2014

First Financial Bankshares Announces Third Quarter Earnings Results

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.



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