottom line.
The payout ratio tells a crucial story here. At just under 40%, it shows that FFMR is keeping plenty of earnings to reinvest into the business while still rewarding shareholders. This is the kind of balance that income-focused investors should look for.
Another plus is the company’s stock stability. With a beta of 0.20, FFMR moves far less than the broader market. That’s a good sign for those who prioritize steady income over price swings. Less volatility means fewer headaches for long-term investors who want to hold onto the stock for years while collecting dividends.
Chart Analysis
The stock chart for First Farmers Financial Corporation (FFMR) reveals some key insights for investors, particularly those focused on dividends and long-term stability. Here’s a breakdown of what the chart is telling us:
Trend Analysis
- The stock has been in a gradual downtrend since mid-2024, as shown by the declining 50-day and 200-day moving averages.
- The 50-day moving average is sloping downward but seems to be flattening out near the current price level. This suggests that downward momentum may be slowing.
- The 200-day moving average remains above the price, reinforcing the fact that the stock is still in a longer-term downtrend.
Price Action & Support Levels
- The stock recently traded at $66.20, with a narrow range on the latest trading day (high of $66.20, low of $66.00).
- There seems to be support around the $65-$66 zone, as the stock has bounced off this range multiple times in recent months.
- Resistance appears to be forming near $67-$68, where the stock has struggled to break out.
Volume & Market Participation
- Trading volume is low, with just 920 shares traded, reinforcing the fact that FFMR is a lightly traded stock.
- There were some spikes in volume earlier in February, indicating potential accumulation by larger investors.
- A few green volume bars show periods of buying interest, but overall volume remains thin.
Relative Strength Index (RSI)
- The RSI is hovering at a low level, indicating the stock has been in a weak momentum phase.
- It hasn’t yet reached oversold territory (below 30), but it is close. This suggests potential for a bounce if buyers step in.
Recent Candlestick Action
Looking at the last five trading days:
- The price has remained stable around $66, with small-bodied candles. This indicates indecision in the market.
- Lower wicks on recent candles suggest some buying pressure, preventing the stock from falling further.
- No major bullish reversal patterns have formed yet, but the stock is showing resilience around support.
Overall Outlook
- Dividend investors should focus on stability. The stock isn’t in a clear uptrend, but it is holding above support.
- The downtrend may be slowing, and if the stock can move above the 50-day moving average, it could signal a potential recovery.
- Volume is low, meaning price swings could be exaggerated on light trading days.
- The next move depends on whether buyers step in at support ($65-$66) or if selling continues toward lower levels.
For now, FFMR appears to be stabilizing, but a break above $67-$68 with stronger volume would be a sign of a potential reversal.
Analyst Ratings
In recent times, First Community Bankshares, Inc. (FCBC) has received varied assessments from analysts, reflecting both optimism and caution regarding its performance.
Upgrades
- February 3, 2021 🟢 Piper Sandler upgraded FCBC from “Neutral” to “Overweight.” This upgrade was based on the firm’s recognition of FCBC’s robust financial health and promising growth prospects at that time.
Downgrades
- January 31, 2022 🔴 Piper Sandler downgraded FCBC from “Overweight” to “Neutral,” adjusting the price target from $37 to $35. This change reflected concerns about potential challenges in the banking sector that could impact FCBC’s performance.
- July 31, 2023 🟠 Piper Sandler maintained an “Underweight” rating but raised the price target from $28 to $33, indicating a cautious stance despite acknowledging some positive factors.
Consensus Price Target
📊 As of the latest available data, the consensus among analysts for FCBC’s price target is approximately $38.00. This reflects a balanced view, considering both the bank’s strengths and the challenges it may face in the current economic environment.
Earnings Report Summary
First Farmers and Merchants Corporation wrapped up 2024 on a strong note, delivering solid numbers in its latest earnings report. The company posted $4.9 million in net income for the fourth quarter, marking a 33.2 percent jump from the same time last year. Earnings per share (EPS) also climbed to $1.20, up 36.4 percent, making it the highest quarterly earnings since mid-2021.
A big reason for this positive momentum was a 22.6 percent drop in interest expenses, thanks to smart balance sheet management and a steady increase in core deposits. As a result, net interest income surged by 20.9 percent, hitting $12.1 million for the quarter. The company’s net interest margin improved to 2.82 percent, continuing a four-quarter streak of steady gains.
