First Financial Bankshares Announces Fourth Quarter Earnings Results And 27th Year Of Consecutive Earnings Growth

Jan 23, 2014, 16:00 ET from First Financial Bankshares, Inc.

ABILENE, Texas, Jan. 23, 2014 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the fourth quarter of 2013 of $21.24 million, up 15.94 percent compared with earnings of $18.32 million in the same quarter last year.  Basic earnings per share were $0.66 for the fourth quarter of 2013 compared with $0.58 in the same quarter a year ago.

All amounts for the fourth quarter and the year ended December 31, 2013 include the results of the Company's acquisition of Orange Savings Bank, SSB, Orange, Texas, which was effective on May 31, 2013. As of the acquisition date, Orange had total loans of $293.29 million and total deposits of $385.95 million.

Net interest income for the fourth quarter of 2013 increased 20.48 percent to $46.69 million compared with $38.75 million in the same period of 2012. The net interest margin, on a taxable equivalent basis, was 4.27 percent compared with 4.17 percent in the same quarter last year and 4.25 percent in the third quarter of this year. Included in interest income for the fourth quarter of 2013 was $412 thousand, or three basis points in net interest margin, related to discount accretion from fair value accounting related to our Orange and Huntsville acquisitions.   

The provision for loan losses was $1.17 million in the fourth quarter of 2013 compared with $642 thousand in the same quarter last year and $1.35 million in the third quarter of this year, primarily due to continued loan growth. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.16 percent at December 31, 2013, compared with 1.09 percent at September 30, 2013, and 1.22 percent at December 31, 2012.  Classified loans totaled $84.24 million at December 31, 2013, compared to $81.67 million at September 30, 2013, and $67.14 million at December 31, 2012. The increase in dollar amount of classified loans from prior year amounts was primarily a result of the Orange Savings Bank, SSB acquisition.

Noninterest income increased 5.65 percent in the fourth quarter of 2013 to $15.79 million compared with $14.95 million in the same quarter a year ago. Trust fees increased to $4.43 million in the fourth quarter of 2013 compared with $3.62 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.36 billion from $2.85 billion a year ago along with additional oil and gas activity. ATM, interchange and credit card fees increased 11.99 percent to $4.44 million compared with $3.96 million in the same quarter last year.  There was no gain or loss on securities sold during the fourth quarter of 2013 compared to a gain of $565 thousand in the same quarter of 2012. Service charges on deposit accounts rose to $4.54 million in the fourth quarter of 2013 compared to $4.43 million in the same period of 2012.

Noninterest expense increased in the fourth quarter of 2013 to $33.10 million from $28.63 million in the same quarter last year. The Company's efficiency ratio in the fourth quarter of 2013 was 49.42 percent compared with 49.86 percent in the same quarter last year. Included in noninterest expense in the fourth quarter of 2013 were conversion related costs totaling $300 thousand related to the Company's recent acquisition of Orange. Also included in noninterest expense in the fourth quarter of 2013 were salary and employee benefit costs of $17.63 million, an increase of 17.50 percent when compared to $15.01 million in the same quarter a year ago, primarily driven by an increase in personnel from the Orange acquisition and increased profit sharing expenses.

For the year, net income increased 6.26 percent to $78.87 million from $74.23 million in 2012, marking 2013 as the 27th consecutive year of earnings increases for the Company. Basic earnings per share in 2013 rose to $2.48 for the year from $2.36 in the previous year.

Net interest income increased 11.38 percent for the year to $172.28 million from $154.68 million a year ago. The provision for loan losses for 2013 totaled $3.75 million compared with $3.48 million in the previous year. Noninterest income was $62.05 million for the year of 2013 compared with $57.21 million a year ago. Noninterest expense rose in 2013 to $126.01 million compared with $109.05 million in 2012.

As of December 31, 2013, consolidated assets for the Company totaled $5.22 billion compared with $4.50 billion a year ago. Loans totaled $2.69 billion at year end compared with loans of $2.09 billion a year ago, a 28.77 percent growth. Total deposits grew 13.83 percent to $4.14 billion at year end compared to $3.63 billion at the end of 2012.  Shareholders' equity rose to $587.65 million as of December 31, 2013, compared with $556.96 million in the prior year. 

"We were very pleased with our financial results for the fourth quarter and the year especially in light of a continued stagnant national economy, very low interest rates and the conversion costs from our Orange acquisition," said F. Scott Dueser, Chairman, President and CEO. "We continue to look for additional acquisitions which will fit our culture and bring additional earnings and increased shareholder value."

