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Press release from PR Newswire

First Financial Bankshares Announces Second Quarter Earnings Results

Thursday, July 19, 2012

First Financial Bankshares Announces Second Quarter Earnings Results16:05 EDT Thursday, July 19, 2012ABILENE, 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 BanksharesHeadquartered 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 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 Ended20122011ASSETS:June 30,Mar. 31, Dec. 31,Sept. 30, June 30,Cash and due from banks$122,534$131,163$146,239$127,174$106,500Interest-bearing deposits in banks25,79484,169104,597103,850114,776Interest-bearing time deposits in banks74,59462,01861,17566,68878,312Fed funds sold10,10011,200-3,5803,195Investment securities1,963,3671,963,3411,844,9981,732,9191,646,655Loans1,918,2921,798,8671,786,5441,728,8321,719,415Allowance for loan losses(34,747)(34,529)(34,315)(34,301)(33,406)Net loans1,883,5451,764,3381,752,2291,694,5311,686,009Premises and equipment80,40479,30876,48373,44372,550Goodwill71,86571,86571,86571,86571,865Other intangible assets175213257341442Other assets59,42659,63562,68861,01260,711Total assets$4,291,804$4,227,250$4,120,531$3,935,403$3,841,015LIABILITIES AND SHAREHOLDERS'  EQUITY:Noninterest-bearing deposits$1,156,238$1,125,577$1,101,576$1,020,953$989,271Interest-bearing deposits2,235,9422,272,4952,233,2222,165,6532,130,170Total deposits3,392,1803,398,0723,334,7983,186,6063,119,441Short-term borrowings251,428237,567207,756180,790192,364Other liabilities113,93374,60669,44068,80851,505Shareholders' equity534,263517,005508,537499,199477,705Total liabilities and shareholders' equity$4,291,804$4,227,250$4,120,531$3,935,403$3,841,015Quarter Ended20122011INCOME STATEMENTSJune 30,Mar. 31, Dec. 31,Sept. 30, June 30,Interest income$39,911$39,797$39,888$40,164$40,241Interest expense1,3551,5401,7041,8542,065Net interest income38,55638,25738,18438,31038,176Provision for loan losses7591,2961,2211,3541,924Net interest income after provision for loan losses37,79736,96136,96336,95636,252Noninterest income13,46413,29812,79213,91111,894Noninterest expense26,74526,46826,25726,32025,888Net income before income taxes24,51623,79123,49824,54722,258Income tax expense6,1656,0356,0326,4605,738Net income$18,351$17,756$17,466$18,087$16,520PER COMMON SHARE DATA Net income - basic$0.58$0.56$0.56$0.58$0.53Net income - diluted0.580.560.550.570.52Cash dividends outstanding - end of period31,481,74731,477,48331,459,63531,452,28331,451,300Average outstanding shares - basic31,478,98031,466,70631,454,19731,451,68731,442,978Average outstanding shares - diluted31,497,24131,479,74331,489,30431,481,09231,467,617PERFORMANCE RATIOSReturn on average assets1.75%1.73%1.74%1.87%1.74%Return on average equity14.0113.7913.8814.7914.29Net interest margin (tax equivalent)4.334.394.444.624.69Efficiency ratio48.0248.0848.3347.4848.65Six Months EndedJune 30,INCOME STATEMENTS20122011Interest income$79,708$79,968Interest expense2,8954,466Net interest income76,81375,502Provision for loan losses2,0554,051Net interest income after provision for loan losses74,75871,451Noninterest income26,76224,736Noninterest expense53,21352,048Net income before income taxes48,30744,139Income tax expense12,20011,324Net income$36,107$32,815PER COMMON SHARE DATA Net income - basic$1.15$1.04Net income - diluted1.151.04Cash dividends 0.490.47Book Value16.9715.19Market Value34.5634.45Shares outstanding - end of period31,481,74731,451,300Average outstanding shares - basic31,472,84331,434,328Average outstanding shares - diluted31,474,65331,457,286PERFORMANCE RATIOSReturn on average assets1.74%1.75%Return on average equity13.9014.57Net