First Financial Bankshares Announces Second Quarter Earnings Results

Jul 16, 2015, 16:01 ET from First Financial Bankshares, Inc.

ABILENE, Texas, July 16, 2015 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2015 of $25.31 million, up 19.34 percent when compared with earnings of $21.21 million in the same quarter last year.  Basic earnings per share were $0.39 for the second quarter of 2015 compared with $0.33 in the same quarter a year ago.

Net interest income for the second quarter of 2015 increased 8.54 percent to $52.34 million compared with $48.22 million in the same period of 2014. The net interest margin, on a taxable equivalent basis, was 4.07 percent compared to 4.11 percent in the first quarter of 2015 and 4.24 percent in the second quarter of 2014. Included in interest income for the second quarter of 2015 was $461 thousand, or four basis points in net interest margin, related to discount accretion from fair value accounting related to the Orange acquisition.   

The provision for loan losses was $1.55 million in the second quarter of 2015 compared with $1.29 million in the first quarter of 2015 and $1.12 million in the second quarter of 2014. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.61 percent at June 30, 2015, compared with 0.69 percent at March 31, 2015, and 0.93 percent at June 30, 2014.  Classified loans totaled $95.77 million at June 30, 2015, compared to $77.75 million at March 31, 2015, and $79.93 million at June 30, 2014.

Noninterest income increased 12.20 percent in the second quarter of 2015 to $17.81 million compared with $15.87 million in the same quarter a year ago. Trust fees increased to $4.74 million in the second quarter of 2015 compared with $4.55 million in the same quarter last year, due to continued growth in the fair value of Trust assets managed to $3.97 billion from $3.63 billion a year ago. This growth offset a $264 thousand decline in Trust oil and gas fee income in the second quarter of 2015 compared to the same quarter a year ago.  ATM, interchange and credit card fees increased 14.54 percent to $5.45 million compared with $4.75 million in the same quarter last year due to continued growth in net new accounts and debit cards. Real estate mortgage fees increased 45.25 percent in the second quarter of 2015 to $1.94 million compared with $1.34 million in the same quarter a year ago primarily resulting from a stronger mortgage market and the Company's asset purchase of 4Trust Mortgage, Inc. on May 31, 2015.

Noninterest expense for the second quarter of 2015 totaled $35.20 million compared to $35.00 million in the second quarter of 2014. The Company's efficiency ratio in the second quarter of 2015 was 46.46 percent compared with 50.84 percent in the same quarter last year. Included in noninterest expense in the second quarter of 2014 was $2.39 million related to a litigation settlement and damages sustained in a hail storm in Abilene. Excluding this amount, noninterest expense for the second quarter of 2015 increased approximately $2.59 million over the same quarter a year ago. The increase in the second quarter of 2015 was primarily a result of an increase in salary and employee benefit costs to $19.17 million compared to $17.27 million in the same period a year ago, primarily driven by the addition of employees to staff new branches and compliance-related areas, the addition of 4Trust Mortgage Inc. employees and annual pay increases.

For the first half of 2015, net income increased 13.23 percent to $49.30 million from $43.54 million a year ago. Basic earnings per share rose to $0.77 in the first half of 2015 from $0.68 in the same period last year. Net interest income increased 8.43 percent to $103.44 million in the first half of 2015 from $95.39 million in the same period a year ago. The provision for loan losses totaled $2.84 million compared with $2.81 million in the first half of the previous year. Noninterest income was $33.71 million in the first half of 2015 compared with $32.28 million a year ago. Noninterest expense rose to $69.15 million in the first half of 2015 compared with $67.45 million during the same period last year.

As of June 30, 2015, consolidated assets for the Company totaled $6.12 billion compared with $5.45 billion a year ago. Loans grew to $2.97 billion at quarter end compared with loans of $2.79 billion a year ago. Deposits totaled $4.73 billion at June 30, 2015, compared to $4.32 billion a year ago.  Shareholders' equity rose to $701.19 million as of June 30, 2015, compared with $640.04 million in the prior year. 

