First Financial Bankshares Announces Second Quarter Earnings Results

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Jul 19, 2012, 04:05 ET

ABILENE, Texas, July 19, 2012 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2012 of $18.35 million, up 11.08 percent compared with earnings of $16.52 million in the same quarter last year. Basic earnings per share were $0.58 for the second quarter of 2012 compared with $0.53 in the same quarter a year ago.

Net interest income increased 1.00 percent to $38.6 million compared with $38.2 million in 2011. The net interest margin, on a taxable equivalent basis, was 4.33 percent compared with 4.69 percent in the same quarter last year and 4.39 percent in the first quarter of this year.

The provision for loan losses was $759 thousand in the second quarter of 2012, compared with $1.92 million in the same quarter last year and $1.30 million in the first quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.76 percent at June 30, 2012, compared with 1.60 percent at March 31, 2012, and 1.58 percent at June 30, 2011. Classified loans totaled $80.9 million at June 30, 2012, compared to $90.4 million at March 31, 2012, and $91.7 million at June 30, 2011.

Noninterest income increased 13.20 percent in the second quarter of 2012 to $13.46 million compared with $11.89 million in the same quarter a year ago. Trust fees increased to $3.67 million in the second quarter of 2012 compared with $3.21 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $2.65 billion from $2.45 billion a year ago. ATM, interchange and credit card fees increased 10.81 percent to $3.78 million compared with $3.42 million in the same quarter last year. Service charges on deposit accounts decreased to $4.04 million during the second quarter of 2012 compared with $4.52 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services.

Noninterest expense increased in the second quarter of 2012 to $26.75 million from $25.89 million in the same quarter last year. The Company's efficiency ratio in the second quarter of 2012 improved to 48.02 percent compared with 48.65 percent in the same quarter last year.

For the first half of 2012, net income increased 10.03 percent to $36.11 million from $32.82 million a year ago. Basic earnings per share rose to $1.15 in the first half of 2012 from $1.04 in the same period last year. Net interest income increased 1.74 percent to $76.81 million in the first half of 2012 from $75.50 million a year ago. The provision for loan losses totaled $2.06 million compared with $4.05 million in the first half of the previous year. Noninterest income was $26.76 million in the first half of 2012 compared with $24.74 million a year ago. Noninterest expense rose to $53.21 million in the first half of 2012 compared with $52.05 million last year.

As of June 30, 2012, consolidated assets for the Company totaled $4.29 billion compared with $3.84 billion a year ago. Loans grew 11.57 percent and totaled $1.92 billion at quarter end compared with loans of $1.72 billion a year ago. Total deposits were $3.39 billion as of June 30, 2012, which represents an 8.74 percent growth over $3.12 billion a year earlier. Shareholders' equity rose to $534.26 million as of June 30, 2012, compared with $477.71 million the prior year.

"We are pleased to report another successful quarter where we experienced solid growth in earnings, loans and trust fees," said F. Scott Dueser, Chairman, President and CEO. "In the second half of the year, we will continue to pursue opportunities for acquisitions and for internal growth while remaining vigilant over expenses and loan quality."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 11 separately chartered banks with 53 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Albany, Clyde, Moran and Odessa; First Financial Bank, N.A., Eastland, Ranger, Cisco and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado, Midlothian and Crowley; First Financial Bank, Hereford; First Financial Bank, Huntsville; First Financial Bank, N.A., Mineral Wells; First Financial Bank, N.A., San Angelo; First Financial Bank, N.A., Southlake, Bridgeport, Boyd, Decatur, Grapevine, Keller and Trophy Club; First Financial Bank, N.A., Stephenville, Granbury, Glen Rose and Acton; First Financial Bank, N.A., Sweetwater, Roby, Trent and Merkel; and First Financial Bank, N.A., Weatherford, Willow Park, Aledo, Brock and Fort Worth. The Company also operates First Financial Trust & Asset Management Company, N.A., with six 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)


