First Financial Bankshares Announces Third Quarter Earnings Results

Oct 17, 2013, 16:05 ET from First Financial Bankshares, Inc.

ABILENE, Texas, Oct. 17, 2013 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2013 of $19.56 million compared with earnings of $19.80 million in the same quarter last year.  Basic earnings per share were $0.61 for the third quarter of 2013 compared with $0.63 in the same quarter a year ago. Included in noninterest expense in the third quarter of 2013 were technology contract termination and conversion costs totaling $3.40 million, before income tax, related to the Company's recent acquisition of Orange Savings Bank, SSB.

All amounts for the third quarter and first nine months of 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 increased 16.29 percent to $45.49 million for the third quarter of 2013 compared with $39.12 million in the same quarter of 2012. The net interest margin, on a taxable equivalent basis, was 4.25 percent compared with 4.26 percent in the same quarter last year and 4.18 percent in the second quarter of this year. 

The provision for loan losses was $1.35 million in the third quarter of 2013 compared with $787 thousand in the same quarter last year and $832 thousand in the second quarter of this year, primarily due to continued loan growth. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.09 percent at September 30, 2013, compared with 1.20 percent at June 30, 2013, and 1.53 percent at September 30, 2012.  Classified loans totaled $81.67 million at September 30, 2013, compared to $87.83 million at June 30, 2013, and $76.48 million at September 30, 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 10.17 percent in the third quarter of 2013 to $17.08 million compared with $15.50 million in the same quarter a year ago. Trust fees increased to $4.14 million in the third quarter of 2013 compared with $3.72 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.20 billion from $2.75 billion a year ago. ATM, interchange and credit card fees increased 16.91 percent to $4.40 million compared with $3.77 million in the same quarter last year.  Service charges on deposit accounts increased to $4.80 million during the third quarter of 2013 compared with $4.34 million in the same quarter a year ago. Real estate mortgage income increased to $2.01 million compared with $1.50 million in the same quarter a year ago. The net loss on securities sold during the third quarter of 2013 totaled $108 thousand compared to a gain of $1.48 million in the same quarter of 2012.

Noninterest expense increased in the third quarter of 2013 to $35.53 million from $27.20 million in the same quarter last year. The Company's efficiency ratio in the third quarter of 2013 was 53.10 percent compared with 46.61 percent in the same quarter last year. Included in noninterest expense in the third quarter of 2013 were technology contract termination and conversion costs totaling $3.40 million related to the Company's recent acquisition of Orange Savings Bank, SSB (discussed above). Also included in noninterest expense in the third quarter of 2013 were salary and employee benefit costs of $17.50 million compared to $14.85 million in the same quarter a year ago, primarily from the increase in personnel from the Orange acquisition. Legal, tax and professional fees increased to $1.58 million compared to $1.02 million in the same quarter a year ago.

For the first nine months of 2013, net income increased 3.08 percent to $57.63 million from $55.91 million for the same period a year ago. Basic earnings per share rose to $1.82 in the first nine months of 2013 from $1.78 in the same period last year. Net interest income increased 8.33 percent to $125.59 million in the first nine months of 2013 from $115.93 million in the same period a year ago. The provision for loan losses totaled $2.58 million compared with $2.84 million in the first nine months of the previous year. Noninterest income was $46.26 million in the first nine months of 2013 compared with $42.26 million for the same period a year ago. Noninterest expense rose to $92.92 million in the first nine months of 2013 compared with $80.42 million last year.

As of September 30, 2013, consolidated assets for the Company totaled $5.08 billion compared with $4.31 billion a year ago. Loans totaled $2.61 billion at quarter end, after approximately $50.00 million of short-term participations paid off, compared with loans of $2.00 billion a year ago. Total deposits were $4.00 billion as of September 30, 2013, versus $3.44 billion a year earlier.  Shareholders' equity rose to $568.24 million as of September 30, 2013, compared with $549.91 million the prior year. 