"We are pleased to report another solid quarter for our Company," said F. Scott Dueser, Chairman, President and CEO. "We continue to see good growth in loans and earnings and continue to find more efficient ways to provide exceptional service to our customers. During the quarter, we completed the asset purchase of 4Trust Mortgage, Inc. and we eagerly anticipate the closing of our acquisition of First Bank, N.A., Conroe, Texas. In light of the current depressed oil and gas prices, we continue to monitor our exposure to the oil and gas industry, which has remained at approximately 3%, consistent with the 2014 year-end balances."

About First Financial Bankshares Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 62 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Mauriceville, Merkel, Midlothian, Mineral Wells, Moran, New Waverly, Newton, Odessa, Orange, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Stephenville, Sweetwater, Trent, Trophy Club, Vidor, Waxahachie, Weatherford and Willow Park. FFIN recently announced that they have entered into a definitive agreement to acquire FBC Bancshares, Inc. and its wholly-owned subsidiary, First Bank, N.A., Conroe, Texas. Pending final regulatory and shareholder approval, the acquisition is expected to be finalized on July 31, 2015 and would expand First Financial Bankshares' growing Texas footprint into the cities of Conroe, Magnolia, Montgomery, Cut and Shoot, Willis and The Woodlands, Texas. The Company also operates First Financial Trust & Asset Management Company, N.A., with eight 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

2015

2014

ASSETS

 June 30, 

Mar. 31,

 Dec. 31, 

 Sept. 30, 

 June 30, 

Cash and due from banks

$

149,524

$

142,233

$

190,387

$

149,957

$

166,237

Interest-bearing deposits in banks

18,179

18,275

54,324

83,994

68,331

Interest-bearing time deposits in banks

5,456

9,170

17,002

19,234

24,188

Fed funds sold

5,720

5,460

8,760

4,785

3,110

Investment securities

2,729,408

2,689,640

2,416,297

2,254,316

2,174,396

Loans

2,967,768

2,938,707

2,937,991

2,839,696

2,786,644

Allowance for loan losses

(38,999)

(37,828)

(36,824)

(36,388)

(35,892)

