First Financial Bankshares Announces Second Quarter Earnings Results

ABILENE, Texas, July 17, 2014 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2014 of $21.21 million, up 8.80 percent compared with earnings of $19.49 million in the same quarter last year.  Basic earnings per share were $0.33 for the second quarter of 2014 compared with $0.31 in the same quarter a year ago.

Net interest income for the second quarter of 2014 increased 16.19 percent to $48.22 million compared with $41.50 million in the same period of 2013. The net interest margin, on a taxable equivalent basis, was 4.24 percent compared to 4.32 percent in the first quarter of 2014 and 4.18 percent in the same quarter last year. Included in interest income for the second quarter of 2014 was $366 thousand, or two basis points in net interest margin, related to discount accretion from fair value accounting related to the Orange and Huntsville acquisitions.   

The provision for loan losses was $1.12 million in the second quarter of 2014 compared with $832 thousand in the same quarter last year and $1.69 million in the first quarter of 2014, primarily due to continued loan growth. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.93 percent at June 30, 2014, compared with 1.02 percent at March 31, 2014, and 1.20 percent at June 30, 2013.  Classified loans totaled $79.93 million at June 30, 2014, compared to $81.56 million at March 31, 2014, and $87.83 million at June 30, 2013.

Noninterest income increased 4.74 percent in the second quarter of 2014 to $15.87 million compared with $15.15 million in the same quarter a year ago. Trust fees increased to $4.55 million in the second quarter of 2014 compared with $3.95 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.63 billion from $3.05 billion a year ago along with additional oil and gas activity. ATM, interchange and credit card fees increased 13.70 percent to $4.75 million compared with $4.18 million in the same quarter last year. Real estate mortgage fees decreased to $1.34 million in the second quarter of 2014 compared to $1.69 million in the same quarter last year due to the decline in the overall mortgage refinance market.  

Noninterest expense increased in the second quarter of 2014 to $35.00 million from $32.45 million in the first quarter of 2014 and $29.91 million in the same quarter last year. The increase in noninterest expense in the second quarter of 2014 from the first quarter of 2014 was largely attributable to the Company's recognition of $2.39 million related to a litigation settlement and the deductible from damage sustained in a hail storm in Abilene. The additional increase in noninterest expense in the second quarter of 2014 compared to the same quarter a year ago was mainly due to increases in salary and employee benefit costs to $17.27 million, an increase of 6.95 percent when compared to $16.15 million in the same quarter a year ago, primarily driven by an increase in personnel from the Orange acquisition and annual pay increases. The Company's efficiency ratio in the second quarter of 2014 was 50.84 percent compared with 49.25 percent in the same quarter last year.

For the first half of 2014, net income increased 14.38 percent to $43.54 million from $38.07 million a year ago. Basic earnings per share rose to $0.68 in the first half of 2014 from $0.60 in the same period last year. Net interest income increased 18.98 percent to $95.39 million in the first half of 2014 from $80.17 million in the same period a year ago. The provision for loan losses totaled $2.81 million compared with $1.23 million in the first half of the previous year. Noninterest income was $32.28 million in the first half of 2014 compared with $29.11 million a year ago. Noninterest expense rose to $67.45 million in the first half of 2014 compared with $57.38 million last year.

As of June 30, 2014, consolidated assets for the Company totaled $5.45 billion compared with $4.98 billion a year ago. Loans totaled $2.79 billion at quarter end compared with loans of $2.58 billion a year ago. Total deposits grew 10.23 percent to $4.32 billion at June 30, 2014, compared to $3.92 billion a year ago.  Shareholders' equity rose to $640.04 million as of June 30, 2014, compared with $575.86 million at June 30, 2013. 

"We are pleased to report another quarter of good growth in loans and deposits as well as solid earnings," said F. Scott Dueser, Chairman, President and CEO. "In the second half of the year, we will continue to pursue opportunities for acquisitions and focus on growing loans, cutting costs and increasing income."

On April 22, 2014, the Company's Board of Directors declared a two-for-one stock split in the form of a 100 percent stock dividend, which was effective June 2, 2014.  All share and per share amounts in this earnings release have been restated to reflect this stock split.

All amounts for the second quarter of 2014 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.

