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, 1996  
                       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, 1996.    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, 1996, are as follows:

	   Consolidated balance sheets - September 30, 1996, and December 31, 1995


	   Consolidated statements of income - For the three months and
    nine months ended September 30, 1996, and September 30, 1995


   	Consolidated statements of cash flows - For the nine months
    ended	September 30, 1996, and September 30, 1995


<PAGE>

        FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY          
                      CONSOLIDATED BALANCE SHEETS
               SEPTEMBER 30, 1996 and DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS        				                                   1996  		           1995

<S>                                           <C>                <C>
Cash and due from banks 		       	            $  	27,960,797 	   $  	31,281,706 
Federal funds sold 				                            4,300,000 		          - 
Securities 						
  Available for sale (amortized cost
   $49,802,954 and $10,875,527 respectively) 				 49,389,193 		      11,269,006 
  Held to maturity (fair value $121,330,880 
   and $128,829,961 respectively) 				           121,344,759 		     127,662,682 
       Total securities 				                     170,733,952 		     138,931,688 
Loans, net of unearned income  				              294,980,335 		     291,930,311 
  Allowance for possible loan losses  				        (2,865,741)      	 (2,678,386) 
       Net loans 				                            292,114,594 		     289,251,925 
Bank premises and equipment, at cost less
  allowance for depreciation and amortization  				6,643,398 		       6,397,936 
Other assets 				                                 14,928,769 		      11,171,993 
						
     TOTAL ASSETS 			                         $ 	516,681,510 	   $ 	477,035,248 

LIABILITIES 						
  Deposits 						
    Noninterest-bearing 			                   $  	67,509,695 	   $  	67,420,536 
    Interest-bearing (including certificates
      of deposit over $100,000: 
      1996 - $36,086,098 1995 - $30,593,803) 				390,436,115 		     343,357,525 
       Total deposits 				                       457,945,810 		     410,778,061 
  Federal funds purchased 				                        - 		           10,000,000 
  Dividends payable 				                              - 		              630,000 
  Accounts payable and accrued liabilities 				    5,598,748        		6,630,712 

     TOTAL LIABILITIES 				                      463,544,558 		     428,038,773 

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 				                          39,385,209 		      34,760,389 
  Net unrealized loss on available-for-sale
    securities, net of tax 				                     (248,257) 		        236,086 
     TOTAL STOCKHOLDERS' EQUITY 				              53,136,952         48,996,475 

     TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY                                 $ 	516,681,510 	   $ 	477,035,248 
                                              				UNAUDITED 		          (A) 
<FN>
<F1>
(A) The Consolidated Balance Sheet at December 31, 1995, 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, 		 
                                               		 1996 	        1995  		           1996  		      1995  
INTEREST INCOME 								
<S>                                          <C>           <C>                <C>           <C>
  Interest and fees on loans	                $ 	6,729,654 	$ 	6,619,392 	     $ 20,426,321 	$ 19,030,696 

  Interest on investment securities 								
    Taxable interest 		                         1,797,791 		  1,511,801 		       5,029,914		   4,739,324 
    Exempt from federal income tax 		             599,862 	    	539,137		        1,750,955 		  1,619,024 
    Dividends 		                                   42,683 		     41,895 		         206,677 		    136,080 
                                              		2,440,336 		  2,092,833 		       6,987,546 		  6,494,428 
  Other interest income 		                         79,143 		      7,987 		         167,793 		     80,085 
								
     TOTAL INTEREST INCOME 		                   9,249,133 		  8,720,212		       27,581,660 		 25,605,209 

INTEREST EXPENSE  								
  Interest on deposits 		                       4,244,544 		  3,897,170 		      12,329,898		  11,297,793 
  Interest on other short term borrowings 		       15,780 		     41,430		           72,871 		    151,886 

     TOTAL INTEREST EXPENSE 		                  4,260,324 		  3,938,600		       12,402,769 		 11,449,679 
								
     NET INTEREST INCOME 		                     4,988,809 		  4,781,612		       15,178,891 		 14,155,530 

PROVISION FOR POSSIBLE LOAN LOSSES 		             200,000 		    180,000 		         750,000		     465,000 

     NET INTEREST INCOME AFTER 								
       PROVISION FOR LOAN LOSSES 		             4,788,809		   4,601,612 		      14,428,891 		 13,690,530 

NONINTEREST  INCOME 								
  Trust department income 		                      343,492 		    256,724 		       1,027,688		     926,143 
  Service fees on deposits accounts 		            874,501 		    682,633		        2,439,084 		  1,949,693 
  Other service fees 		                           198,621 		    100,732 		         552,585 		    210,305 
  Other operating income 		                        83,913 		     83,437 		         286,249		     249,107 
  Investment securities gains (losses) 	 	           - 		         3,530 		            - 		         1,182 