			Quarter Ended
			2012						2011
ASSETS:			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
Cash and due from banks		$	122,534		$	131,163		$	146,239		$	127,174		$	106,500
Interest-bearing deposits in banks			25,794			84,169			104,597			103,850			114,776
Interest-bearing time deposits in banks			74,594			62,018			61,175			66,688			78,312
Fed funds sold			10,100			11,200			-			3,580			3,195
Investment securities			1,963,367			1,963,341			1,844,998			1,732,919			1,646,655
Loans			1,918,292			1,798,867			1,786,544			1,728,832			1,719,415
	Allowance for loan losses		(34,747)			(34,529)			(34,315)			(34,301)			(33,406)
Net loans			1,883,545			1,764,338			1,752,229			1,694,531			1,686,009
Premises and equipment			80,404			79,308			76,483			73,443			72,550
Goodwill			71,865			71,865			71,865			71,865			71,865
Other intangible assets			175			213			257			341			442
Other assets			59,426			59,635			62,688			61,012			60,711
	Total assets	$	4,291,804		$	4,227,250		$	4,120,531		$	3,935,403		$	3,841,015

LIABILITIES AND SHAREHOLDERS' EQUITY:
Noninterest-bearing deposits		$	1,156,238		$	1,125,577		$	1,101,576		$	1,020,953		$	989,271
Interest-bearing deposits			2,235,942			2,272,495			2,233,222			2,165,653			2,130,170
	Total deposits		3,392,180			3,398,072			3,334,798			3,186,606			3,119,441
Short-term borrowings			251,428			237,567			207,756			180,790			192,364
Other liabilities			113,933			74,606			69,440			68,808			51,505
Shareholders' equity			534,263			517,005			508,537			499,199			477,705
	Total liabilities and shareholders' equity	$	4,291,804		$	4,227,250		$	4,120,531		$	3,935,403		$	3,841,015


			Quarter Ended
			2012						2011
INCOME STATEMENTS			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
Interest income		$	39,911		$	39,797		$	39,888		$	40,164		$	40,241
Interest expense			1,355			1,540			1,704			1,854			2,065
Net interest income			38,556			38,257			38,184			38,310			38,176
Provision for loan losses			759			1,296			1,221			1,354			1,924
Net interest income after provision for loan losses			37,797			36,961			36,963			36,956			36,252
Noninterest income			13,464			13,298			12,792			13,911			11,894
Noninterest expense			26,745			26,468			26,257			26,320			25,888
	Net income before income taxes		24,516			23,791			23,498			24,547			22,258
Income tax expense			6,165			6,035			6,032			6,460			5,738
	Net income	$	18,351		$	17,756		$	17,466		$	18,087		$	16,520

PER COMMON SHARE DATA
Net income - basic		$	0.58		$	0.56		$	0.56		$	0.58		$	0.53
Net income - diluted			0.58			0.56			0.55			0.57			0.52
Cash dividends			0.25			0.24			0.24			0.24			0.24
Shares outstanding - end of period			31,481,747			31,477,483			31,459,635			31,452,283			31,451,300
Average outstanding shares - basic			31,478,980			31,466,706			31,454,197			31,451,687			31,442,978
Average outstanding shares - diluted			31,497,241			31,479,743			31,489,304			31,481,092			31,467,617

PERFORMANCE RATIOS
Return on average assets			1.75	%		1.73	%		1.74	%		1.87	%		1.74	%
Return on average equity			14.01			13.79			13.88			14.79			14.29
Net interest margin (tax equivalent)			4.33			4.39			4.44			4.62			4.69
Efficiency ratio			48.02			48.08			48.33			47.48			48.65



			Six Months Ended
			June 30,
INCOME STATEMENTS			2012			2011
Interest income		$	79,708		$	79,968
Interest expense			2,895			4,466
Net interest income			76,813			75,502
Provision for loan losses			2,055			4,051
Net interest income after provision for loan losses			74,758			71,451
Noninterest income			26,762			24,736
Noninterest expense			53,213			52,048
	Net income before income taxes		48,307			44,139
Income tax expense			12,200			11,324
	Net income	$	36,107		$	32,815