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






2014



2013


ASSETS:




 June 30,  



Mar. 31, 



Dec. 31, 



Sept. 30, 



June 30, 


Cash and due from banks


$

166,237


$

160,469


$

183,084


$

164,666


$

138,087


Interest-bearing deposits in banks



68,331



3,772



25,498



48,634



6,624


Interest-bearing time deposits in banks



24,188



30,026



31,917



34,352



39,350


Fed funds sold



3,110



3,620



3,430



14,300



16,025


Investment securities



2,174,396



2,163,599



2,058,407



1,976,101



1,975,490


Loans




2,786,644



2,698,717



2,689,448



2,614,809



2,578,883



Allowance for loan losses



(35,892)



(34,693)



(33,900)



(34,800)



(34,099)


Net loans




2,750,752



2,664,024



2,655,548



2,580,009



2,544,784


Premises and equipment



96,619



95,406



95,505



94,676



94,808


Goodwill




94,882



94,882



94,882



94,882



94,882


Other intangible assets



2,547



2,600



2,603



2,547



2,366


Other assets



65,294



62,629



71,334



65,468



70,189



Total assets


$

5,446,356


$

5,281,027


$

5,222,208


$

5,075,635


$

4,982,605




















LIABILITIES AND SHAREHOLDERS'  EQUITY:

















Noninterest-bearing deposits


$

1,445,947


$

1,389,331


$

1,362,184


$

1,371,835


$

1,305,049


Interest-bearing deposits



2,872,511



2,844,950



2,772,891



2,628,722



2,612,540



Total deposits



4,318,458



4,234,281



4,135,075



4,000,557



3,917,589


Short-term borrowings



434,583



383,220



463,888



466,500



431,575


Other liabilities



53,279



46,960



35,598



40,337



57,577


Shareholders' equity



640,036



616,566



587,647



568,241



575,864



Total liabilities and shareholders' equity


$

5,446,356


$

5,281,027


$

5,222,208


$

5,075,635


$

4,982,605























Quarter Ended






2014



2013


INCOME STATEMENTS



 June 30,  



Mar. 31, 



Dec. 31, 



Sept. 30, 



June 30, 


Interest income


$

49,254


$

48,209


$

47,756


$

46,655


$

42,446


Interest expense



1,037



1,036



1,066



1,164



946


Net interest income



48,217



47,173



46,690



45,491



41,500


Provision for loan losses



1,124



1,690



1,171



1,349



832


Net interest income after provision for loan losses



47,093



45,483



45,519



44,142



40,668


Noninterest income



15,872



16,405



15,792



17,075



15,153


Noninterest expense



35,002



32,448



33,096



35,534



29,911



Net income before income taxes



27,963



29,440



28,215



25,683



25,910


Income tax expense



6,758



7,104



6,977



6,121



6,420



Net income


$

21,205


$

22,336


$

21,238


$

19,562


$

19,490




















PER COMMON SHARE DATA 

















Net income - basic


$

0.33


$

0.35


$

0.33


$

0.31


$

0.31


Net income - diluted



0.33



0.35



0.33



0.30



0.31


Cash dividends declared



0.14



0.13



0.13



0.13



0.13


Book Value




9.99



9.63



9.18



8.88



9.01


Market Value


$

31.37


$

30.90


$

33.06


$

29.43


$

27.83


Shares outstanding - end of period



64,053,010



64,039,234



63,984,994



63,955,340



63,934,848


Average outstanding shares - basic



64,045,282



64,010,076



63,965,876



63,940,810



63,366,710


Average outstanding shares - diluted



64,301,306



64,212,018



64,192,458



64,243,542



63,619,680




















PERFORMANCE RATIOS

















Return on average assets



1.59

%


1.74

%


1.65

%


1.56

%


1.67

%

Return on average equity



13.46



15.02



14.47



13.64



13.53


Net interest margin (tax equivalent)