About First Financial Bankshares Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 60 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Mauriceville, Merkel, Midlothian, Mineral Wells, Moran, Newton, Odessa, Orange, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Stephenville, Sweetwater, Trent, Trophy Club, Vidor, Waxahachie, Weatherford and Willow Park. The Company also operates First Financial Trust & Asset Management Company, N.A., with seven locations and First Technology Services, Inc., a technology operating company.

The Company is listed on The NASDAQ Global Select Market under the trading symbol FFIN.  For more information about First Financial Bankshares, please visit our website at http://www.ffin.com.

Certain statements contained herein may be considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995.  These statements are based upon the belief of the Company's management, as well as assumptions made beyond information currently available to the Company's management, and may be, but not necessarily are, identified by such words as "expect", "plan", "anticipate", "target", "forecast" and "goal".  Because such "forward-looking statements" are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.  Factors that could cause actual results to differ materially from the Company's expectations include competition from other financial institutions and financial holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the  Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses, and similar variables.  Other key risks are described in the Company's reports filed with the Securities and Exchange Commission, which may be obtained under "Investor Relations-Documents/Filings" on the Company's Web site or by writing or calling the Company at 325.627.7155.  Except as otherwise stated in this news announcement, the Company does not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.

 

FIRST FINANCIAL BANKSHARES, INC.

CONSOLIDATED FINANCIAL SUMMARY  (UNAUDITED) 

(In thousands, except share and per share data)

As of

2013

2012

ASSETS:

Dec. 31, 

Sept. 30, 

June 30, 

Mar. 31, 

Dec. 31, 

Cash and due from banks

$

183,084

$

164,666

$

138,087

$

113,958

$

207,018

Interest-bearing deposits in banks

25,498

48,634

6,624

20,065

139,676

Interest-bearing time deposits in banks

31,917

34,352

39,350

45,172

49,005

Fed funds sold

3,430

14,300

16,025

3,175

14,045

Investment securities

2,058,407

1,976,101

1,975,490

1,959,054

1,820,096

Loans

2,689,448

2,614,809

2,578,883

2,138,137

2,088,623

Allowance for loan losses

(33,900)

(34,800)

(34,099)

(34,672)

(34,839)

Net loans

2,655,548

2,580,009

2,544,784

2,103,465

2,053,784

Premises and equipment

95,505

94,676

94,808

86,265

84,122

Goodwill

94,882

94,882

94,882

71,865

71,865

Other intangible assets

2,603

2,547

2,366

98

108

Other assets

71,334

65,468

70,189

52,863

62,293

Total assets

$

5,222,208

$

5,075,635

$

4,982,605

$

4,455,980

$

4,502,012

LIABILITIES AND SHAREHOLDERS'  EQUITY:

Noninterest-bearing deposits

$

1,362,184

$

1,371,835

$

1,305,049

$

1,237,840

$

1,311,708

Interest-bearing deposits

2,772,891

2,628,722

2,612,540

2,312,286

2,320,876

Total deposits

4,135,075

4,000,557

3,917,589

3,550,126

3,632,584

Short-term borrowings

463,888

466,500

431,575

263,345

259,697

Other liabilities

35,598

40,337

57,577

78,257

52,768

Shareholders' equity

587,647

568,241

575,864

564,252

556,963

Total liabilities and shareholders' equity

$

5,222,208

$

5,075,635

$

4,982,605

$

4,455,980

$

4,502,012

Quarter Ended

2013

2012

INCOME STATEMENTS

Dec. 31, 

Sept. 30, 

June 30, 

Mar. 31, 

Dec. 31, 

Interest income

$

47,756

$

46,655

$

42,446

$

39,575

$

39,801

Interest expense

1,066

1,164

946

904

1,049

Net interest income

46,690

45,491

41,500

38,671

38,752

Provision for loan losses

1,171

1,349

832

401

642

Net interest income after provision for loan losses

45,519

44,142

40,668

38,270

38,110

Noninterest income

15,792

17,075

15,153

13,960

14,948

Noninterest expense

33,096

35,534

29,911

27,471

28,633

Net income before income taxes

28,215

25,683

25,910

24,759

24,425

Income tax expense

6,977

6,121

6,420

6,182

6,107

Net income

$

21,238

$

19,562

$

19,490

$

18,577

$

18,318

PER COMMON SHARE DATA 

Net income - basic

$

0.66

$

0.61

$

0.62

$

0.59

$

0.58

Net income - diluted

0.66

0.61

0.61

0.59

0.58

Cash dividends declared

0.26

0.26

0.26

0.25

0.25

Shares outstanding - end of period

31,992,497

31,977,670

31,967,424

31,519,973

31,496,881

Average outstanding shares - basic

31,982,938

31,970,405

31,683,355

31,507,975

31,490,402

Average outstanding shares - diluted

32,096,229

32,121,771

31,809,840

31,601,364

31,530,907

PERFORMANCE RATIOS

Return on average assets

1.65

%

1.56

%

1.67

%

1.71

%

1.68

%

Return on average equity

14.47

13.64

13.53

13.41

13.09

Net interest margin (tax equivalent)