PER COMMON SHARE DATA
Net income - basic		$	1.15		$	1.04
Net income - diluted			1.15			1.04
Cash dividends			0.49			0.47
Book Value			16.97			15.19
Market Value			34.56			34.45
Shares outstanding - end of period			31,481,747			31,451,300
Average outstanding shares - basic			31,472,843			31,434,328
Average outstanding shares - diluted			31,474,653			31,457,286

PERFORMANCE RATIOS
Return on average assets			1.74	%		1.75	%
Return on average equity			13.90			14.57
Net interest margin (tax equivalent)			4.36			4.71
Efficiency ratio			48.05			48.86

	FIRST FINANCIAL BANKSHARES, INC.
	SELECTED FINANCIAL DATA (UNAUDITED)
	(In thousands)

			Quarter Ended
			2012						2011
ALLOWANCE FOR LOAN LOSSES			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
Balance at beginning of period		$	34,529		$	34,315		$	34,301		$	33,406		$	32,501
Loans charged off			(766)			(1,405)			(2,195)			(722)			(1,396)
Loan recoveries			225			323			988			263			377
Net charge-offs			(541)			(1,082)			(1,207)			(459)			(1,019)
Provision for loan losses			759			1,296			1,221			1,354			1,924
Balance at end of period		$	34,747		$	34,529		$	34,315		$	34,301		$	33,406

Allowance for loan losses /
period-end loans			1.81	%		1.92	%		1.92	%		1.98	%		1.94	%
Allowance for loan losses /
nonperforming loans			130.1			164.3			171.0			194.3			179.6
Net charge-offs / average loans
(annualized)			0.12			0.24			0.27			0.11			0.24

NONPERFORMING ASSETS
Nonaccrual loans		$	26,606		$	20,963		$	19,975		$	17,598		$	18,599
Accruing loans 90 days past due			105			53			96			52			6
	Total nonperforming loans		26,711			21,016			20,071			17,650			18,605
Foreclosed assets			7,149			7,852			9,464			10,254			8,778
	Total nonperforming assets	$	33,860		$	28,868		$	29,535		$	27,904		$	27,383

As a % of loans and foreclosed assets			1.76	%		1.60	%		1.64	%		1.60	%		1.58	%
As a % of end of period total assets			0.79			0.68			0.72			0.71			0.71

CAPITAL RATIOS
Tier 1 Risk-based			17.23	%		17.73	%		17.49	%		17.89	%		17.97	%
Total Risk-based			18.48			18.99			18.74			19.14			19.22
Tier 1 Leverage			10.36			10.31			10.33			10.45			10.22
Equity to assets			12.45			12.23			12.34			12.68			12.44



			Quarter Ended
			2012						2011
NONINTEREST INCOME			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
Trust fees		$	3,670		$	3,454		$	3,151		$	3,265		$	3,211
Service charges on deposits			4,042			3,882			4,313			4,482			4,520
ATM, interchange and credit card fees			3,784			3,676			3,551			3,544			3,415
Real estate mortgage fees			1,218			1,050			1,013			1,056			941
Net gain on sale of available-for-sale securities			382			346			164			67			42
Net gain (loss) on sale of foreclosed assets			(404)			6			(159)			18			(1,111)
Net gain (loss) on sale of assets			105			122			43			588			123
Other noninterest income			667			762			716			891			753
	Total Noninterest Income	$	13,464		$	13,298		$	12,792		$	13,911		$	11,894


NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing		$	13,304		$	13,186		$	12,753		$	12,790		$	12,916
Profit sharing expense			885			1,043			1,153			1,318			1,092
Net occupancy expense			1,743			1,737			1,707			1,823			1,685
Equipment expense			2,144			2,108			2,008			1,970			1,951
FDIC Insurance premiums			565			527			517			561			597
ATM, interchange and credit card expenses			1,450			1,249			1,311			1,276			1,183
Legal, tax and professional fees			968			1,033			994			947			1,077
Audit fees			283			295			304			305			276
Printing, stationery and supplies			511			505			473			443			489
Amortization of intangible assets			38			44			84			101			105
Advertising and public relations			953			942			1,105			1,033			870
Correspondent bank service charges			216			200			198			198			208
Other noninterest expense			3,685			3,599			3,650			3,555			3,439
	Total Noninterest Expense	$	26,745		$	26,468		$	26,257		$	26,320		$	25,888