4.24



4.32



4.27



4.25



4.18


Efficiency ratio



50.84



47.57



49.42



53.10



49.25























Six Months Ended













June 30,










INCOME STATEMENTS



2014



2013











Interest income


$

97,463


$

82,022











Interest expense



2,073



1,851











Net interest income



95,390



80,171











Provision for loan losses



2,814



1,233











Net interest income after provision for loan losses



92,576



78,938











Noninterest income



32,277



29,113











Noninterest expense



67,449



57,382












Net income before income taxes



57,404



50,669











Income tax expense



13,863



12,602












Net income


$

43,541


$

38,067





























PER COMMON SHARE DATA 

















Net income - basic


$

0.68


$

0.60











Net income - diluted



0.68



0.60











Cash dividends declared



0.27



0.26











Book Value




9.99



9.01











Market Value


$

31.37


$

27.83











Shares outstanding - end of period



64,053,010



63,934,848











Average outstanding shares - basic



64,027,776



63,192,300











Average outstanding shares - diluted



64,298,525



63,419,942





























PERFORMANCE RATIOS

















Return on average assets



1.66

%


1.69

%










Return on average equity



14.22



13.47











Net interest margin (tax equivalent)



4.28



4.18











Efficiency ratio



49.22



48.98











 

 

FIRST FINANCIAL BANKSHARES, INC.







SELECTED FINANCIAL DATA (UNAUDITED)







(In thousands)


































Quarter Ended











2014



2013








ALLOWANCE FOR LOAN LOSSES



June 30, 



Mar. 31, 



Dec. 31, 



Sept. 30,



June 30, 








Balance at beginning of period


$

34,693


$

33,900


$

34,800


$

34,099


$

34,672








Loans charged off



(302)



(1,297)



(1,294)



(944)



(1,570)








Loan recoveries



377



400



311



297



165








Net recoveries (charge-offs)



75



(897)



(983)



(647)



(1,405)








Provision for loan losses



1,124



1,690



1,171



1,348



832








Transfer of off balance sheet exposure to other liabilities



-



-



(1,088)



-



-








Balance at end of period


$

35,892


$

34,693


$

33,900


$

34,800


$

34,099
































Allowance for loan losses /























     period-end loans



1.29

%


1.29

%


1.26

%


1.33

%


1.32

%







Allowance for loan losses /























     nonperforming loans



151.52



140.23



120.82



152.21



128.75








Net charge-offs / average loans























     (annualized)



(0.01)



0.14



0.15



0.10



0.24
























































NONPERFORMING ASSETS























Nonaccrual loans


$

23,565


$

24,710


$

27,926


$

22,809


$

26,297








Accruing loans 90 days past due



123



30



133



54



187









Total nonperforming loans



23,688



24,740



28,059



22,863



26,484








Foreclosed assets



2,342



2,813



3,069



5,672



4,589









Total nonperforming assets


$

26,030


$

27,553


$

31,128


$

28,535


$

31,073
































As a % of loans and foreclosed assets



0.93

%


1.02

%


1.16

%


1.09

%


1.20

%







As a % of end of period total assets



0.48



0.52



0.60



0.56



0.62
































CAPITAL RATIOS























Tier 1 risk-based



16.15

%


16.24

%


15.82

%


15.37

%


15.20

%







Total risk-based



17.30



17.39



16.92



16.49



16.31








Tier 1 leverage



9.99



9.95



9.84



9.77



10.32








Equity to assets



11.75



11.68



11.25



11.20



11.56



























































Quarter Ended











2014



2013








NONINTEREST INCOME



 June 30,  



Mar. 31, 



Dec. 31, 



Sept. 30,



June 30, 








Trust fees



$

4,549


$

4,576


$

4,433


$

4,138


$

3,953








Service charges on deposits



4,174



4,047



4,537



4,798



4,316








ATM, interchange and credit card fees



4,754



4,443



4,436



4,404



4,181








Real estate mortgage fees



1,337



1,024



1,200



2,008



1,686








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



(1)



(4)



-



(108)



