First Financial Bankshares Announces Third Quarter Earnings Results

Oct 21, 2010, 16:12 ET from First Financial Bankshares, Inc.

ABILENE, Texas, Oct. 21 /PRNewswire-FirstCall/ -- First Financial Bankshares, Inc. (Nasdaq: FFIN) today reported earnings for the third quarter of 2010 of $16.23 million compared with earnings of $13.99 million in the same quarter last year. Basic earnings per share were $0.78 for the third quarter of 2010 compared with $0.67 in the third quarter of 2009. Third quarter 2010 earnings included net proceeds after income tax of $1.30 million from the expropriation of company-owned property in Southlake, Texas, by the Texas Department of Transportation. Excluding this extraordinary item, net income would have been $14.93 million in the third quarter of 2010, a 6.77 per cent increase over the 2009 third quarter, or $0.72 per share.

Net interest income for the third quarter of 2010 increased 4.1 percent to $33.91 million compared with $32.58 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.67 percent for the third quarter of 2010 compared with 4.92 percent in the same period a year ago and 4.69 percent in the second quarter of 2010.

The provision for loan losses was $1.99 million in the third quarter of 2010, down from $3.71 million in the same quarter last year and $2.97 million in the quarter ended June 30, 2010.  Nonperforming assets as a percentage of loans and foreclosed assets held steady at 1.45 percent at September 30, 2010, compared with 1.48 percent at June 30, 2010.  The decrease in the provision for loan losses reflects stability in the level of nonperforming assets and a decrease in net charge-offs.

Noninterest income in the third quarter of 2010 was $12.93 million compared with $12.88 million in the same quarter a year earlier. Trust fees increased to $2.71 million in the third quarter of 2010 compared with $2.33 million in the same quarter last year.  Real estate mortgage fees increased $423,000 in the third quarter of 2010 over the same period in 2009 due to refinancing activity as a result of the favorable rate environment.  Service charges on deposit accounts decreased to $5.10 million during the third quarter of 2010 compared with $5.73 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services and changes in overdraft regulations.

Noninterest expense increased in the third quarter of 2010 to $24.71 million from $23.02 million in the same quarter last year, primarily from a $459,000 increase in profit sharing expense, a $262,000 increase in other real estate expenses and a $226,000 increase in legal, tax and professional expense, mostly related to the acquisition of First State Bank, Huntsville, Texas, announced on September 9, 2010. The Company's efficiency ratio in the third quarter of 2010 was 47.92 percent, unchanged from the same quarter a year ago. The 2010 ratio includes the income from the extraordinary item.

For the first nine months of 2010, net income increased 7.0 percent to $44.14 million from $41.26 million a year ago.  Basic earnings per share rose to $2.12 in the first nine months of 2010 from $1.98 in the same period last year.  Excluding the extraordinary item during the third quarter of 2010 described above, net income would have been $42.85 million for the nine months ended September 30, 2010, a 3.86 per cent increase over the 2010 nine month-period, or $2.06 per share. Net interest income increased 3.51 percent in the first nine months of 2010 to $100.02 million from $96.63 million a year ago.  The provision for loan losses totaled $6.97 million compared to $7.05 million in the first nine months of 2009. Noninterest income was $36.61 million compared with $36.54 million in the same period a year ago.  Noninterest expense was $72.00 million in the first nine months of 2010 compared with $70.33 million a year ago.

As of September 30, 2010, consolidated assets for the Company increased 12.07 percent to $3.45 billion compared with $3.08 billion a year ago.  Loans totaled $1.54 billion at quarter end compared with loans of $1.45 billion a year ago.  Total deposits were $2.74 billion as of September 30, 2010, compared with $2.46 billion a year earlier.  Shareholders' equity rose to $450.93 million as of September 30, 2010, compared with $415.53 million the prior year.  