"We were very pleased with the earnings performance this quarter, especially in light of the $3.40 million expense tied to the purchase accounting to terminate the Orange technology contract and conversion costs. We continue to see solid growth in loans and deposits throughout the Company, and the recent acquisition of Orange has contributed nicely to the bottom line on a monthly basis," said F. Scott Dueser, Chairman, President and CEO. "We are having numerous conversations and are continuing to pursue additional acquisition opportunities to maximize our shareholders' return."

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:

Sept. 30, 

June 30, 

Mar. 31, 

Dec. 31, 

Sept. 30, 

Cash and due from banks

$

164,666

$

138,087

$

113,958

$

207,018

$

128,606

Interest-bearing deposits in banks

48,634

6,624

20,065

139,676

25,633

Interest-bearing time deposits in banks

34,352

39,350

45,172

49,005

67,506

Fed funds sold

14,300

16,025

3,175

14,045

23,400

Investment securities

1,976,101

1,975,490

1,959,054

1,820,096

1,883,864

Loans

2,614,809

2,578,883

2,138,137

2,088,623

2,003,854

Allowance for loan losses

(34,800)

(34,099)

(34,672)

(34,839)

(34,932)

Net loans

2,580,009

2,544,784

2,103,465

2,053,784

1,968,922

Premises and equipment

94,676

94,808

86,265

84,122

80,580

Goodwill

94,882

94,882

71,865

71,865

71,865

Other intangible assets

2,547

2,366

98

108

136

Other assets

65,468

70,189

52,863

62,293

60,035

Total assets

$

5,075,635

$

4,982,605

$

4,455,980

$

4,502,012

$

4,310,547

LIABILITIES AND SHAREHOLDERS'  EQUITY:

Noninterest-bearing deposits

$

1,371,835

$

1,305,049

$

1,237,840

$

1,311,708

$

1,200,154

Interest-bearing deposits

2,628,722

2,612,540

2,312,286

2,320,876

2,244,244

Total deposits

4,000,557

3,917,589

3,550,126

3,632,584

3,444,398

Short-term borrowings

466,500

431,575

263,345

259,697

254,480

Other liabilities

40,337

57,577

78,257

52,768

61,757

Shareholders' equity

568,241

575,864

564,252

556,963

549,912

Total liabilities and shareholders' equity

$

5,075,635

$

4,982,605

$

4,455,980

$

4,502,012

$

4,310,547

Quarter Ended

2013

2012

INCOME STATEMENTS

Sept. 30, 

June 30, 

Mar. 31, 

Dec. 31, 

Sept. 30, 

Interest income

$

46,655

$

42,446

$

39,575

$

39,801

$

40,287

Interest expense

1,164

946

904

1,049

1,168

Net interest income

45,491

41,500

38,671

38,752

39,119

Provision for loan losses

1,349

832

401

642

787

Net interest income after provision for loan losses

44,142

40,668

38,270

38,110

38,332

Noninterest income

17,075

15,153

13,960

14,948

15,499

Noninterest expense

35,534

29,911

27,471

28,633

27,203

Net income before income taxes

25,683

25,910

24,759

24,425

26,628

Income tax expense

6,121

6,420

6,182

6,107

6,828

Net income

$

19,562

$

19,490

$

18,577

$

18,318

$

19,800

PER COMMON SHARE DATA 

Net income - basic

$

0.61

$

0.62

$

0.59

$

0.58

$

0.63

Net income - diluted

0.61

0.61

0.59

0.58

0.63

Cash dividends declared

0.26

0.26

0.25

0.25

0.25

Shares outstanding - end of period

31,977,670

31,967,424

31,519,973

31,496,881

31,488,530

Average outstanding shares - basic

31,970,405

31,683,355

31,507,975

31,490,402

31,484,375

Average outstanding shares - diluted

32,121,771

31,809,840

31,601,364

31,530,907

31,502,172

PERFORMANCE RATIOS

Return on average assets

1.56

%

1.67

%

1.71

%

1.68

%

1.84

%

Return on average equity

13.64

13.53

13.41

13.09

14.53

Net interest margin (tax equivalent)

