SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D. C. 20549

                                         FORM 10-Q


                      Quarterly Report Pursuant to Section 13 or 15(d) of
                             the Securities Exchange Act of 1934

                          For the quarter ended September 30, 1997 
                               Commission file number 0-10972


                         First Farmers and Merchants Corporation 
               (Exact name of registrant as specified in its charter)

          Tennessee                                      62-1148660
 (State or other jurisdiction of 
  incorporation or organization)  		     (I.R.S. Employer Identification No.)


    		816 South Garden Street
      Columbia, Tennessee                         38402 - 1148 
		 (Address of principal executive offices) 				   (Zip Code)


                                  (615) 388-3145
               (Registrant's telephone number, including area code)

                                                                
  (Former name, former address and former fiscal year, if changed since last
   report)


	Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

 Yes   X     No      

	Indicate the number of shares outstanding of each of the
issuer's common stock, as of September 30, 1997.    1,400,000 shares


                   This filing contains   11   pages.

<PAGE>

                     PART 1 - FINANCIAL INFORMATION


Item 1. Financial Statements

  	The following unaudited consolidated financial statements of
   the registrant and its subsidiary for the nine months ended
   September 30, 1997, are as follows:

  	Consolidated balance sheets - September 30, 1997, and December
   31, 1996.

  	Consolidated statements of income - For the three months and
   nine months ended September 30, 1997, and September 30, 1996.

  	Consolidated statements of cash flows - For the nine months
   ended September 30, 1997, and September 30, 1996.



<PAGE>


<TABLE>
            FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY          
                            CONSOLIDATED BALANCE SHEETS 
                    SEPTEMBER 30, 1997 and DECEMBER 31, 1996 
<CAPTION>
 ASSETS 	                                 	1997         	 	1996  
<S>                                   <C>             <C>
Cash and due from banks 	             $ 	27,086,486 	 $ 	27,916,507 
Federal funds sold 	 	                    3,200,000 	 	      - 
Securities 	 	 	 	 
 Available for sale (amortized cost 
  $54,951,301 and $55,898,299 
  respectively) 	 	                      55,885,692 	 	  56,141,535 
 Held to maturity (fair value 
  $99,613,345 and $119,226,021
  respectively) 	 	                      98,121,552 	 	 118,541,750 
      Total securities 	 	              154,007,244 	  	174,683,285 
Loans, net of unearned income  	 	      328,264,524 	 	 303,732,044 
 Allowance for possible loan losses  	 	 (2,947,392) 	  	(2,926,063) 
      Net loans 	 	                     325,317,132 	 	 300,805,981 
Bank premises and equipment, at cost
 less allowance for depreciation 	 	 	 	 
 and amortization  	 	                    6,484,054 	 	   6,829,475 
Other assets 	 	                         15,229,641 	 	  15,094,426 
 	 	 	 	 
    TOTAL ASSETS 	                    $	531,324,557 	 $	525,329,674 

LIABILITIES 	 	 	 	 
 Deposits 	 	 	 	 
  Noninterest-bearing 	               $ 	65,035,976 	 $ 	75,589,511 
  Interest-bearing (including 
   certificates of deposit over
   $100,000:  1997 - $39,174,729;
   1996 - $39,129,547) 		               401,115,636 	 	 384,983,050 
      Total deposits 	 	                466,151,612 	 	 460,572,561 
  Federal funds purchased 	 	                - 	 	        5,000,000 
  Dividends payable 	 	                      - 	 	          714,000 
  Accounts payable and accrued 
   liabilities 	 	                        5,955,598 		    4,641,987 

    TOTAL LIABILITIES 	 	               472,107,210 	 	 470,928,548 

STOCKHOLDERS' EQUITY 	 	 	 	 
 Common stock - $10 par value, 
  authorized 4,000,000 shares; 	
  1,400,000 shares issued and  
  outstanding 	 	                        14,000,000 		   14,000,000 
 Retained earnings 	 	                   44,656,711 	 	  40,255,185 
 Net unrealized loss on 
  available-for-sale securities, 
  net of tax 	 	                            560,636 	 	     145,941 
    TOTAL STOCKHOLDERS' EQUITY 	 	       59,217,347 	   	54,401,126 
 	 	 	 	 