"This was another excellent quarter for us, even after adjusting for the extraordinary item related to the state government's expropriation of a portion of our land in Southlake," said F. Scott Dueser, Chairman, President and CEO. "Our bank presidents continue to do an excellent job of managing their banks and their net interest margins, despite the sluggish economy, increased government regulation and low interest rates.  We remain committed to successfully managing our credit quality and expenses, while seeking the highest customer service levels for our customers and shareholders."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 51 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 and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado, Midlothian and Crowley; First Financial Bank, Hereford; First Financial Bank, N.A., Mineral Wells; First Financial Bank, N.A., San Angelo; First Financial Bank, N.A., Southlake, Bridgeport, Boyd, Decatur, 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)





































September 30,











2010



2009


ASSETS:













Cash and due from banks







$

91,492


$

89,326


Interest-bearing deposits at banks








231,532



23,884


Fed funds sold








6,135



38,045


Investment securities








1,421,402



1,323,451


Loans









1,537,708



1,454,397



Allowance for loan losses








(30,013)



(25,532)


Net loans








1,507,695



1,428,865


Premises and equipment








67,387



63,659


Goodwill








62,112



62,112


Other intangible assets








578



1,239


Other assets








59,150



45,612



Total assets







$

3,447,483


$

3,076,193
















LIABILITIES AND SHAREHOLDERS'  EQUITY:













Noninterest-bearing deposits







$

781,228


$

719,266


Interest-bearing deposits








1,957,417



1,739,637



Total deposits








2,738,645



2,458,903


Short-term borrowings








178,097



160,401


Other liabilities








79,810



41,355


Shareholders' equity








450,931



415,534



Total liabilities and shareholders' equity







$

3,447,483


$

3,076,193

































Three Months Ended



Nine Months Ended





September 30,



September 30,


INCOME STATEMENTS


2010



2009



2010



2009


Interest income

$

37,259


$

36,598


$

110,658


$

110,028


Interest expense


3,345



4,015



10,641



13,401


Net interest income


33,914



32,583



100,017



96,627


Provision for loan losses


1,988



3,706



6,971



7,054


Net interest income after provision for loan losses


31,926



28,877



93,046



89,573


Noninterest income


12,926



12,879



36,608



36,536


Noninterest expense


24,706



23,018



71,995



70,325



Net income before income taxes and extraordinary item


20,146



18,738



57,659



55,784


Income tax expense


5,213



4,752



14,811



14,528



Net income  before extraordinary item

$

14,933


$

13,986


$

42,848


$

41,256


Extraordinary item - expropriation of property, net of income tax


1,296



-



1,296



-



Net income


16,229



13,986



44,144



41,256






























PER COMMON SHARE DATA













Net income before extraordinary item - basic

$

0.72


$

0.67


$

2.06


$

1.98


Net income before extraordinary item - diluted


0.72



0.67



2.05



1.98


Net income - basic


0.78



0.67



2.12



1.98


Net income - diluted


0.78



0.67



2.12



1.98


Cash dividends


0.34



0.34



1.02



1.02


Book value








21.63



19.96


Market value








46.99



49.46


Shares outstanding - end of period


20,852,152



20,822,396



20,852,152



20,822,396


Average outstanding shares - basic


20,849,902



20,819,398



20,844,258



20,810,112


Average outstanding shares - diluted


20,854,489



20,844,567



20,863,935



20,830,932
















PERFORMANCE RATIOS













Return on average assets


1.91

%


1.81

%


1.77

%


1.78

%

Return on average equity


14.62



13.99



13.78



14.18


Net interest margin (tax equivalent)


4.67



4.92



4.68



4.85


Efficiency ratio


47.92



47.92



49.12



50.08




FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)



















Quarter Ended




2010



2009




Sept. 30,



June 30,



March 31,



Dec. 31,



Sept. 30,


















ALLOWANCE FOR LOAN LOSSES
















Balance at beginning of period

$

28,954


$

28,750


$

27,612


$

25,532


$

23,247


Loans charged off


(1,178)



(2,970)



(1,059)



(2,430)



(1,662)


Loan recoveries


249



201



187



145



241


Net charge-offs


(929)



(2,769)



(872)



(2,285)



(1,421)


Provision for loan losses


1,988



2,973



2,010



4,365



3,706


Balance at end of period

$

30,013


$

28,954


$

28,750


$

27,612


$

25,532


















Allowance for loan losses /
















    period-end loans


1.95

%


1.91

%


1.92

%


1.82

%


1.76

%

Allowance for loan losses /
















    nonperforming loans


211.7



203.3



159.1



148.8



174.4


Net charge-offs / average loans
















    (annualized)