4.25

4.18

4.19

4.17

4.26

Efficiency ratio

53.10

49.25

48.68

49.86

46.61

Nine Months Ended

Sept. 30,

INCOME STATEMENTS

2013

2012

Interest income

$

128,605

$

119,994

Interest expense

3,014

4,063

Net interest income

125,591

115,931

Provision for loan losses

2,582

2,842

Net interest income after provision for loan losses

123,009

113,089

Noninterest income

46,260

42,261

Noninterest expense

92,917

80,415

Net income before income taxes

76,352

74,935

Income tax expense

18,723

19,028

Net income

$

57,629

$

55,907

PER COMMON SHARE DATA 

Net income - basic

$

1.82

$

1.78

Net income - diluted

1.81

1.78

Cash dividends 

0.77

0.74

Book Value

17.77

17.46

Market Value

58.85

36.03

Shares outstanding - end of period

31,977,670

31,488,530

Average outstanding shares - basic

31,722,272

31,476,715

Average outstanding shares - diluted

31,853,294

31,486,707

PERFORMANCE RATIOS

Return on average assets

1.64

%

1.78

%

Return on average equity

13.53

14.12

Net interest margin (tax equivalent)

4.21

4.32

Efficiency ratio

50.47

47.55

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2013

2012

ALLOWANCE FOR LOAN LOSSES

Sept. 30,

June 30, 

Mar. 31, 

Dec. 31,

Sept. 30,

Balance at beginning of period

$

34,099

$

34,672

$

34,839

$

34,932

$

34,747

Loans charged off

(944)

(1,570)

(823)

(1,119)

(1,064)

Loan recoveries

297

165

255

384

462

Net charge-offs

(647)

(1,405)

(568)

(735)

(602)

Provision for loan losses

1,348

832

401

642

787

Balance at end of period

$

34,800

$

34,099

$

34,672

$

34,839

$

34,932

Allowance for loan losses / period-end loans

*

 

1.33

 

%

*

 

1.32

 

%

 

1.62

 

%

 

1.67

 

%

 

1.74

 

%

Allowance for loan losses / nonperforming loans

152.21

128.75

153.87

159.10

143.45

Net charge-offs / average loans

     (annualized)

0.10

0.24

0.11

0.14

0.12

     * 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

$

22,809

$

26,297

$

22,509

$

21,800

$

24,283

Accruing loans 90 days past due

54

187

24

97

69

Total nonperforming loans

22,863

26,484

22,533

21,897

24,352

Foreclosed assets

5,672

4,589

3,185

3,565

6,373

Total nonperforming assets

$

28,535

$

31,073

$

25,718

$

25,462

$

30,725

As a % of loans and foreclosed assets

1.09

%

1.20

%

1.20

%

1.22

%

1.53

%

As a % of end of period total assets

0.56

0.62

0.58

0.57

0.71

CAPITAL RATIOS

Tier 1 risk-based

15.37

%

15.20

%

17.54

%

17.43

%

17.66

%

Total risk-based

16.49

16.31

18.80

18.68

18.92

Tier 1 leverage

9.77

10.32

10.69

10.60

10.49

Equity to assets

11.20

11.56

12.66

12.37

12.76

Quarter Ended

2013

2012

NONINTEREST INCOME

Sept. 30,

June 30, 

Mar. 31, 

Dec. 31,

Sept. 30,

Trust fees

$

4,138

$

3,953

$

3,793

$

3,616

$

3,723

Service charges on deposits

4,798

4,316

3,895

4,432

4,337

ATM, interchange and credit card fees

4,404

4,181

3,729

3,961

3,767

Real estate mortgage fees

2,008

1,686

1,384

1,331

1,495

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

(108)

33

222

565

1,479

Net gain (loss) on sale of foreclosed assets

36

17

(316)

162

(106)

Net gain (loss) on sale of assets

9

1

168

5

(32)