      TOTAL LIABILITIES AND  
       STOCKHOLDERS' EQUITY 	         $	531,324,557 	 $	525,329,674 

 	 	                                      UNAUDITED 	 	     (A) 
<FN>
<F1>
(A) The Consolidated Balance Sheet at December 31, 1996, has
been taken from the audited financial statements at that date. 
</FN>
</TABLE>

<PAGE>
<TABLE>
                 FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
                           CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
<CAPTION>
                                        THREE MONTHS ENDED 	 	         NINE MONTHS ENDED 
                                          September 30, 	 	             September 30, 
                                        1997      	 	  1996           1997  	 	      1996  
INTEREST INCOME 	 	 	 	 	 	 	 	 
<S>                                 <C>            <C>            <C>            <C>
 Interest and fees on loans 	       $	7,385,895 	  $	6,729,654 	  $21,348,749 	  $20,426,321 
 	 	 	 	 	 	 	 	 
 Interest on investment securities 	 	 	 	 	 	 	 	 
  Taxable interest 	 	                1,649,959 	 	  1,797,791 	 	  5,259,530 	 	  5,029,914 
  Exempt from federal income tax 	 	    617,155 	 	    599,862 	   	1,850,731 	 	  1,750,955 
  Dividends 	 	                          49,347 	 	     42,683 	 	    214,751 	 	    206,677 

                                   	 	2,316,461 	   	2,440,336 	 	  7,325,012 	 	  6,987,546 
 Other interest income 	 	               72,499 	 	     79,142 	 	    168,856 	 	    167,793 
 	 	 	 	 	 	 	 	 
   TOTAL INTEREST INCOME 	 	          9,774,855 	 	  9,249,132    	28,842,617 	 	 27,581,660 

INTEREST EXPENSE  	 	 	 	 	 	 	 	 
 Interest on deposits 	 	             4,348,349 	 	  4,244,544 	  	12,873,417 	 	 12,329,898 
 Interest on other short term 
  borrowings 	 	                         13,366 	 	     15,780	 	      77,208 	 	     72,871 

   TOTAL INTEREST EXPENSE 	 	         4,361,715 	 	  4,260,324 		  12,950,625 	 	 12,402,769 

   NET INTEREST INCOME 	 	            5,413,140 	    4,988,808 		  15,891,992 	 	 15,178,891 
 PROVISION FOR POSSIBLE LOAN LOSSES 	 	 550,000 	 	    200,000 		   1,290,000 	 	    750,000 

   NET INTEREST INCOME AFTER 	 	 	 	 	 	 	 	 
     PROVISION FOR LOAN LOSSES 	 	    4,863,140 		   4,788,808 	 	 14,601,992 	 	 14,428,891 

NONINTEREST  INCOME 	 	 	 	 	 	 	 	 
 Trust department income 	 	            372,711 	 	    343,492 	 	  1,093,218	 	   1,027,688 
 Service fees on deposits accounts 	 	  948,604 	 	    874,502 		   2,792,060 	 	  2,439,084 
 Other service fees 	 	                 225,312 	 	    198,620 	 	    590,132 		     552,585 
 Other operating income 	 	              76,233 	 	     83,914 	 	    310,545 		     286,249 
 Investment securities gains 
  (losses) 	 	                             - 	 	          - 		         (1,137) 	 	      - 

   TOTAL NONINTEREST INCOME 	 	       1,622,860 	 	  1,500,528	 	   4,784,818 	 	  4,305,606 
 	 	 	 	 	 	 	 	 
NONINTEREST  EXPENSES 	 	 	 	 	 	 	 	 
 Salaries and employee benefits 	 	   1,799,405 	 	  1,763,834 		   5,433,454 	 	  5,275,531 
 Net occupancy expense 	 	              344,343 	 	    315,973 	 	    958,588 		     918,020 
 Furniture and equipment expense 	 	    373,658 	 	    379,970 		   1,155,716 	 	  1,172,412 
 Other operating expenses 	 	         1,493,614 	 	  1,376,099 		   4,426,048 	 	  3,837,101 

   TOTAL NONINTEREST EXPENSES 	 	     4,011,020 		   3,835,876 	 	 11,973,806 	 	 11,203,064 

     INCOME BEFORE PROVISION FOR 	 	 	 	 	 	 	 	 
       INCOME TAXES 	 	               2,474,980 	 	  2,453,460	 	   7,413,004 	 	  7,531,433 

