First Financial Bankshares Announces Second Quarter Earnings Results

Jul 17, 2014, 16:00 ET from First Financial Bankshares, Inc.

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.



RELATED LINKS

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