4.27

4.25

4.18

4.19

4.17

Efficiency ratio

49.42

53.10

49.25

48.68

49.86

Year Ended

Dec. 31,

INCOME STATEMENTS

2013

2012

Interest income

$

176,369

$

159,796

Interest expense

4,088

5,112

Net interest income

172,281

154,684

Provision for loan losses

3,753

3,484

Net interest income after provision for loan losses

168,528

151,200

Noninterest income

62,052

57,209

Noninterest expense

126,012

109,049

Net income before income taxes

104,568

99,360

Income tax expense

25,700

25,135

Net income

$

78,868

$

74,225

PER COMMON SHARE DATA 

Net income - basic

$

2.48

$

2.36

Net income - diluted

2.47

2.36

Cash dividends 

1.03

0.99

Book Value

18.37

17.68

Market Value

66.11

39.01

Shares outstanding - end of period

31,992,497

31,496,881

Average outstanding shares - basic

31,787,974

31,480,155

Average outstanding shares - diluted

31,928,382

31,501,267

PERFORMANCE RATIOS

Return on average assets

1.64

%

1.75

%

Return on average equity

13.75

13.85

Net interest margin (tax equivalent)

4.22

4.28

Efficiency ratio

50.19

48.14

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2013

2012

ALLOWANCE FOR LOAN LOSSES

Dec. 31, 

Sept. 30,

June 30, 

Mar. 31, 

Dec. 31,

Balance at beginning of period

$

34,800

$

34,099

$

34,672

$

34,839

$

34,932

Loans charged off

(1,294)

(944)

(1,570)

(823)

(1,119)

Loan recoveries

311

297

165

255

384

Net charge-offs

(983)

(647)

(1,405)

(568)

(735)

Provision for loan losses

1,171

1,348

832

401

642

Transfer of off balance sheet exposure to other liabilities

(1,088)

-

-

-

-

Balance at end of period

$

33,900

$

34,800

$

34,099

$

34,672

$

34,839

Allowance for loan losses /

     period-end loans

*

1.26

%

*

1.33

%

*

1.32

%

1.62

%

1.67

%

Allowance for loan losses /

     nonperforming loans

120.82

152.21

128.75

153.87

159.10

Net charge-offs / average loans

     (annualized)

0.15

0.10

0.24

0.11

0.14

     * Reflects the impact of loans acquired in the Orange Savings Bank, SSB acquisition, which were initially recorded at fair value with no allocated allowance for loan losses

NONPERFORMING ASSETS

Nonaccrual loans

$

27,926

$

22,809

$

26,297

$

22,509

$

21,800

Accruing loans 90 days past due

133

54

187

24

97

Total nonperforming loans

28,059

22,863

26,484

22,533

21,897

Foreclosed assets

3,069

5,672

4,589

3,185

3,565

Total nonperforming assets

$

31,128

$

28,535

$

31,073

$

25,718

$

25,462

As a % of loans and foreclosed assets

1.16

%

1.09

%

1.20

%

1.20

%

1.22

%

As a % of end of period total assets

0.60

0.56

0.62

0.58

0.57

CAPITAL RATIOS

Tier 1 risk-based

15.82

%

15.37

%

15.20

%

17.54

%

17.43

%

Total risk-based

16.92

16.49

16.31

18.80

18.68

Tier 1 leverage

9.84

9.77

10.32

10.69

10.60

Equity to assets

11.25

11.20

11.56

12.66

12.37

Quarter Ended

2013

2012

NONINTEREST INCOME

Dec. 31, 

Sept. 30,

June 30, 

Mar. 31, 

Dec. 31,

Trust fees

$

4,433

$

4,138

$

3,953

$

3,793

$

3,616

Service charges on deposits

4,537

4,798

4,316

3,895

4,432

ATM, interchange and credit card fees

4,436

4,404

4,181

3,729

3,961

Real estate mortgage fees

1,200

2,008

1,686

1,384

1,331

Net gain (loss) on sale of available-for-sale securities

-

(108)

