April 19, 2018 - 4:05 PM EDT
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First Financial Bankshares Announces First Quarter Earnings Results

ABILENE, Texas, April 19, 2018 /PRNewswire/ -- The Board of Directors of – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2018 of $34.52 million, up $7.92 million when compared with earnings of $26.60 million in the same quarter last year. Basic earnings per share were $0.51 for the first quarter of 2018 compared with $0.40 in the same quarter a year ago. The increase in net earnings and earnings per share in the current quarter when compared with the same quarter a year ago largely resulted from the recent enactment of tax legislation that reduced the corporate income tax rate from 35 percent to 21 percent. Without this adjustment, net earnings for the first quarter of 2018 would have been $30.26 million with an adjusted basic earnings per share of $0.45.

All amounts for the first quarter ended March 31, 2018, include the results of the Company's recent acquisition of Commercial Bancshares, Inc. and its wholly-owned subsidiary, Commercial State Bank, Kingwood, Texas, which was effective January 1, 2018. As of the acquisition date, Commercial State Bank had total assets of approximately $390.20 million, total loans of approximately $271.50 million and total deposits of approximately $345.90 million.

Net interest income for the first quarter of 2018 was $65.45 million compared with $57.02 million in the same quarter of 2017. The net interest margin, on a taxable equivalent basis, was 3.88 percent for the first quarter of 2018 compared to 4.00 percent in the fourth quarter of 2017 and 4.03 percent in the first quarter of 2017. The decrease in the Company's tax equivalent net interest margin in the current quarter when compared with the fourth quarter of 2017 and the first quarter of 2017 resulted from the change in corporate tax rate from 35 percent to 21 percent and the corresponding effect of that change on the Company's tax exempt bond portfolio. Included in interest income for the first quarter of 2018 was $645 thousand, or four basis points in net interest margin, related to discount accretion from fair value accounting related to the Kingwood and Orange acquisitions.  

The provision for loan losses was $1.31 million in the first quarter of 2018 compared with $1.44 million in the fourth quarter of 2017 and $1.95 million in the first quarter of 2017. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.66 percent at March 31, 2018, compared with 0.57 percent at December 31, 2017, and 0.90 percent at March 31, 2017. Classified loans totaled $124.06 million at March 31, 2018, compared to $117.21 million at December 31, 2017, and $122.62 million at March 31, 2017.

Noninterest income increased 14.74 percent in the first quarter of 2018 to $24.42 million compared with $21.29 million in the same quarter a year ago. Trust fees increased $887 thousand to $6.90 million in the first quarter of 2018 compared with $6.02 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $5.23 billion from $4.54 billion a year ago. ATM, interchange and credit card fees increased 13.50 percent to $7.00 million compared with $6.16 million in the same quarter last year due to continued growth in debit cards. Service charges on deposits increased 7.34 percent to $4.88 million compared with $4.55 million in the same quarter a year ago due to continued growth in net new accounts. In addition, a gain on sale of securities totaling $1.22 million was recorded in the first quarter of 2018 compared to $3 thousand in the same quarter of 2017. Offsetting these increases was a decrease in real estate mortgage fees of $484 thousand or 14.16 percent compared to the same quarter a year ago, partially due to a slowdown in refinance activity and the sale of the mortgage servicing portfolio in July 2017.

Noninterest expense for the first quarter of 2018 totaled $47.80 million compared to $42.15 million in the first quarter of 2017. The Company's efficiency ratio in the first quarter of 2018 was 51.76 percent compared with 49.67 percent in the same quarter last year. The increase in noninterest expense in the first quarter of 2018 was primarily a result of an increase in salary and employee benefit costs to $26.20 million compared to $23.26 million in the same quarter a year ago, primarily driven by the acquisition of Commercial State Bank and annual merit based pay increases. Also included in noninterest expense in the first quarter of 2018 were technology contract termination and conversion related costs totaling $1.55 million related to the Commercial State Bank acquisition.