     TOTAL NONINTEREST  INCOME 		               1,500,527 		  1,127,056		        4,305,606 		  3,336,430 

NONINTEREST  EXPENSES 								
  Salaries and employee benefits 		             1,763,834 		  1,669,796		        5,275,531 		  4,908,260 
  Net occupancy expense 		                        315,973 		    316,028 		         918,020		     910,608 
  Furniture and equipment expense 		              379,970 		    324,315		        1,172,412 		    997,937 
  Loss on other real estate 		                       - 	 	         - 	 	              - 	 	       50,724 
  Other operating expenses 		                   1,376,099 		  1,247,383		        3,837,101 		  3,939,467 
								
     TOTAL NONINTEREST EXPENSES 		              3,835,876 		  3,557,522		       11,203,064 	  10,806,996 

       INCOME BEFORE PROVISION FOR 								
         INCOME TAXES 		                        2,453,460 		  2,171,146		        7,531,433 		  6,219,964 

PROVISION FOR INCOME TAXES 		                     694,636 		    680,609 		       2,248,614		   1,783,034 

           NET INCOME  	                     $ 	1,758,824  $ 	1,490,537 	     $ 	5,282,819 	$ 	4,436,930 
EARNINGS PER COMMON SHARE 								
  (1,400,000 outstanding shares) 	           $ 	     1.26 	$ 	     1.06 	     $ 	     3.77	 $ 	     3.17 
</TABLE>

<PAGE>
<TABLE>
                         FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                              NINE MONTHS  ENDED SEPTEMBER 30, 1996 and 1995
                                                  (Unaudited)
<CAPTION>
		                                                     1996   		       1995  
OPERATING ACTIVITIES 				
<S>                                              <C>             <C>
 Net income 	                                    $ 	5,282,819 	  $ 	4,436,930 
 Adjustments to reconcile net income to net 
  cash provided by operating activities 				
   Excess of provision for possible 				
    loan losses over net charge offs 		               187,355 		      270,282 
   Provision for depreciation and amortization 
    of premises and equipment 		                      499,427 		      484,654 
   Amortization of deposit base intangibles 		        163,469		       126,015 
   Amortization of investment security premiums, 				
    net of accretion of discounts 		                  427,968 		      313,505 
   Donation of premises to municipalities 		           88,500 		         - 
   Increase in cash surrender value of life
    insurance contracts 		                            (75,382) 		     (50,785) 
   Deferred income taxes 		                          (118,511) 		    (106,248) 
   (Increase) decrease in 				
     Interest receivable 		                          (496,159) 		    (396,882) 
     Other assets 		                                  563,713 		    1,123,463 
   Increase (decrease) in 				
     Interest payable 		                             (317,103) 		     260,517 
     Other liabilities 		                             638,139 		      698,886 
				
     TOTAL ADJUSTMENTS 		                           1,561,416 		    2,723,407 

     NET CASH PROVIDED BY OPERATING ACTIVITIES    		6,844,235 		    7,160,337 

INVESTING ACTIVITIES 				

 Proceeds from maturities, calls, and sales of 				
  available-for-sale securities 		                  3,018,058 		    7,210,554 
 Proceeds from maturities and calls of 
  held-to-maturity securities 		                   34,169,000 		   14,748,992 
 Purchases of investment securities 				
  Available-for-sale 		                           (42,072,588) 		  (3,143,100) 
  Held-to-maturity 		                             (28,151,942) 		  (3,251,618) 
 Net (increase) decrease  in loans 		              (3,050,024)		  (24,458,768) 
 Purchases of premises and equipment 		              (833,389) 		    (513,529) 
 Purchases of deposit base intangibles 		          (1,124,258) 		        - 
 Purchase of leased equipment, net of 
  depreciation 		                                  (2,346,750) 		        - 
				
     NET CASH USED BY INVESTING ACTIVITIES      		(40,391,893) 		  (9,407,469) 

FINANCING ACTIVITIES 				

 Net increase in noninterest-bearing and
  interest-bearing deposits 		                     27,303,826 		    5,102,509 
 Assumption of deposit liabilities  		             19,863,923 		         - 
 Net increase (decrease) in short term 
  borrowings                                    		(11,353,000) 		  (5,200,000) 
 Cash dividends 		                                 (1,288,000) 		  (1,176,000) 

     NET CASH PROVIDED BY FINANCING ACTIVITIES	   	34,526,749 		   (1,273,491) 

     INCREASE (DECREASE) IN CASH AND CASH 
       EQUIVALENTS                                  		979,091 		   (3,520,623) 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 		31,281,706    		26,735,526 

CASH AND CASH EQUIVALENTS AT END OF PERIOD 	     $	32,260,797 	  $	23,214,903 
</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.  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, 1995.