33








Net gain (loss) on sale of foreclosed assets



47



452



111



36



17








Net gain (loss) on sale of assets



44



3



6



9



1








Other noninterest income



968



1,864



1,069



1,790



966









Total noninterest income


$

15,872


$

16,405


$

15,792


$

17,075


$

15,153
































NONINTEREST EXPENSE























Salaries and employee benefits, excluding profit sharing


$

16,279


$

16,197


$

15,690


$

16,024


$

14,968








Profit sharing expense



995



1,217



1,942



1,477



1,183








Net occupancy expense



2,273



2,234



2,101



2,164



2,064








Equipment expense



2,665



2,622



2,527



2,490



2,380








FDIC insurance premiums



684



659



636



640



568








ATM, interchange and credit card expenses



1,696



1,480



1,499



1,474



1,347








Legal, tax and professional fees



1,208



1,273



1,248



1,576



1,272








Audit  fees




367



369



506



368



351








Printing, stationery and supplies



554



775



562



534



498








Amortization of intangible assets



74



75



77



77



33








Advertising and public relations



1,465



1,375



1,495



1,245



1,100








Correspondent bank service charges



215



228



241



250



222








Other noninterest expense



6,527



3,944



4,572



7,215



3,925









Total noninterest expense


$

35,002


$

32,448


$

33,096


$

35,534


$

29,911
































TAX EQUIVALENT YIELD ADJUSTMENT


$

4,753


$

4,629


$

4,490


$

4,358


$

4,082




































Six Months Ended





















June 30,

















NONINTEREST INCOME



2014



2013

















Trust fees



$

9,125


$

7,746

















Service charges on deposits



8,221



8,211

















ATM, interchange and credit card fees



9,197



7,910

















Real estate mortgage fees



2,361



3,069

















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



(5)



255

















Net gain (loss) on sale of foreclosed assets



499



(299)

















Net gain (loss) on sale of assets



47



169

















Other noninterest income



2,832



2,052


















Total noninterest income


$

32,277


$

29,113









































NONINTEREST EXPENSE























Salaries and employee benefits, excluding profit sharing


$

32,476


$

29,069

















Profit sharing expense



2,212



2,262

















Net occupancy expense



4,507



3,831

















Equipment expense



5,287



4,661

















FDIC insurance premiums



1,343



1,141

















ATM, interchange and credit card expenses



3,176



2,687

















Legal, tax and professional fees



2,481



2,265

















Audit  fees




735



685

















Printing, stationery and supplies



1,329



970

















Amortization of intangible assets



148



43

















Advertising and public relations



2,841



2,094

















Correspondent bank service charges



443



424

















Other noninterest expense



10,471



7,250


















Total noninterest expense


$

67,449


$

57,382









































TAX EQUIVALENT YIELD ADJUSTMENT


$

9,383


$

7,877

















 

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)



























Three Months Ended



Three Months Ended




June 30, 2014



Mar. 31, 2014





Average



Tax Equivalent



Yield /





Average



Tax Equivalent



Yield /






Balance



Interest



Rate





Balance



Interest



Rate


Interest-earning assets:






















  Fed funds sold


$

11,310


$

12



0.41

%



$

5,718


$

5



0.35

%

  Interest-bearing deposits in nonaffiliated banks



48,974



78



0.64





48,708



82



0.68


  Taxable securities



1,159,430



7,091



2.45





1,121,296



7,084



2.53


  Tax exempt securities



1,037,608



12,599



4.86





992,947



12,218



4.92


  Loans




2,748,023



34,227



5.00





2,689,474



33,450



5.04


Total interest-earning assets



5,005,345


$

54,007



4.33

%




4,858,143


$

52,839



4.41

%

Noninterest-earning assets



335,651











351,309









Total assets


$

5,340,996










$

5,209,452































Interest-bearing liabilities:






















  Deposits



$

2,867,740


$

955



0.13

%



$

2,817,181


$

941



0.14

%

  Fed funds purchased and other short term borrowings



406,913



82



0.08





426,204



96



0.09


Total interest-bearing liabilities



3,274,653


$

1,037



0.13

%




3,243,385


$

1,037



0.13

%

Noninterest-bearing liabilities                                                                              



1,434,674











1,362,852









Shareholders' equity



631,669











603,215









Total liabilities and shareholders' equity


$

5,340,996










$

5,209,452































Net interest income and margin (tax equivalent)





$

52,970



4.24

%






$

51,802



4.32

%



























Three Months Ended



Three Months Ended




Dec. 31, 2013



Sept. 30, 2013





Average



Tax Equivalent



Yield /





Average



Tax Equivalent



Yield /






Balance



Interest



Rate





Balance



Interest



Rate


Interest-earning assets:






