As of March 31, 2018, consolidated assets for the Company totaled $7.57 billion compared to $7.25 billion at December 31, 2017 and $6.93 billion at March 31, 2017. Loans totaled $3.75 billion at quarter end compared with loans of $3.50 billion at December 31, 2017, and $3.39 billion at March 31, 2017. Deposits totaled $6.19 billion at March 31, 2018, compared to $5.96 billion at December 31, 2017, and $5.66 billion at March 31, 2017. Shareholders' equity rose to $969.81 million as of March 31, 2018, compared with $922.77 million at December 31, 2017, and $859.35 million at March 31, 2017. 

"We are pleased to get off to a good start for 2018 with our first quarter earnings performance, especially in light of the additional expenses incurred to complete our acquisition of Commercial State Bank," said F. Scott Dueser, Chairman, President and CEO. "We continue to see strong growth in trust fees and expect our recent acquisition of Commercial State Bank to contribute nicely to our bottom line. Also, we continue to visit with other potential acquisition candidates as well as working diligently on organically growing loans and deposits while reducing expenses to reward our shareholders, customers and employees even more."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial is a financial holding company that through its subsidiary, First Financial Bank, N.A., operates multiple banking regions with 72 locations in Texas, following the close of this acquisition, including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Conroe, Cut and Shoot, Decatur, Eastland, El Campo, Fort Worth, Fulshear, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Kingwood, Magnolia, Mauriceville, Merkel, Midlothian, Mineral Wells, Montgomery, Moran, New Waverly, Newton, Odessa, Orange, Palacios, Port Arthur, Ranger, Rising Star, Roby,  San  Angelo,  Southlake,  Stephenville, Sweetwater, Tomball, Trent, Trophy Club, Vidor, Waxahachie, Weatherford, Willis, 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




2018



2017


ASSETS


Mar. 31, 



 Dec 31,  



 Sept. 30,  



June 30, 



Mar. 31, 


Cash and due from banks

$

130,979


$

209,583


$

177,615


$

163,435


$

163,674


Interest-bearing deposits in banks


67,060



162,764



166,820



53,336



55,165


Interest-bearing time deposits in banks


1,458



1,458



1,458



1,458



1,707


Fed funds sold


-



-



-



3,740



3,840


Investment securities


3,276,193



3,087,473



2,885,483



2,964,618



3,018,393


Loans


3,747,081



3,500,699



3,491,346



3,457,679



3,386,141



Allowance for loan losses


(49,499)



(48,156)



(47,922)



(47,410)



(46,192)