TAX EQUIVALENT YIELD ADJUSTMENT		$	3,673		$	3,495		$	3,348		$	3,209		$	3,145



			Six Months Ended
			June 30,
NONINTEREST INCOME			2012			2011
Trust fees		$	7,124		$	6,254
Service charges on deposits			7,924			8,894
ATM, interchange and credit card fees			7,460			6,491
Real estate mortgage fees			2,268			1,874
Net gain on sale of available-for-sale securities			728			261
Net gain (loss) on sale of foreclosed assets			(406)			(1,174)
Net gain (loss) on sale of assets			235			266
Other noninterest income			1,429			1,870
	Total Noninterest Income	$	26,762		$	24,736


NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing		$	26,491		$	26,027
Profit sharing expense			1,927			2,216
Net occupancy expense			3,480			3,332
Equipment expense			4,252			3,822
FDIC Insurance premiums			1,093			1,568
ATM, interchange and credit card expenses			2,699			2,330
Legal, tax and professional fees			2,002			2,328
Audit fees			578			549
Printing, stationery and supplies			1,015			916
Amortization of intangible assets			82			216
Advertising and public relations			1,894			1,678
Correspondent bank service charges			416			408
Other noninterest expense			7,284			6,658
	Total Noninterest Expense	$	53,213		$	52,048


TAX EQUIVALENT YIELD ADJUSTMENT		$	7,167		$	6,294

	FIRST FINANCIAL BANKSHARES, INC.
	SELECTED FINANCIAL DATA (UNAUDITED)
	(In thousands)


			Three Months Ended
			June 30, 2012
			Average		Tax Equivalent	Yield /
			Balance		Interest	Rate
Interest-earning assets:
Fed funds sold		$	6,671	$	6	0.35	%
Interest-bearing deposits in nonaffiliated banks			128,473		221	0.69	%
Taxable securities			1,185,081		8,214	2.77	%
Tax exempt securities			755,511		9,862	5.22	%
Loans			1,850,408		25,281	5.49	%
Total interest-earning assets			3,926,144		43,584	4.46	%
Noninterest-earning assets			281,042
	Total assets	$	4,207,186

Interest-bearing liabilities:
Deposits		$	2,260,319	$	1,310	0.23	%
Fed funds purchased and other short term borrowings			239,599		45	0.08	%
Total interest-bearing liabilities			2,499,918		1,355	0.22	%
Noninterest-bearing liabilities			1,180,367
Shareholders' equity			526,901
	Total liabilities and shareholders' equity	$	4,207,186

Net interest income and margin (tax equivalent)				$	42,229	4.33	%




			Six Months Ended
			June 30, 2012
			Average		Tax Equivalent	Yield /
			Balance		Interest	Rate
Interest-earning assets:
Fed funds sold		$	5,148	$	8	0.32	%
Interest-bearing deposits in nonaffiliated banks			130,753		430	0.66	%
Taxable securities			1,200,932		17,018	2.83	%
Tax exempt securities			723,294		19,237	5.32	%
Loans			1,817,300		50,182	5.55	%
Total interest-earning assets			3,877,427		86,875	4.51	%
Noninterest-earning assets			286,204
	Total assets	$	4,163,631

Interest-bearing liabilities:
Deposits		$	2,256,399	$	2,793	0.25	%
Fed funds purchased and other short term borrowings			240,672		102	0.09	%
Total interest-bearing liabilities			2,497,071		2,895	0.23	%
Noninterest-bearing liabilities			1,144,268
Shareholders' equity			522,292
	Total liabilities and shareholders' equity	$	4,163,631

Net interest income and margin (tax equivalent)				$	83,980	4.36	%