PROVISION FOR INCOME TAXES 	 	          917,613 	 	    694,636 	 	  2,269,478 		   2,248,614 

        NET INCOME  	               $	1,557,367 	  $	1,758,824 	  $	5,143,526 	  $	5,282,819 

EARNINGS PER COMMON SHARE 	 	 	 	 	 	 	 	 
 (1,400,000 outstanding shares) 	   $ 	    1.11 	  $ 	    1.26 	  $ 	    3.67	   $ 	    3.77 

</TABLE>

<PAGE>
<TABLE>

                FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                   NINE MONTHS  ENDED SEPTEMBER 30, 1997 and 1996
                                      (Unaudited)
              
<CAPTION>
                                      	 	                  1997  	 	     1996
OPERATING ACTIVITIES 	 	 	 	 

<S>                                                    <C>            <C>
 Net income 	                                          $	5,143,526   	$	5,282,819 
 Adjustments to reconcile net income to net 
  cash provided by operating activities 	 	 	 	 
   Excess (deficiency) of provision for possible 	 	 	 	 
    loan losses over net charge offs 	 	                    21,329 	   	  187,355 
   Provision for depreciation and amortization of 	 	 	 	 
    premises and equipment 	 	                             488,871   	 	  499,427 
   Provision for depreciation of leased equipment 	 	      625,800	   	   260,750 
   Amortization of deposit base intangibles 	 	            146,438 		     163,469 
   Amortization of investment security premiums, 	 	 	 	 
    net of accretion of discounts 	 	                      372,251   	 	  427,968 
   Donation of premises to municipalities 	 	                 - 	 	        88,500 
   Increase in cash surrender value of life insurance
    contracts 	 	                                         (108,348)   	 	 (75,382) 
   Deferred income taxes 	 	                               244,284 	 	   (118,511) 
   (Increase) decrease in 	 	 	 	 
    Interest receivable 	 	                               (467,532) 	   	(496,159) 
    Other assets 	 	                                      (467,321) 	 	   302,963 
   Increase (decrease) in 	 	 	 	 
    Interest payable 	 	                                   236,915   	 	 (317,103) 
    Other liabilities 	 	                                  997,126 	   	  638,139 

      TOTAL ADJUSTMENTS 	 	                              2,089,813   	 	1,561,416 

       NET CASH PROVIDED BY OPERATING ACTIVITIES 	      	7,233,339   	 	6,844,235 
 	 	 	 	 
INVESTING ACTIVITIES 	 	 	 	 

 Proceeds from maturities, calls, and sales of 	 	 	 	 
  available-for-sale securities 	 	                      8,174,197   	 	3,018,058 
 Proceeds from maturities and calls of 
  held-to-maturity securities 	 	                       25,498,811    	34,169,000 
 Purchases of investment securities 	 	 	 	 
  Available-for-sale 	 	                                (4,157,187)	  (42,072,588) 
  Held-to-maturity 	 	                                  (8,520,875)  	(28,151,942) 
 Net (increase) decrease  in loans 	 	                 (24,532,480) 		 (3,050,024) 
 Purchases of premises and equipment 	 	                  (143,450)   	 	(833,389) 
 Purchases of deposit base intangibles 	 	                    - 	 	    (1,124,258) 
 Purchase of leased equipment 	 	                             - 	 	    (2,346,750) 
 Purchase of single premium life insurance contracts 	   	(385,000) 	 	      - 

      NET CASH USED BY INVESTING ACTIVITIES 	          	(4,065,984) 	 (40,391,893) 

FINANCING ACTIVITIES 	 	 	 	 

 Net increase in noninterest-bearing and 
  interest-bearing deposits 	 	                          5,579,051 	 	 27,303,826 
 Assumption of deposit liabilities  	 	                       - 	 	    19,863,923 
 Net increase (decrease) in short term borrowings 		    (4,920,428)	 	(11,353,000) 
 Cash dividends 	 	                                     (1,456,000) 	 	(1,288,000) 
 	 	 	 	 
      NET CASH PROVIDED BY FINANCING ACTIVITIES 		        (797,377) 	 	34,526,749 
 	 	 	 	 
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	2,369,978 	 	    979,091 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 	 	    27,916,507 	  	31,281,706 

CASH AND CASH EQUIVALENTS AT END OF PERIOD 	           $30,286,485 	  $32,260,797 
</TABLE>
 	 	 	 	 


<PAGE>


	The unaudited consolidated financial statements have been
prepared on a consistent basis and in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for
a fair presentation have been included. These adjustments were
of a normal, recurring nature and consistent with generally
accepted accounting principles. For further information, refer
to the consolidated financial statements and footnotes included
in the Corporation's annual report on Form 10-K for the year
ended December 31, 1996.