0.24



0.73



0.24



0.62



0.38


































NONPERFORMING ASSETS
















Nonaccrual loans

$

14,110


$

14,240


$

17,775


$

18,540


$

14,585


Accruing loans 90 days past due


69



1



290



15



56


    Total nonperforming loans


14,179



14,241



18,065



18,555



14,641


Foreclosed assets


8,217



8,306



4,444



3,533



4,367


    Total nonperforming assets

$

22,396


$

22,547


$

22,509


$

22,088


$

19,008


















As a % of loans and foreclosed assets


1.45

%


1.48

%


1.50

%


1.46

%


1.30

%

As a % of end of period total assets


0.65



0.68



0.67



0.67



0.62


















CAPITAL RATIOS
















Tier 1 Risk-based


18.19

%


18.22

%


18.02

%


17.73

%


18.12

%

Total Risk-based


19.45



19.48



19.28



18.99



19.37


Tier 1 Leverage


10.89



10.63



10.50



10.69



10.83


Equity to assets


13.08



12.92



12.64



12.68



13.51






Three Months Ended



Nine Months Ended



September 30,



September 30,

NONINTEREST INCOME


2010



2009



2010



2009

Gain on sale of student loans, net

$

-


$

273


$

-


$

889

Gain on securities transactions, net


7



897



79



1,645

Trust fees


2,706



2,328



7,904



6,570

Service charges on deposits


5,100



5,732



15,252



16,294

Real estate mortgage fees


1,154



731



2,571



2,177

Net gain (loss) on sale of foreclosed assets


313



(128)



383



(187)

ATM and credit card fees


2,915



2,427



8,255



7,063

Other noninterest income


731



619



2,164



2,085

    Total Noninterest Income

$

12,926


$

12,879


$

36,608


$

36,536

































NONINTEREST EXPENSE












Salaries and employee benefits, excluding profit sharing

$

11,978


$

11,512


$

35,657


$

34,695

Profit sharing expense


1,148



689



2,967



1,739

Net occupancy expense


1,654



1,599



4,793



4,785

Equipment expense


1,851



1,920



5,542



5,828

Printing, stationery and supplies


425



508



1,283



1,406

ATM and credit card expenses


985



810



2,735



2,462

Audit  fees


246



292



742



840

Legal, tax and professional fees


1,004



778



2,758



2,470

FDIC Insurance premiums


975



818



2,953



4,074

Correspondent bank service charges


192



204



564



839

Advertising and public relations


803



661



2,288



1,783

Amortization of intangible assets


151



214



463



652

Other noninterest expense


3,294



3,013



9,250



8,752

    Total Noninterest Expense

$

24,706


$

23,018


$

71,995


$

70,325





































TAX EQUIVALENT YIELD ADJUSTMENT

$

2,718


$

2,570


$

7,953


$

7,256



FIRST FINANCIAL BANKSHARES, INC.


SELECTED FINANCIAL DATA (UNAUDITED)


(In thousands)
















Three Months Ended




September 30, 2010




Average


Tax Equivalent



Yield /




Balance



Interest



Rate












Interest-earning assets:










 Short-term investments

$

168,709


$

381



0.90

%

 Taxable securities


933,394



9,026



3.87

%

 Tax exempt securities


476,889



7,182



6.02

%

 Loans


1,533,624



23,389



6.05

%

Total interest-earning assets


3,112,616



39,978



5.10

%

Noninterest-earning assets


251,616








Total assets

$

3,364,232


















Interest-bearing liabilities:










 Deposits

$

1,939,078


$

3,249



0.66

%

 Fed funds purchased and other short term borrowings


158,051



97



0.24

%

Total interest-bearing liabilities


2,097,129



3,346



0.63

%

Noninterest-bearing liabilities

826,824


Shareholders' equity


440,279








Total liabilities and shareholders' equity

$

3,364,232


















Net interest income and margin (tax equivalent)




$

36,632



4.67

%

















Nine Months Ended




September 30, 2010




Average


Tax Equivalent



Yield /




Balance



Interest



Rate












Interest-earning assets:










 Short-term investments

$

186,560


$

1,102



0.79

%

 Taxable securities


920,279



27,229



3.95

%

 Tax exempt securities


463,508



21,209



6.10

%

 Loans


1,512,992



69,070



6.10

%

Total interest-earning assets


3,083,339



118,610



5.14

%

Noninterest-earning assets


254,084








Total assets

$

3,337,423


















Interest-bearing liabilities:










 Deposits

$

1,912,051


$

10,247



0.72

%

 Fed funds purchased and other short term borrowings


169,692



393



0.31

%

Total interest-bearing liabilities


2,081,743



10,640



0.68

%

Noninterest-bearing liabilities

827,421


Shareholders' equity


428,259








Total liabilities and shareholders' equity

$

3,337,423


















Net interest income and margin (tax equivalent)




$

107,970



4.68

%



SOURCE First Financial Bankshares, Inc.



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