For the full year, net income remained steady at $16.0 million, while EPS edged up slightly to $3.90 from $3.80 in 2023. While adjusted net income dipped slightly by 2.0 percent, the overall financial picture remained stable.
On the lending side, the bank’s total loan portfolio slipped by 2.0 percent, settling at $999 million. However, this was offset by a 3.5 percent rise in core deposits, adding $43.6 million in new balances. Meanwhile, the wealth management and trust services division saw record revenue of $4.7 million, with managed assets reaching an impressive $6.2 billion.
One of the most notable highlights was the 14.5 percent boost in book value per share, which climbed to $34.06 from $29.74 the previous year. This reflects the company’s strong financial foundation and disciplined management. In addition, the Board of Directors extended the stock repurchase program, authorizing the buyback of 200,000 more shares for 2025. Shareholders also got a win with a 5.3 percent increase in the cash dividend, marking an incredible 100 consecutive quarters of dividend payments.
Looking ahead, First Farmers is setting its sights on more growth in 2025. A strong loan pipeline, improved net interest margins, and a rock-solid balance sheet are expected to keep earnings on an upward trajectory. The company is also making moves to expand digital banking services and streamline operations with new technology. On top of that, its recent approval to sell mortgage loans directly to Freddie Mac should help boost non-interest income in the coming quarters.
All in all, First Farmers delivered a strong 2024, and with smart financial moves and a focus on efficiency, the company seems well-positioned for continued success in the year ahead.
Financial Health and Stability
Dividends are only as good as the company paying them, so financial strength is a critical factor. FFMR’s numbers suggest it’s in good shape.
- Total Cash: $87.82 million
- Total Debt: $173.07 million
- Book Value Per Share: $21.44
While carrying some debt is standard for banks, the overall balance sheet looks healthy. One key metric to look at for banks is the price-to-book ratio, which currently stands at 1.67. That suggests the stock isn’t overly expensive relative to its assets, a reassuring sign for value investors.
Revenue growth also paints a positive picture. The company posted 11.6% year-over-year growth in revenue, showing that its business model remains strong. And with earnings per share at $4.96, it’s clear that FFMR is generating solid profits, which should keep its dividend in a comfortable position.
Valuation and Stock Performance
Valuation is always a key piece of the puzzle, especially for dividend investors who don’t want to overpay for a stock. Right now, FFMR’s price-to-earnings (P/E) ratio sits at 13.35, which is quite reasonable. It suggests the stock isn’t overpriced, making it a fairly valued option for investors looking for dependable income.
Taking a look at stock performance over the past year:
- 52-Week Range: $64.10 – $70.00
- Current Price: $66.20
- 50-Day Moving Average: $66.44
- 200-Day Moving Average: $66.47
The stock has been remarkably stable, staying within a tight range in the mid-$60s. That’s exactly the kind of price movement long-term dividend investors prefer. A predictable trading range with minimal volatility means shareholders can collect dividends without worrying about big price swings.
Risks and Considerations
While FFMR has plenty of strengths, no stock is without risks. Here are a few factors dividend investors should keep in mind.
1️⃣ Interest Rate Sensitivity
As a regional bank, FFMR’s profits are influenced by interest rates. If rates fall significantly, the company’s net interest margin could shrink, affecting overall profitability and its ability to grow the dividend.
2️⃣ Competition from Larger Banks
Community banks serve a specific niche, but they face constant pressure from larger institutions with bigger balance sheets. While FFMR has done well maintaining a loyal customer base, the competition is always there.
3️⃣ Limited Liquidity
With a daily average trading volume of just 745 shares, FFMR isn’t the most liquid stock. This can make it harder for investors to buy or sell shares in large quantities without impacting the stock price.
4️⃣ Economic Conditions
Like all banks, FFMR’s financial health is tied to the broader economy. If a recession hits, loan defaults could rise, putting pressure on earnings and potentially impacting dividend payments.
Final Thoughts
For investors looking for a steady dividend payer in the financial sector, FFMR checks a lot of the right boxes. It offers a solid 2.96% yield, a manageable payout ratio, and strong profitability, making it a compelling option for those seeking reliable income.
The company’s valuation is reasonable, the stock price is stable, and revenue is growing at a healthy pace. While there are risks, such as interest rate fluctuations and competition from larger banks, FFMR has a track record of financial strength and consistent payouts.
It may not be the most exciting stock on the market, but for those who value stability, income, and long-term reliability, FFMR is worth keeping on the radar.
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