Net loans

2,928,769

2,900,879

2,901,167

2,803,308

2,750,752

Premises and equipment

104,495

104,358

103,000

101,437

96,619

Goodwill

96,632

94,882

94,882

94,882

94,882

Other intangible assets

2,407

2,310

2,477

2,547

2,547

Other assets

74,646

58,165

59,906

61,351

65,294

Total assets

$

6,115,236

$

6,025,372

$

5,848,202

$

5,575,811

$

5,446,356

LIABILITIES AND SHAREHOLDERS'  EQUITY

Noninterest-bearing deposits

$

1,574,745

$

1,600,807

$

1,570,330

$

1,505,847

$

1,445,947

Interest-bearing deposits

3,152,674

3,236,200

3,179,925

2,958,517

2,872,511

Total deposits

4,727,419

4,837,007

4,750,255

4,464,364

4,318,458

Short-term borrowings

621,155

401,898

367,110

341,909

434,583

Other liabilities

65,469

80,219

49,300

110,773

53,279

Shareholders' equity

701,193

706,248

681,537

658,765

640,036

Total liabilities and shareholders' equity

$

6,115,236

$

6,025,372

$

5,848,202

$

5,575,811

$

5,446,356

Quarter Ended

2015

2014

INCOME STATEMENTS

 June 30, 

Mar. 31,

 Dec. 31, 

 Sept. 30, 

 June 30, 

Interest income

$

53,344

$

52,069

$

51,121

$

49,955

$

49,254

Interest expense

1,008

970

1,039

1,069

1,037

Net interest income

52,336

51,099

50,082

48,886

48,217

Provision for loan losses

1,554

1,290

755

896

1,124

Net interest income after provision for loan losses

50,782

49,809

49,327

47,990

47,093

Noninterest income

17,809

15,897

17,023

17,324

15,872

Noninterest expense

35,204

33,943

36,435

34,040

35,002

Net income before income taxes

33,387

31,763

29,915

31,274

27,963

Income tax expense

8,080

7,766

7,328

7,843

6,758

Net income

$

25,307

$

23,997

$

22,587

$

23,431

$

21,205

PER COMMON SHARE DATA

Net income - basic

$

0.39

$

0.37

$

0.35

$

0.37

$

0.33

Net income - diluted

0.39

0.37

0.35

0.36

0.33

Cash dividends declared

0.16

0.14

0.14

0.14

0.14

Book Value

10.93

11.01

10.63

10.28

9.99

Market Value

$

34.64

$

27.64

$

29.88

$

27.79

$

31.37

Shares outstanding - end of period

64,156,302

64,142,812

64,089,921

64,065,828

64,053,010

Average outstanding shares - basic

64,148,356

64,122,965

64,075,334

64,059,675

64,045,282

Average outstanding shares - diluted

64,354,720

64,298,896

64,316,815

64,304,985

64,301,306

PERFORMANCE RATIOS

Return on average assets

1.67

%

1.64

%

1.57

%

1.71

%

1.59

%

Return on average equity

14.38

14.00

13.34

14.27

13.46

Net interest margin (tax equivalent)

4.07

4.11

4.08

4.18

4.24

Efficiency ratio

46.46

47.01

50.58

47.93

50.84

Six Months Ended

June 30,

INCOME STATEMENTS

2015

2014

Interest income

$

105,413

$

97,463

Interest expense

1,977

2,073

Net interest income

103,436

95,390

Provision for loan losses

2,844

2,814

Net interest income after provision for loan losses

100,592

92,576

Noninterest income

33,707

32,277

Noninterest expense

69,151

67,449

Net income before income taxes

65,148

57,404

Income tax expense

15,845

13,863

Net income

$

49,303

$

43,541

PER COMMON SHARE DATA

Net income - basic

$

0.77

$

0.68

Net income - diluted

0.77

0.68

Cash dividends declared

0.30

0.27

Book Value

10.93

9.99

Market Value

$

34.64

$

31.37

Shares outstanding - end of period

64,156,302

64,053,010

Average outstanding shares - basic

64,135,731

64,027,776

Average outstanding shares - diluted

64,328,672

64,298,525

PERFORMANCE RATIOS

Return on average assets

1.66

%

1.66

%

Return on average equity

14.19

14.22

Net interest margin (tax equivalent)

4.09

4.28

Efficiency ratio

46.73

49.22

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2015

2014

ALLOWANCE FOR LOAN LOSSES

June 30, 

Mar. 31, 

Dec. 31, 

Sept. 30, 

June 30, 

Balance at beginning of period

$

37,828

$

36,824

$

36,388

$

35,892

$

34,693

Loans charged off

(943)

(509)

(670)

(614)

(302)

Loan recoveries

560

223

351

214

377

Net recoveries (charge-offs)

(383)

(286)

(319)

(400)

75

Provision for loan losses

1,554

1,290

755

896

1,124

Balance at end of period

$

38,999

$

37,828

$

36,824

$

36,388

$

35,892

Allowance for loan losses /

     period-end loans

1.31

%

1.29

%

1.25

%

1.28

%

1.29

%

Allowance for loan losses /

     nonperforming loans

228.20

196.04

178.06

162.77

151.52

Net charge-offs / average loans

     (annualized)

0.05

0.04

0.04

0.06

(0.01)

SUMMARY OF LOAN CLASSIFICATION

Special Mention

$

47,409

$

30,874

$

19,453

$

23,084

$

20,930

Substandard

48,317

46,775

53,388

58,219

58,864

Doubtful

43

99

141

87

136

Total classified loans

$

95,769

$

77,748

$

72,982

$

81,390

$

79,930

NONPERFORMING ASSETS

Nonaccrual loans

$

16,854

$

18,935

$

20,195

$

22,093

$

23,565

Accruing troubled debt restructured loans

172

177

226

-

-

Accruing loans 90 days past due

64

184

260

263

123

Total nonperforming loans

17,090

19,296

20,681

22,356

23,688

Foreclosed assets

1,045

1,081

1,035

1,273

2,342

Total nonperforming assets

$

18,135

$

20,377

$

21,716

$

23,629

$

26,030

As a % of loans and foreclosed assets

0.61

%

0.69

%

0.74

%

0.83

%

0.93

%

As a % of end of period total assets

0.30

0.34

0.37

0.42

0.48

CAPITAL RATIOS

Tier 1 risk-based

16.25

%

16.23

%

16.05

%

16.07

%

16.15

%

Total risk-based

17.36

17.35

17.16

17.20

17.30

Tier 1 leverage

9.84

9.85

9.89

10.10

9.99

Equity to assets

11.47

11.72

11.65

11.81

11.75

Quarter Ended

2015

2014

NONINTEREST INCOME

 June 30,  

Mar. 31, 

Dec. 31, 

 Sept. 30,  

 June 30,  

Trust fees

$

4,740

$

4,731

$

4,869

$

4,772

$

4,549

Service charges on deposits

4,021

3,768

4,287

4,402

4,174

ATM, interchange and credit card fees

5,445

4,969

5,137

5,093

4,754

Real estate mortgage fees

1,942

1,427

1,465

1,813

1,337

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

239

5

-

1

(1)