33

222

565

Net gain (loss) on sale of foreclosed assets

111

36

17

(316)

162

Net gain (loss) on sale of assets

6

9

1

168

5

Other noninterest income

1,069

1,790

966

1,085

876

Total noninterest income

$

15,792

$

17,075

$

15,153

$

13,960

$

14,948

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

15,690

$

16,024

$

14,968

$

14,101

$

13,565

Profit sharing expense

1,942

1,477

1,183

1,079

1,441

Net occupancy expense

2,101

2,164

2,064

1,766

1,790

Equipment expense

2,527

2,490

2,380

2,281

2,269

FDIC insurance premiums

636

640

568

572

565

ATM, interchange and credit card expenses

1,499

1,474

1,347

1,340

1,432

Legal, tax and professional fees

1,248

1,576

1,272

993

1,162

Audit  fees

506

368

351

334

323

Printing, stationery and supplies

562

534

498

472

487

Amortization of intangible assets

77

77

33

10

28

Advertising and public relations

1,495

1,245

1,100

994

1,085

Correspondent bank service charges

241

250

222

202

220

Other noninterest expense

4,572

7,215

3,925

3,327

4,266

Total noninterest expense

$

33,096

$

35,534

$

29,911

$

27,471

$

28,633

TAX EQUIVALENT YIELD ADJUSTMENT

$

4,490

$

4,358

$

4,082

$

3,795

$

3,727

Year Ended

Dec. 31,

NONINTEREST INCOME

2013

2012

Trust fees

$

16,317

$

14,464

Service charges on deposits

17,546

16,693

ATM, interchange and credit card fees

16,750

15,187

Real estate mortgage fees

6,349

5,094

Net gain on sale of available-for-sale securities

147

2,772

Net gain (loss) on sale of foreclosed assets

(152)

(350)

Net gain (loss) on sale of assets

183

207

Other noninterest income

4,912

3,142

Total noninterest income

$

62,052

$

57,209

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

60,843

$

53,558

Profit sharing expense

5,686

4,711

Net occupancy expense

8,095

7,076

Equipment expense

9,673

8,790

FDIC Insurance premiums

2,418

2,220

ATM, interchange and credit card expenses

5,660

5,448

Legal, tax and professional fees

5,029

4,182

Audit  fees

1,558

1,211

Printing, stationery and supplies

2,066

1,970

Amortization of intangible assets

197

149

Advertising and public relations

4,833

3,977

Correspondent bank service charges

915

856

Other noninterest expense

19,039

14,901

Total noninterest expense

$

126,012

$

109,049

TAX EQUIVALENT YIELD ADJUSTMENT

$

16,723

$

14,637

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended

Dec. 31, 2013

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

7,177

$

7

0.40

%

  Interest-bearing deposits in nonaffiliated banks

44,421

89

0.79

  Taxable securities

1,094,256

6,687

2.44

  Tax exempt securities

958,278

11,817

4.93

  Loans

2,650,834

33,645

5.04

Total interest-earning assets

4,754,966

52,245

4.36

Noninterest-earning assets

344,927

                              Total assets

$

5,099,893

Interest-bearing liabilities:

  Deposits

$

2,696,123

$

950

0.14

%

  Fed funds purchased and other short term borrowings

454,573

115

0.10

Total interest-bearing liabilities

3,150,696

1,065

0.13

Noninterest-bearing liabilities 

1,366,726

Shareholders' equity

582,471

                              Total liabilities and shareholders' equity

$

5,099,893

Net interest income and margin (tax equivalent)

$

51,180

4.27

%

Year Ended

Dec. 31, 2013

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

12,653

$

44

0.35

%

  Interest-bearing deposits in nonaffiliated banks

69,169

465

0.67

  Taxable securities

1,052,453

25,505

2.42

  Tax exempt securities

911,472

44,143

4.84

  Loans

2,431,872

122,935

5.06

Total interest-earning assets

4,477,619

193,092

4.31

Noninterest-earning assets

321,641

                              Total assets

$

4,799,260

Interest-bearing liabilities:

  Deposits

$

2,513,674

$

3,709

0.15

%

  Fed funds purchased and other short term borrowings

400,545

379

0.09

Total interest-bearing liabilities

2,914,219

4,088

0.14

Noninterest-bearing liabilities                                                                              

1,311,656

Shareholders' equity

573,385

                              Total liabilities and shareholders' equity

$

4,799,260

Net interest income and margin (tax equivalent)

$

189,004

4.22

%

SOURCE First Financial Bankshares, Inc.



RELATED LINKS

http://www.ffin.com