<PAGE>

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

Material Changes in Financial Condition

	Average total assets were $497 million at the end of the first
nine months of 1996 compared to $464 million at the end of the
first nine months of 1995.  Period-end assets were $516 million
compared to $477 million at December 31, 1995, and $465 at
September 30, 1995.  The bank purchased certain assets and
assumed certain deposit liabilities of the Mt. Pleasant, Maury
County, Tennessee, and Lewisburg, Marshall County, Tennessee,
branches of Union Planters Bank of Middle Tennessee, National
Association, Nashville, Tennessee, effective as of April 1,
1996. The following sections analyze the average balance sheet
and the major components of the period-end balance sheet.


SECURITIES

	At September 30, 1996, the Corporation's investment securities
portfolio had  $49.3 million available-for-sale securities and
$121.3 million held-to-maturity securities.  This compares to
$11.2 and $11.0 million available-for-sale securities and $127.6
and $128.6 million held-to-maturity securities at December 31,
1995, and September 30, 1995, respectively.  The
available-for-sale securities, at 29% of the current portfolio,
are managed as an integral part of the asset/liability
management process.  They are 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.  Items held for these purposes
were classified as "available-for-sale" after the adoption of
Financial Accounting Standards No. 115 (SFAS 115), "Accounting
for Certain Investments in Debt and Equity Securities", and are
reported at fair value, with unrealized gains and losses
excluded from earnings and reported as a separate component of
stockholders' equity.  Net unrealized losses on
available-for-sale securities were $414 thousand at September
30, 1996.  The management of the Corporation's subsidiary bank
has the positive intent and ability to hold to maturity the 71%
balance of the portfolio and these securities are reported at
amortized cost.  The liquidity portion of the current portfolio
is over three times larger than it was at year end and at the
end of the third quarter last year.  The liquidity portion of
the securities portfolio had declined during the first three
quarters of 1995 because those funds were used to fund expanding
loan growth.


LOANS

	The average loan portfolio of the Corporation's subsidiary
increased $12 million or 4.4% in the first nine months of 1996
compared to a $25 million or 10.1% increase in the first nine
months of 1995.  Loan demand in the service area has declined
during 1996 due in part to the decline in the number of small
businesses in the area.  Merger activity and the change in the 
type of businesses operating in the area have contributed to the
decline in the number of small businesses in the market.
Personal loans posted the largest increase, 15.5% during the
first three quarters of 1996.  Commercial loans increased 9.5%
during the first three quarters of 1996, while loans secured by
real estate actually declined.


<PAGE>

	The Corporation's subsidiary loan review function and Special
Assets Committee reviewed approximately 42 % of the average
dollar value of the loan portfolio during the first nine months
of 1996.  After this review, loans totaling $3.3 million, 1.2%
of the portfolio, were classified as other assets especially
mentioned at September 30, 1996, which is up from the $2.1
million so classified at December 31, 1995.  Loans totaling $8.7
million, 3.0% of the portfolio, were classified as substandard
at September 30, 1996, compared to $10.9 million so classified
at December 31, 1995.  Loans totaling $1.6 million, .6% of the
portfolio, were classified as doubtful at September 30, 1996,
compared to $2.7 million at December 31, 1995.  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.  Loans having
recorded investments of $6.3 million, 2.2% of the total
portfolio, have been identified as impaired at the end of the
first nine months of 1996 compared to $5.9 million and $5.5
million at December 31, 1995 and September 30, 1995,
respectively.  A loan is considered impaired when it is probable
that all amounts due (principal and interest) according to the
contractual terms of the loan agreement will not be collected. 
The extent of impairment is evaluated by the loan review
function and the Special Assets Committee and included in the
appropriate category to monitor.


DEPOSITS

	Average deposits of the Corporation's subsidiary were $439.2
million for the first nine months of 1996 compared to $409.5 and
$408.4 for the year ended December 31, 1995 and for the first
nine months of 1995, respectively.  Over half of the increase in
the current year came from the purchase and assumption of $19.8
million in deposits from Union Planters Bank of Middle
Tennessee, as discussed in the beginning of this section.  Short
and medium term rates were more competitive compared to longer
term rates during the first half of 1996 and some depositors
moved money back into interest-bearing checking accounts, which
increased 4.8% during the first nine months of 1996. 
Approximately one fourth of this growth in interest-bearing
checking accounts can be attributed to the purchase and
assumption transaction.  Longer term interest-bearing products
like certificates had enjoyed more attractive rates during much
of 1995 when interest-bearing checking accounts had decreased
8.9% during the year ended December 31, 1995.  Certificates of
deposit under $100,000 increased 10.8%, certificates of deposit
over $100,000 increased 4.1%, and savings deposits increased
5.6% during the first nine months of 1996.  The overall increase
in non-transaction interest-bearing accounts was 8.3% for the
nine months ended September 30, 1996.  Over 70% of this increase
can be attributed to the purchase and assumption transaction.  