<PAGE>
       Item 2.   Management's Discussion and Analysis of Financial Condition

Material Changes in Financial Condition

	Average earning assets increased 4.9% in the first nine months
of 1997 compared to a 7.1% increase in the first nine months of
1996.  As a financial institution, the Bank's primary earning
asset is loans.  At September 30, 1997, average net loans had
grown 6.9% and represented 65% of average earning assets. 
Average net loans began a period of growth in the first quarter
of 1996 showing a 4.6% growth that continued throughout last
year and this year.  Management believes this growth is
indicative of the strengthening of its presence in the four
county area in middle Tennessee that it serves. Average
investments represented 35% of average earning assets at
September 30, 1997, an increase of 1% in the first nine months
of 1997.  Average total assets were $527 million at the end of
the first nine months of 1997 compared to $497 million at the
end of the first nine months of 1996.  Period-end assets were
$531.3 million compared to $525.3 million at December 31, 1996. 
The Bank maintains a formal asset and liability management
process to control interest rate risk and assist management in
maintaining reasonable stability in the gross interest margin as
a result of changes in the level of interest rates and/or the
spread relationships among interest rates.  The Bank uses an
earnings simulation model to evaluate the impact of different
interest rate scenarios on the gross margin.  Each month, the
Asset/Liability Committee monitors the relationship of rate
sensitive earning assets to rate sensitive interest bearing
liabilities (interest rate sensitivity) which is the principal
factor in determining the effect that fluctuating interest rates
will have on future net interest income.  Rate sensitive earning
assets and interest bearing liabilities are those which can be
repriced to current market rates within a defined time period. 
The following sections analyze the average balance sheet and the
major components of the period-end balance sheet.


SECURITIES

	Available-for-sale securities are an integral part of the
asset/liability management process.  As such, they represent an
important source of liquidity available to fund loans and
accommodate asset reallocation strategies dictated by changes in
bank operating and tax plans, shifting yield spread
relationships, and changes in configuration of the yield curve. 
At September 30, 1997, the Corporation's investment securities
portfolio had $55.9 million available-for-sale securities and
$98.1 million held-to-maturity securities. This compares to
$56.1 available-for-sale securities and $118.5 million
held-to-maturity securities at December 31, 1996.


LOANS

	The loan portfolio is the largest component of earning assets
and consequently provides the highest amount of revenues.  The
loan portfolio also contains, as a result of credit quality, the
highest exposure to risk.  When analyzing potential loans,
management assesses both interest rate objectives and credit
quality objectives in determining whether to make a given loan
and the appropriate pricing for that loan.  The Bank maintains a
diversified portfolio in order to spread its risk and reduce its
exposure to economic downturns which may occur in different
segments of the economy or in particular industries.  The
average loan portfolio increased $20.1 million or 6.9% in the
first nine months of 1997 compared to a $12.2 million or 4.4%
increase in the first nine months of 1996.  This

<PAGE>

growth reflects the consistent loan demand in the service area.
Commercial loans showed strong growth posting over 7% growth,
personal loans declined slightly, but loans secured by real estate
posted a 9% growth for the first nine months of 1997.  An
asset/liability strategic decision to keep higher quality bank
customer loans secured by residential real estate in the
portfolio rather than sell them in the secondary market
contributed to the increase in this type of loans.

	The Corporation's subsidiary loan review function reviews lines
of credit over $50,000.  After this review during the first nine
months of 1997, loans totaling $3.7 million, 1.1% of the
portfolio, were classified as other assets especially mentioned
at September 30, 1997, which is down from the $4.6 million so
classified at June 30, 1997, but up from $3.4 million at
December 31, 1996.  Loans totaling $7.4 million, 2.3% of the
portfolio, were classified as substandard at September 30, 1997,
compared to $4.3 million and $8.2 million so classified at June
30, 1997, and December 31, 1996.  Loans totaling $1.6 million,
 .5% of the portfolio, were classified as doubtful at September
30, 1997, compared to $1.7 million and $1.4 million at June 30,
1997, and December 31, 1996.  Any loans classified for
regulatory purposes as loss, doubtful, substandard, or special
mention do not represent or result from trends or uncertainties
which management reasonably expects will materially affect
operating results, liquidity, or capital resources.  Neither do
such loans represent material credits about which management is
aware of any information which causes management to have serious
doubts as to the ability of such borrowers to comply with the
loan repayment terms.  Management is not aware of any known
trends, events or uncertainties that will have or that are
reasonably likely to have a material effect on the corporation's
liquidity, capital resources or operations.  Loans having
recorded investments of $6.9 million, 2.1% of the total
portfolio, were identified as impaired at the end of the first
nine months of 1997 compared to $5.5 million and $5.1 million at
June 30, 1997, and December 31, 1996 respectively.