Net loans


3,697,582



3,452,543



3,443,424



3,410,269



3,339,949


Premises and equipment


126,446



124,026



125,668



123,620



122,787


Goodwill


171,565



139,971



139,971



139,971



139,971


Other intangible assets


4,004



1,172



1,384



3,149



3,464


Other assets


92,162



75,725



67,341



83,796



81,420



Total assets

$

7,567,449


$

7,254,715


$

7,009,164


$

6,947,392


$

6,930,370



















LIABILITIES AND SHAREHOLDERS'  EQUITY
















Noninterest-bearing deposits

$

2,111,116


$

2,041,650


$

1,949,174


$

1,856,439


$

1,827,609


Interest-bearing deposits


4,079,647



3,921,311



3,748,286



3,770,170



3,834,359



Total deposits


6,190,763



5,962,961



5,697,460



5,626,609



5,661,968


Borrowings


372,155



331,000



351,435



379,324



360,264


Other liabilities


34,717



37,986



53,713



54,017



48,784


Shareholders' equity


969,814



922,768



906,556



887,442



859,354



Total liabilities and shareholders' equity

$

7,567,449


$

7,254,715


$

7,009,164


$

6,947,392


$

6,930,370





















Quarter Ended




2018



2017


INCOME STATEMENTS


Mar. 31, 



 Dec 31,  



 Sept. 30,  



 June 30,  



Mar. 31, 


Interest income

$

69,082


$

63,456


$

62,554


$

61,182


$

58,783


Interest expense


3,633



2,562



2,866



2,097



1,763


Net interest income


65,449



60,894



59,688



59,085



57,020


Provision for loan losses


1,310



1,440



1,415



1,725



1,950


Net interest income after provision for loan losses


64,139



59,454



58,273



57,360



55,070


Noninterest income


24,423



22,302



24,260



23,170



21,286


Noninterest expense


47,798



44,096



43,964



43,775



42,152



Net income before income taxes


40,764



37,660



38,569



36,755



34,204


Income tax expense


6,245



9,167



9,195



8,500



7,605


Tax benefit from tax rate change


-



(7,650)



-



-



-



Net income

$

34,519


$

36,143


$

29,374


$

28,255


$

26,599



















PER COMMON SHARE DATA 
















Net income - basic

$

0.51


$

0.55


$

0.44


$

0.43


$

0.40


Net income - diluted


0.51



0.54



0.44



0.43



0.40


Cash dividends declared


0.19



0.19



0.19



0.19



0.18


Book Value


14.34



13.93



13.69



13.41



12.99


Market Value

$

46.30


$

45.05


$

45.20


$

44.20


$

40.10


Shares outstanding - end of period


67,612,760



66,260,444



66,223,957



66,170,312



66,131,832


Average outstanding shares - basic


67,527,010



66,191,995



66,140,518



66,100,089



66,073,399


Average outstanding shares - diluted


67,799,545



66,428,871



66,417,281



66,344,943



66,363,222



















PERFORMANCE RATIOS
















Return on average assets


1.84

%


2.02

%


1.65

%


1.64

%


1.57

%

Return on average equity


14.74



15.79



12.95



12.94



12.74


Return on average tangible equity


17.82



18.70



15.38



15.48



15.34


Net interest margin (tax equivalent)


3.88



4.00



3.94



4.05



4.03


Efficiency ratio


51.76



49.37



48.71



49.32



49.67


 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)




















Quarter Ended




2018



2017


ALLOWANCE FOR LOAN LOSSES


Mar. 31, 



 Dec 31,  



 Sept. 30,  



June 30, 



Mar. 31, 


Balance at beginning of period

$

48,156


$

47,922


$

47,410


$

46,192


$

45,779


Loans charged off


(471)



(1,440)



(1,180)



(1,174)



(2,026)


Loan recoveries


504



234



277



667



489


Net recoveries (charge-offs)


33



(1,206)



(903)



(507)



(1,537)


Provision for loan losses


1,310



1,440



1,415



1,725



1,950


Balance at end of period

$

49,499


$

48,156


$

47,922


$

47,410


$

46,192



















Allowance for loan losses / period-end loans


1.32

%


1.38

%


1.37

%


1.37

%


1.36

%

Allowance for loan losses / nonperforming loans


209.80



259.11



243.57



210.95



159.48


Net charge-offs / average loans (annualized)