Other noninterest income

1,790

966

1,085

876

836

Total noninterest income

$

17,075

$

15,153

$

13,960

$

14,948

$

15,499

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

16,024

$

14,968

$

14,101

$

13,565

$

13,502

Profit sharing expense

1,477

1,183

1,079

1,441

1,343

Net occupancy expense

2,164

2,064

1,766

1,790

1,806

Equipment expense

2,490

2,380

2,281

2,269

2,269

FDIC insurance premiums

640

568

572

565

563

ATM, interchange and credit card expenses

1,474

1,347

1,340

1,432

1,317

Legal, tax and professional fees

1,576

1,272

993

1,162

1,019

Audit  fees

368

351

334

323

311

Printing, stationery and supplies

534

498

472

487

468

Amortization of intangible assets

77

33

10

28

38

Advertising and public relations

1,245

1,100

994

1,085

998

Correspondent bank service charges

250

222

202

220

220

Other noninterest expense

7,215

3,925

3,327

4,266

3,349

Total noninterest expense

$

35,534

$

29,911

$

27,471

$

28,633

$

27,203

TAX EQUIVALENT YIELD ADJUSTMENT

$

4,358

$

4,082

$

3,795

$

3,727

$

3,743

Nine Months Ended

Sept. 30,

NONINTEREST INCOME

2013

2012

Trust fees

$

11,884

$

10,848

Service charges on deposits

13,009

12,261

ATM, interchange and credit card fees

12,315

11,226

Real estate mortgage fees

5,149

3,763

Net gain on sale of available-for-sale securities

147

2,206

Net gain (loss) on sale of foreclosed assets

(263)

(512)

Net gain (loss) on sale of assets

177

203

Other noninterest income

3,842

2,266

Total Noninterest Income

$

46,260

$

42,261

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

45,093

$

39,993

Profit sharing expense

3,738

3,270

Net occupancy expense

5,995

5,286

Equipment expense

7,146

6,521

FDIC Insurance premiums

1,781

1,655

ATM, interchange and credit card expenses

4,161

4,017

Legal, tax and professional fees

3,846

3,020

Audit  fees

1,052

889

Printing, stationery and supplies

1,504

1,483

Amortization of intangible assets

120

120

Advertising and public relations

3,339

2,893

Correspondent bank service charges

674

636

Other noninterest expense

14,468

10,632

Total Noninterest Expense

$

92,917

$

80,415

TAX EQUIVALENT YIELD ADJUSTMENT

$

12,235

$

10,911

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended

Sept. 30, 2013

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

13,611

$

14

0.42

%

  Interest-bearing deposits in nonaffiliated banks

49,434

95

0.76

  Taxable securities

1,011,050

6,130

2.43

  Tax exempt securities

943,623

11,441

4.85

  Loans

2,636,253

33,333

5.02

Total interest-earning assets

4,653,971

51,013

4.35

Noninterest-earning assets

334,521

Total assets

$

4,988,492

Interest-bearing liabilities:

  Deposits

$

2,631,862

$

1,038

0.16

%

  Fed funds purchased and other short term borrowings

457,914

126

0.11

Total interest-bearing liabilities

3,089,776

1,164

0.15

Noninterest-bearing liabilities                                                                              

1,329,582

Shareholders' equity

569,134

Total liabilities and shareholders' equity

$

4,988,492

Net interest income and margin (tax equivalent)

$

49,849

4.25

%

Nine Months Ended

Sept. 30, 2013

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

10,932

$

28

0.35

%

  Interest-bearing deposits in nonaffiliated banks

77,543

376

0.65

  Taxable securities

1,038,679

18,818

2.42

  Tax exempt securities

895,778

32,327

4.81

  Loans

2,359,216

89,291

5.06

Total interest-earning assets

4,382,148

140,840

4.30

Noninterest-earning assets

312,933

Total assets

$

4,695,081

Interest-bearing liabilities:

  Deposits

$

2,453,370

$

2,758

0.15

%

  Fed funds purchased and other short term borrowings

378,775

256

0.09

Total interest-bearing liabilities

2,832,145

3,014

0.14

Noninterest-bearing liabilities                                                                              

1,293,373

Shareholders' equity

569,563

Total liabilities and shareholders' equity

$

4,695,081

Net interest income and margin (tax equivalent)

$

137,826

4.21

%

 

 

SOURCE First Financial Bankshares, Inc.



RELATED LINKS

http://www.ffin.com