DEPOSITS

	The Corporation's subsidiary bank does not have any foreign
offices and all deposits are serviced in its sixteen domestic
offices, the newest of which opened during the first week of
1997.  The bank's average deposits grew during the first nine
months of 1997 reflecting a 4.4% growth compared to a 7.3%
growth in the first nine months of 1996, of which over 67% was
due to an acquisition of deposits in the second quarter of 1996.
Short and medium term rates remained competitive compared to
longer term rates contributing to a 5.3% growth in average
interest-bearing transaction accounts and almost no growth in
certificates of deposits less than $100,000 during the first three
quarters of 1997. Savings deposits with limited transactions
increased 15.7% during the first nine months of 1997.  Savings
deposits have been strong historically providing a core, low
cost, source of funding.  Certificates of deposit over $100,000
increased 8.3% in the first nine months of 1997.


CAPITAL

 	Average shareholders' equity remained strong totaling $57.0
million at September 30, 1997, a 9.6% increase from 1996 year
end.  The Corporation and the Bank are subject to federal
regulatory risk-adjusted capital adequacy standards.  Failure to
meet capital adequacy requirements can initiate certain mandatory, 
and possibly additional discretionary, actions by regulators
that could have a direct material effect on the consolidated 
financial statements of the Corporation and its subsidiary, the

<PAGE>

Bank.  The regulations require the Bank to meet specific capital 
adequacy guidelines that involve quantitative measures of assets, 
liabilities, and certain off-balance-sheet items as calculated 
under regulatory accounting practices.  The capital classification
is also subject to qualitative judgments by the regulators 
about components, risk weightings, and other factors. 

		Quantitative measures established by regulation to ensure
capital adequacy require the Corporation and the Bank to
maintain minimum amounts and ratios of Total Capital and Tier I
Capital to risk-weighted assets and of average Tier I Capital to
average assets. Equity capital (net of certain adjustments for
intangible assets and investments in non-consolidated
subsidiaries and certain classes of preferred stock are
considered Tier 1 ("core") capital.  Tier 2 ("total") capital
consists of core capital plus subordinated debt, some types of
preferred stock, and varying amounts of the Allowance for
Possible Loan Losses.  The minimum standard for a "well
capitalized" bank is a risk-based core capital ratio of 6%, a
risk-based total capital ratio of 10%, and a core capital to
average total assets ratio of 5%.  As of September 30, 1997, the
Bank's total risk-based and core capital ratios were 19.3% and
18.4% respectively.  The comparable ratios were 18.6% and 17.6%
at year end, 1996.   As of September 30, 1997, the Corporation's
total risk-based and core capital ratios were 19.5% and 18.6%
respectively.  The comparable ratios were 18.7% and 17.7% at
year end, 1996.  At September 30, 1997, the Bank and the
Corporation had a ratio of average core capital to average total
assets of 10.5% and 10.5%, respectively, compared to 10.1% and
10.4% at December 31, 1996.  Management believes, as of
September 30, 1997, that the Corporation and the Bank meet all
capital adequacy requirements to which they are subject.  The
Bank's calculated risk-adjusted capital ratios exceeded the
minimum standard for a "well capitalized" bank.  Most of the
capital needs of the Bank have historically been financed
through internal growth. 


Material Changes in Results of Operations

 	Total interest income was 4.6% higher in the first nine months
of 1997 than the first nine months of 1996.  Interest and fees
earned on loans increased 4.5% despite a fourteen basis point
shortfall in average yield compared to budget.  Interest earned
on investment securities and other investments increased 4.7% 
during the first nine months of 1997 but is less than budget due
almost entirely to the use of maturing securities to fund the
increased loan volume.