-



0.14



0.10



0.06



0.18



















SUMMARY OF LOAN CLASSIFICATION
















Special Mention

$

40,079


$

37,079


$

35,237


$

27,999


$

23,341


Substandard


83,976



80,131



86,057



89,609



99,280


Doubtful


-



-



-



-



-



Total classified loans

$

124,055


$

117,210


$

121,294


$

117,608


$

122,621



















NONPERFORMING ASSETS
















Nonaccrual loans

$

22,752


$

17,670


$

18,750


$

21,489


$

28,080


Accruing troubled debt restructured loans


514



627



668



672



695


Accruing loans 90 days past due


327



288



257



314



190



Total nonperforming loans


23,593



18,585



19,675



22,475



28,965


Foreclosed assets


1,276



1,532



2,401



2,245



1,553



Total nonperforming assets

$

24,869


$

20,117


$

22,076


$

24,720


$

30,518



















As a % of loans and foreclosed assets


0.66

%


0.57

%


0.63

%


0.71

%


0.90

%

As a % of end of period total assets


0.33



0.28



0.31



0.36



0.44



















OIL AND GAS PORTFOLIO INFORMATION
















Oil and gas loans

$

86,218


$

60,164


$

69,433


$

70,187


$

75,262


Oil and gas loans as a % of total loans


2.30

%


1.72

%


1.99

%


2.03

%


2.22

%

Classified oil and gas loans


10,485



20,346



21,817



24,404



29,077


Nonaccrual oil and gas loans


1,460



1,414



1,569



2,860



3,208


Net charge-offs for oil and gas loans


-



-



-



50



-


Allowance for oil and gas loans as a % of oil and gas loans


3.64

%


7.90

%


6.03

%


7.24

%


6.59

%


















CAPITAL RATIOS
















Common equity Tier 1 capital ratio


18.62

%


18.66

%


18.35

%


17.79

%


17.56

%

Tier 1 capital ratio


18.62



18.66



18.35



17.79



17.56


Total capital ratio


19.76



19.85



19.54



18.97



18.72


Tier 1 leverage


10.98



11.09



10.84



10.79



10.60


Equity to assets


12.82



12.72



12.93



12.77



12.40






































Quarter Ended




2018



2017


NONINTEREST INCOME


Mar. 31, 



 Dec 31,  



 Sept. 30,  



 June 30,  



Mar. 31, 


Trust fees

$

6,904


$

5,891


$

6,040


$

5,747


$

6,017


Service charges on deposits


4,884



4,900



5,083



4,883



4,550


ATM, interchange and credit card fees


6,996



6,584



6,340



6,598



6,164


Real estate mortgage fees


2,933



3,613



3,891



4,188



3,417


Net gain on sale of available-for-sale securities


1,221



3



1,075



747



3


Net gain (loss) on sale of foreclosed assets


99



(8)



(11)



(72)



41


Net gain (loss) on sale of assets


(91)



(185)



(15)



(200)



4


Interest on loan recoveries


119



232



405



337



154


Other noninterest income


1,358



1,272



1,452



942



936



Total noninterest income

$

24,423


$

22,302


$

24,260


$

23,170


$

21,286



















NONINTEREST EXPENSE
















Salaries and employee benefits, excluding profit sharing

$

24,994


$

22,760


$

23,052


$

22,508


$

22,233


Profit sharing expense


1,209



1,661



1,091



957



1,026


Net occupancy expense


2,883



2,439



2,711



2,771



2,600


Equipment expense


3,516



3,369



3,294



3,665



3,437


FDIC insurance premiums


566



560



561



550



547


ATM, interchange and credit card expenses


2,143



1,935



2,001



1,803



1,713


Legal, tax and professional fees


2,807



2,580



2,396



2,526



2,478


Audit  fees


411



338



356



379



419


Printing, stationery and supplies


486



567



449



536



438


Amortization of intangible assets


387



136



143



165



168


Advertising and public relations


1,575



1,689



1,527



1,576



1,544


Operational and other losses


566



553



1,081



574



985


Software amortization and expense


524



1,056



742



995



500


Other noninterest expense


5,731



4,453



4,560



4,770



4,064



Total noninterest expense

$

47,798


$

44,096


$

43,964


$

43,775


$

42,152



















TAX EQUIVALENT YIELD ADJUSTMENT

$

2,467


$

6,125


$

6,312


$

6,509


$

6,550


 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)


























Three Months Ended




Three Months Ended



Mar. 31, 2018




Dec. 31, 2017




Average



Tax Equivalent



Yield /






Average



Tax Equivalent



Yield /





Balance



Interest



Rate






Balance



Interest



Rate


Interest-earning assets:






















  Fed funds sold

$

6,215


$

27



1.78

%




$

1,192


$

5



1.52

%

  Interest-bearing deposits in nonaffiliated banks


160,399



613



1.55






186,355



645



1.37


  Taxable securities


1,826,391



11,354



2.49






1,562,744



8,977



2.30


  Tax exempt securities


1,352,235



12,559



3.72






1,405,327



16,259



4.63


  Loans


3,748,561



46,995



5.08






3,483,939



43,695



4.98


Total interest-earning assets


7,093,801


$

71,548



4.09

%





6,639,557


$

69,581



4.16

%

Noninterest-earning assets


497,049












441,645









Total assets

$

7,590,850











$

7,081,202































Interest-bearing liabilities:






