Net gain (loss) on sale of foreclosed assets

(49)

30

100

305

47

Net gain (loss) on sale of assets

(4)

5

(6)

(31)

44

Other noninterest income

1,475

962

1,171

969

968

Total noninterest income

$

17,809

$

15,897

$

17,023

$

17,324

$

15,872

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

17,865

$

17,023

$

16,302

$

16,354

$

16,279

Profit sharing expense

1,308

1,242

1,516

1,596

995

Loss from partial settlement of pension plan

-

-

2,909

-

-

Net occupancy expense

2,394

2,197

2,296

2,297

2,273

Equipment expense

2,992

2,899

2,695

2,758

2,665

FDIC insurance premiums

749

748

689

693

684

ATM, interchange and credit card expenses

1,609

1,725

1,875

1,819

1,696

Legal, tax and professional fees

1,701

1,697

1,363

1,463

1,208

Audit  fees

372

381

279

403

367

Printing, stationery and supplies

471

596

676

632

554

Amortization of intangible assets

72

90

64

62

74

Advertising and public relations

1,484

1,353

1,515

1,591

1,465

Correspondent bank service charges

225

222

222

222

215

Other noninterest expense

3,962

3,770

4,034

4,150

6,527

Total noninterest expense

$

35,204

$

33,943

$

36,435

$

34,040

$

35,002

TAX EQUIVALENT YIELD ADJUSTMENT

$

5,635

$

5,213

$

4,934

$

4,814

$

4,753

Six Months Ended

June 30,

NONINTEREST INCOME

2015

2014

Trust fees

$

9,472

$

9,125

Service charges on deposits

7,789

8,221

ATM, interchange and credit card fees

10,415

9,197

Real estate mortgage fees

3,368

2,361

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

244

(5)

Net gain (loss) on sale of foreclosed assets

(19)

499

Net gain (loss) on sale of assets

1

47

Other noninterest income

2,437

2,832

Total noninterest income

$

33,707

$

32,277

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

34,889

$

32,476

Profit sharing expense

2,549

2,212

Net occupancy expense

4,590

4,507

Equipment expense

5,891

5,287

FDIC insurance premiums

1,498

1,343

ATM, interchange and credit card expenses

3,335

3,176

Legal, tax and professional fees

3,398

2,481

Audit  fees

752

735

Printing, stationery and supplies

1,067

1,329

Amortization of intangible assets

162

148

Advertising and public relations

2,837

2,841

Correspondent bank service charges

447

443

Other noninterest expense

7,736

10,471

Total noninterest expense

$

69,151

$

67,449

TAX EQUIVALENT YIELD ADJUSTMENT

$

10,847

$

9,383

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended

Three Months Ended

June 30, 2015

Mar. 31, 2015

Average

Tax Equivalent

Yield /

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

10,391

$

10

0.37

%

$

6,767

$

5

0.27

%

  Interest-bearing deposits in nonaffiliated banks

34,633

40

0.47

89,798

75

0.34

  Taxable securities

1,425,744

7,398

2.08

1,333,073

7,808

2.34

  Tax exempt securities

1,294,809

15,108

4.67

1,191,772

13,973

4.69

  Loans

2,954,502

36,423

4.94

2,931,805

35,420

4.90

Total interest-earning assets

5,720,079

$

58,979

4.14

%

5,553,215

$

57,281

4.18

%

Noninterest-earning assets

351,223

363,211

Total assets

$

6,071,302

$

5,916,426

Interest-bearing liabilities:

  Deposits

$

3,177,999

$

902

0.11

%

$

3,221,552

$

927

0.12

%

  Fed funds purchased and other short term borrowings

558,367

106

0.08

388,213

42

0.04

Total interest-bearing liabilities

3,736,366

$

1,008

0.11

%

3,609,765

$

969

0.11

%

Noninterest-bearing liabilities                                                                              

1,628,847

1,611,430

Shareholders' equity

706,089

695,231

Total liabilities and shareholders' equity

$

6,071,302

$

5,916,426

Net interest income and margin (tax equivalent)