CAPITAL

 	Average shareholders' equity was $51.2 million at September
30, 1996, compared to $46.7 million at December 31, 1995, an
increase of 9.7% including the equity portion of the net
unrealized loss on available-for-sale securities and 9.9%
without considering the unrealized loss.  This compares to an 
increase of 10.2% during the first nine months of 1995 both with 
and without the related net unrealized gains or losses on 
available-for-sale securities. Most of the capital 

<PAGE>

needs of the Corporation's subsidiary bank have 
historically been financed through internal growth. 

	At September 30, 1996, the Corporation had an equity capital to
asset ratio of 10.3% compared to a 10.1% ratio at December  31,
1995 and a 10.0% ratio at September 30, 1995.  At the close of
the first nine months of 1996, additional dividends of
approximately $13 million to the Corporation could have been
declared by the subsidiary bank without regulatory agency
approval.

		Regulatory risk-adjusted capital adequacy standards require
certain levels of capital when compared to total assets weighted
by risk category.  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 capital consists of
subordinated debt, some types of preferred stock, and varying
amounts of the Allowance for Possible Loan Losses and is added
to core capital to get total capital.  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, 1996,
the Bank's risk-based core and total capital ratios were 17.3%
and 18.2% respectively.  The comparable ratios were 16.8% and
17.7% at year end, 1995.  At September 30, 1996, the Bank had a
ratio of average core capital to average total assets of 10.0%
compared to 9.9% at December 31, 1995.


Material Changes in Results of Operations

	During the first nine months of 1996, the Corporation's
consolidated income totaled $5.3 million compared to $4.4
million for the first nine months of 1995.  The Corporation's
total interest income during the first nine months of 1996 was
$27.6 million compared to $25.6 million during the first nine
months of 1995.  This was an increase of 7.7%.  Loan income was
up 7.3%, while investment income showed an increase of 8.8%


Interest expense increased 8.3% during the first nine months of
1996.  The net interest margin (tax equivalent net interest
income divided by average earning assets annualized) for the
nine months ended September 30, 1996, was 4.8%, compared to 4.8%
at December 31, 1995, and 4.8% for the corresponding period in
1995.


	The provision for loan losses was $750,000 for the first nine
months of 1996 compared to $465,000 for the first nine months of
1995, which was a 61.3% increase.  The amount of the additions
to the allowance for loan losses charged to operating expenses
is based on the  evaluation of the impairment of loans by Loan
Review, the Special Assets Committee, and the Credit
Administrator.  Net charge offs for the first nine months of
1996 were $562 thousand compared to net charge offs of $195
thousand for the first nine months of 1995.  The ratio of net
charge offs to net average loans outstanding has been less than
 .5% for the last five years and below the usual ratio for the
industry.

	Other real estate, which is included in other assets, represents 
real estate acquired through foreclosure and is stated at the lower 
of cost or fair value minus estimated cost to sell.  If, at the 
time of foreclosure, the fair value of the real estate is less than 
the Bank's carrying value of the

<PAGE>

related loan, a write-down is recognized through a charge to the
allowance for possible loan losses, and the fair value becomes
the new cost for subsequent accounting.  If the Bank later
determines that the cost of the property cannot be recovered
through sale or use, a write-down is recognized by a charge to
operations.  There were no such write downs of other real estate
during the first nine months of 1996 compared to write downs of
$51 thousand during the first nine months of 1995.  Management
evaluates properties included in this category on a regular
basis.  Actual foreclosures included in the carrying value for
Other Real Estate at September 30, 1996, total $462 thousand
which compares to $483 thousand and $500 thousand at December
31, 1995, and September 30, 1995, respectively.

	Non-interest income increased 29.1% during the first nine
months of 1996 compared to the same period of 1995.  Other
service fees which includes fee income from sales of mortgage
loans in the secondary market and lease income has more than
doubled.  Non-interest expense increased 3.7% during the first
nine months of 1996 compared to the same period of 1995.  The
largest increase was in furniture and equipment expense which
increased 17.5%. 

<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 14, 1995        			      /s/ Waymon L. Hickman 
                                          								 Waymon L. Hickman,
                                              									President
                                      								(Chief Executive Officer)



Date         November 14, 1995                /s/ Patricia N. McClanahan       
                                          								Patricia N. McClanahan,
                                               									Treasurer
                                      								(Principal Accounting Officer)