  Fed funds sold


$

7,177


$

7



0.40

%



$

13,611


$

14



0.42

%

  Interest-bearing deposits in nonaffiliated banks



44,421



89



0.79





49,434



95



0.76


  Taxable securities



1,094,256



6,687



2.44





1,011,050



6,130



2.43


  Tax exempt securities



958,278



11,817



4.93





943,623



11,441



4.85


  Loans




2,650,834



33,645



5.04





2,636,253



33,333



5.02


Total interest-earning assets



4,754,966


$

52,245



4.36

%




4,653,971


$

51,013



4.35

%

Noninterest-earning assets



344,927











334,521









Total assets


$

5,099,893










$

4,988,492































Interest-bearing liabilities:






















  Deposits



$

2,696,123


$

950



0.14

%



$

2,631,862


$

1,038



0.16

%

  Fed funds purchased and other short term borrowings



454,573



115



0.10





457,914



126



0.11


Total interest-bearing liabilities



3,150,696


$

1,065



0.13

%




3,089,776


$

1,164



0.15

%

Noninterest-bearing liabilities                                                                              



1,366,726











1,329,582









Shareholders' equity



582,471











569,134









Total liabilities and shareholders' equity


$

5,099,893










$

4,988,492































Net interest income and margin (tax equivalent)





$

51,180



4.27

%






$

49,849



4.25

%



























Three Months Ended















June 30, 2013
















Average



Tax Equivalent



Yield /

















Balance



Interest



Rate













Interest-earning assets:






















  Fed funds sold


$

5,918


$

9



0.58

%












  Interest-bearing deposits in nonaffiliated banks



59,333



111



0.75













  Taxable securities



1,066,586



6,313



2.37













  Tax exempt securities



917,460



10,813



4.71













  Loans




2,324,268



29,282



5.05













Total interest-earning assets



4,373,565


$

46,528



4.27

%












Noninterest-earning assets



305,201




















Total assets


$

4,678,766










































Interest-bearing liabilities:






















  Deposits



$

2,403,899


$

853



0.14

%












  Fed funds purchased and other short term borrowings



405,438



93



0.09













Total interest-bearing liabilities



2,809,337


$

946



0.14

%












Noninterest-bearing liabilities                                                                              



1,291,602




















Shareholders' equity



577,827




















Total liabilities and shareholders' equity


$

4,678,766










































Net interest income and margin (tax equivalent)





$

45,582



4.18

%






































Six Months Ended



Six Months Ended




June 30, 2014



June 30, 2013





Average



Tax Equivalent



Yield /





Average



Tax Equivalent



Yield /






Balance



Interest



Rate





Balance



Interest



Rate


Interest-earning assets:






















  Fed funds sold


$

8,530


$

16



0.39

%



$

9,570


$

14



0.30

%

  Interest-bearing deposits in nonaffiliated banks



48,842



160



0.66





91,830



281



0.62


  Taxable securities



1,140,469



14,175



2.49





1,052,723



12,688



2.41


  Tax exempt securities



1,015,401



24,817



4.89





871,459



20,886



4.79


  Loans




2,718,910



67,678



5.02





2,218,292



56,030



5.09


Total interest-earning assets



4,932,152


$

106,846



4.37

%




4,243,874


$

89,899



4.27

%

Noninterest-earning assets



343,435











302,071









Total assets


$

5,275,587










$

4,545,945































Interest-bearing liabilities:






















  Deposits



$

2,842,600


$

1,895



0.13

%



$

2,362,645


$

1,721



0.15

%

  Fed funds purchased and other short term borrowings



416,505



178



0.09





338,549



130



0.08


Total interest-bearing liabilities



3,259,105


$

2,073



0.13

%




2,701,194


$

1,851



0.14

%

Noninterest-bearing liabilities                                                                              



1,398,961











1,274,970









Shareholders' equity



617,521











569,781









Total liabilities and shareholders' equity


$

5,275,587










$

4,545,945































Net interest income and margin (tax equivalent)





$

104,773



4.28

%






$

88,048



4.18

%

 

SOURCE First Financial Bankshares, Inc.



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