$

57,971

4.07

%

$

56,312

4.11

%

Three Months Ended

Three Months Ended

Dec. 31, 2014

Sept. 30, 2014

Average

Tax Equivalent

Yield /

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

5,975

$

4

0.30

%

$

10,619

$

11

0.40

%

  Interest-bearing deposits in nonaffiliated banks

118,244

110

0.37

50,213

69

0.55

  Taxable securities

1,246,632

7,370

2.36

1,166,248

6,856

2.35

  Tax exempt securities

1,091,723

13,078

4.79

1,057,715

12,763

4.83

  Loans

2,889,951

35,492

4.87

2,814,083

35,070

4.94

Total interest-earning assets

5,352,525

$

56,054

4.15

%

5,098,878

$

54,769

4.26

%

Noninterest-earning assets

358,395

348,369

Total assets

$

5,710,920

$

5,447,247

Interest-bearing liabilities:

  Deposits

$

3,043,612

$

989

0.13

%

$

2,892,065

$

999

0.14

%

  Fed funds purchased and other short term borrowings

373,785

49

0.05

384,768

70

0.07

Total interest-bearing liabilities

3,417,397

$

1,038

0.12

%

3,276,833

$

1,069

0.13

%

Noninterest-bearing liabilities                                                                              

1,621,819

1,518,907

Shareholders' equity

671,704

651,507

Total liabilities and shareholders' equity

$

5,710,920

$

5,447,247

Net interest income and margin (tax equivalent)

$

55,016

4.08

%

$

53,700

4.18

%

Three Months Ended

June 30, 2014

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

11,310

$

12

0.41

%

  Interest-bearing deposits in nonaffiliated banks

48,974

78

0.64

  Taxable securities

1,159,430

7,091

2.45

  Tax exempt securities

1,037,608

12,599

4.86

  Loans

2,748,023

34,227

5.00

Total interest-earning assets

5,005,345

$

54,007

4.33

%

Noninterest-earning assets

335,651

Total assets

$

5,340,996

Interest-bearing liabilities:

  Deposits

$

2,867,740

$

955

0.13

%

  Fed funds purchased and other short term borrowings

406,913

82

0.08

Total interest-bearing liabilities

3,274,653

$

1,037

0.13

%

Noninterest-bearing liabilities                                                                              

1,434,674

Shareholders' equity

631,669

Total liabilities and shareholders' equity

$

5,340,996

Net interest income and margin (tax equivalent)

$

52,970

4.24

%

Six Months Ended

Six Months Ended

June 30, 2015

June 30, 2014

Average

Tax Equivalent

Yield /

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

8,589

$

14

0.33

%

$

8,530

$

16

0.39

%

  Interest-bearing deposits in nonaffiliated banks

62,063

115

0.38

48,842

160

0.66

  Taxable securities

1,379,664

15,208

2.20

1,140,469

14,175

2.49

  Tax exempt securities

1,243,575

29,081

4.68

1,015,401

24,817

4.89

  Loans

2,943,216

71,842

4.92

2,718,910

67,678

5.02

Total interest-earning assets

5,637,107

$

116,260

4.16

%

4,932,152

$

106,846

4.37

%

Noninterest-earning assets

357,185

343,435

Total assets

$

5,994,292

$

5,275,587

Interest-bearing liabilities:

  Deposits

$

3,199,655

$

1,829

0.12

%

$

2,842,600

$

1,895

0.13

%

  Fed funds purchased and other short term borrowings

473,760

148

0.06

416,505

178

0.09

Total interest-bearing liabilities

3,673,415

$

1,977

0.11

%

3,259,105

$

2,073

0.13

%

Noninterest-bearing liabilities                                                                              

1,620,187

1,398,961

Shareholders' equity

700,690

617,521

Total liabilities and shareholders' equity

$

5,994,292

$

5,275,587

Net interest income and margin (tax equivalent)

$

114,283

4.09

%

$

104,773

4.28

%

 

SOURCE First Financial Bankshares, Inc.



RELATED LINKS

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