  Deposits

$

4,139,324


$

3,519



0.34

%




$

3,795,808


$

2,465



0.26

%

  Fed funds purchased and other borrowings


357,414



113



0.13






343,683



97



0.11


Total interest-bearing liabilities


4,496,738


$

3,632



0.33

%





4,139,491


$

2,562



0.25

%

Noninterest-bearing liabilities                                                                              


2,144,065












2,033,580








Shareholders' equity


950,047












908,131









Total liabilities and shareholders' equity

$

7,590,850











$

7,081,202































Net interest income and margin (tax equivalent)




$

67,916



3.88

%







$

67,019



4.00

%


























Three Months Ended




Three Months Ended



Sept. 30, 2017




June 30, 2017




Average



Tax Equivalent



Yield /






Average



Tax Equivalent



Yield /





Balance



Interest



Rate






Balance



Interest



Rate


Interest-earning assets:






















  Fed funds sold

$

2,467


$

9



1.43

%




$

5,229


$

8



0.64

%

  Interest-bearing deposits in nonaffiliated banks


198,322



629



1.26






45,043



112



1.00


  Taxable securities


1,492,246



8,074



2.16






1,494,187



8,343



2.23


  Tax exempt securities


1,477,559



16,884



4.57






1,528,760



17,414



4.56


  Loans


3,468,524



43,270



4.95






3,418,105



41,814



4.91


Total interest-earning assets


6,639,118


$

68,866



4.12

%





6,491,324


$

67,691



4.18

%

Noninterest-earning assets


431,070












428,245









Total assets

$

7,070,188











$

6,919,569































Interest-bearing liabilities:






















  Deposits

$

3,728,442


$

2,228



0.24

%




$

3,803,412


$

1,930



0.20

%

  Fed funds purchased and other borrowings


524,357



638



0.48






372,910



167



0.18


Total interest-bearing liabilities


4,252,799


$

2,866



0.27

%





4,176,322


$

2,097



0.20

%

Noninterest-bearing liabilities                                                                              


1,917,681












1,867,596








Shareholders' equity


899,708












875,651









Total liabilities and shareholders' equity

$

7,070,188











$

6,919,569































Net interest income and margin (tax equivalent)




$

66,000



3.94

%







$

65,594



4.05

%


























Three Months Ended















Mar. 31, 2017
















Average



Tax Equivalent



Yield /

















Balance



Interest



Rate














Interest-earning assets:






















  Fed funds sold

$

3,529


$

2



0.23

%













  Interest-bearing deposits in nonaffiliated banks


134,556



274



0.83














  Taxable securities


1,367,331



7,431



2.17














  Tax exempt securities


1,529,610



17,561



4.59














  Loans


3,369,599



40,065



4.82














Total interest-earning assets


6,404,625


$

65,333



4.14

%













Noninterest-earning assets


446,961





















Total assets

$

6,851,586











































Interest-bearing liabilities:






















  Deposits

$

3,808,933


$

1,590



0.17

%













  Fed funds purchased and other borrowings


448,217



173



0.16














Total interest-bearing liabilities


4,257,150


$

1,763



0.17

%













Noninterest-bearing liabilities                                                                              


1,747,532




















Shareholders' equity


846,904





















Total liabilities and shareholders' equity

$

6,851,586











































Net interest income and margin (tax equivalent)




$

63,570



4.03

%













 

Cision View original content:http://www.prnewswire.com/news-releases/first-financial-bankshares-announces-first-quarter-earnings-results-300633271.html

SOURCE First Financial Bankshares, Inc.


Source: PR Newswire (April 19, 2018 - 4:05 PM EDT)

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