	Total interest expense increased 4.4% in the first nine months
of 1997 compared to the first nine months of 1996, but is under
budget due mostly to the lower cost of  interest-bearing
deposits than was predicted.  The total cost of interest-bearing
deposits has remained steady all last year and this year under
monthly monitoring by the Asset/Liability Committee.  As a
policy, budgeted financial goals are monitored on a monthly
basis by the Asset/Liability Committee where the actual dollar
change in net interest income given different interest rate
movements is reviewed.  A negative dollar change in net interest
income for a twelve month period of less than 3% of net interest
income given a three hundred basis point shift in interest rates
is considered an acceptable rate risk position.  The net
interest margin, on a tax equivalent basis, at September 30,
1997 and 1996 was 4.6% and 4.8%, respectively .

 	Net interest income on a fully taxable equivalent basis is
influenced primarily by changes in:  (1) the volume and mix of
earning assets and sources of funding; (2) market rates of
interest, and (3) income tax rates.  The impact of some of 
these factors can be controlled by management policies and 


<PAGE>


actions. External factors also can have a significant impact 
on changes in net interest income from one period to another.  
Some examples of such factors are: (1) the strength of credit 
demands by customers; (2) Federal Reserve Board monetary policy, 
and (3) fiscal and debt management policies of the federal 
government, including changes in tax laws. 

	The analysis and review of asset quality by the Corporation's
subsidiary loan review function and credit administrator also
includes a formal review that is prepared quarterly to assess
the risk in the loan portfolio and to determine the adequacy of
the allowance for loans losses.  This review supported
management's assertion that the allowance was adequate at
September 30, 1997.  Additions to the allowance during the first
nine months of 1997 were higher than the first nine months of
1996 due almost entirely to a consumer loan underwriting problem
that has been corrected.

	There were no write downs of other real estate associated with
declines in real estate values subsequent to foreclosure and
disposition of the properties at less than their carrying value
during the first three quarters of 1997.  The carrying value of
Other Real Estate is included in other assets on the face of the
balance sheet and represents real estate acquired through
foreclosure and is stated at the lower of cost or fair value
minus cost to sell.  An allowance for other real estate owned is
not maintained.  Historically, and at the present time, parcels
have not remained in this category for long periods of time and
any decreases or losses associated with the properties have been
charged to current income. Management evaluates properties
included in this category on a regular basis.  Actual
foreclosures were included in the carrying value for Other Real
Estate at September 30, 1997, and totaled $497 thousand which
compares to $462 thousand at September 30, 1996.

	Noninterest income increased 11.1% during the first nine months
of 1997 led by the over 14% increase in service fees from new
and acquired customers.  Use of the Bank's check card generates
fee income from the clearing agent for the electronic
transaction even though no service fee is charged to Bank
customers for its use.  Income from fiduciary services provided
in the Bank's Trust Department remained strong, increasing 6.8%. 

	Noninterest expenses, excluding the provision for possible loan
losses, increased 6.9% in the first nine months of 1997.  A new
branch office, opened in the first quarter of 1997, technology
communication expenses, and depreciation of leased equipment are
the main increases.

	Net income is 2.6% less for the first nine months of 1997
compared to the first nine months of 1996.  The increase in
interest income was large enough to more than offset the
increase in interest expense.  The remaining increase in
interest income coupled with the strong increase in noninterest
income was sufficient to cover the increase in noninterest
expense and some of the increase in additions to the allowance for 
loan and lease losses.

	In February, 1997, the Financial Accounting Standards board
issued Statement No. 128, "Earnings per Share", which is
required to be adopted on December 31, 1997.  At that time, the
Corporation will be required to change the method currently used
to compute earnings per share and to restate all prior periods. 
As the Corporation has only one class of stock and does not
issue options, warrants, and convertible securities, there will
be no impact on the calculation of earnings per share.

<PAGE>

SIGNATURES


	Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.



                    FIRST FARMERS AND MERCHANTS CORPORATION
                                  (Registrant)




Date  November 13, 1997        		        /s/ Waymon L. Hickman            
                                     								Waymon L. Hickman,
                                   								Chairman of the Board
                        							          (Chief Executive Officer)


Date  November 13, 1997       		        /s/ Patricia N. McClanahan        
                                    								Patricia N. McClanahan,
                                         									Treasurer
                          							        (Principal Accounting Officer)