interest margin (tax equivalent)4.364.71Efficiency ratio48.0548.86 FIRST FINANCIAL BANKSHARES, INC.SELECTED FINANCIAL DATA (UNAUDITED)(In thousands)Quarter Ended20122011ALLOWANCE FOR LOAN LOSSESJune 30,Mar. 31, Dec. 31,Sept. 30, June 30,Balance at beginning of period$34,529$34,315$34,301$33,406$32,501Loans charged off(766)(1,405)(2,195)(722)(1,396)Loan recoveries225323988263377Net charge-offs(541)(1,082)(1,207)(459)(1,019)Provision for loan losses7591,2961,2211,3541,924Balance at end of period$34,747$34,529$34,315$34,301$33,406Allowance for loan losses /     period-end loans1.81%1.92%1.92%1.98%1.94%Allowance for loan losses /     nonperforming loans130.1164.3171.0194.3179.6Net charge-offs / average loans     (annualized) ASSETSNonaccrual loans$26,606$20,963$19,975$17,598$18,599Accruing loans 90 days past due1055396526Total nonperforming loans26,71121,01620,07117,65018,605Foreclosed assets7,1497,8529,46410,2548,778Total nonperforming assets$33,860$28,868$29,535$27,904$27,383As a % of loans and foreclosed assets1.76%1.60%1.64%1.60%1.58%As a % of end of period total assets0.790.680.720.710.71CAPITAL RATIOSTier 1 Risk-based17.23%17.73%17.49%17.89%17.97%Total Risk-based18.4818.9918.7419.1419.22Tier 1 Leverage10.3610.3110.3310.4510.22Equity to assets12.4512.2312.3412.6812.44Quarter Ended20122011NONINTEREST INCOMEJune 30,Mar. 31, Dec. 31,Sept. 30, June 30,Trust fees$3,670$3,454$3,151$3,265$3,211Service charges on deposits4,0423,8824,3134,4824,520ATM, interchange and credit card fees3,7843,6763,5513,5443,415Real estate mortgage fees1,2181,0501,0131,056941Net gain on sale of available-for-sale securities3823461646742Net gain (loss) on sale of foreclosed assets(404)6(159)18(1,111)Net gain (loss) on sale of assets10512243588123Other noninterest income667762716891753Total Noninterest Income$13,464$13,298$12,792$13,911$11,894NONINTEREST EXPENSESalaries and employee benefits, excluding profit sharing$13,304$13,186$12,753$12,790$12,916Profit sharing expense8851,0431,1531,3181,092Net occupancy expense1,7431,7371,7071,8231,685Equipment expense2,1442,1082,0081,9701,951FDIC Insurance premiums565527517561597ATM, interchange and credit card expenses1,4501,2491,3111,2761,183Legal, tax and professional fees9681,0339949471,077Audit  fees283295304305276Printing, stationery and supplies511505473443489Amortization of intangible assets384484101105Advertising and public relations9539421,1051,033870Correspondent bank service charges216200198198208Other noninterest expense3,6853,5993,6503,5553,439Total Noninterest Expense$26,745$26,468$26,257$26,320$25,888TAX EQUIVALENT YIELD ADJUSTMENT$3,673$3,495$3,348$3,209$3,145Six Months EndedJune 30,NONINTEREST INCOME20122011Trust fees$7,124$6,254Service charges on deposits7,9248,894ATM, interchange and credit card fees7,4606,491Real estate mortgage fees2,2681,874Net gain on sale of available-for-sale securities728261Net gain (loss) on sale of foreclosed assets(406)(1,174)Net gain (loss) on sale of assets235266Other noninterest income1,4291,870Total Noninterest Income$26,762$24,736NONINTEREST EXPENSESalaries and employee benefits, excluding profit sharing$26,491$26,027Profit sharing expense1,9272,216Net occupancy expense3,4803,332Equipment expense4,2523,822FDIC Insurance premiums1,0931,568ATM, interchange and credit card expenses2,6992,330Legal, tax and professional fees2,0022,328Audit  fees578549Printing, stationery and supplies1,015916Amortization of intangible assets82216Advertising and public relations1,8941,678Correspondent bank service charges416408Other noninterest expense7,2846,658Total Noninterest Expense$53,213$52,048TAX EQUIVALENT YIELD ADJUSTMENT$7,167$6,294FIRST FINANCIAL BANKSHARES, INC.SELECTED FINANCIAL DATA (UNAUDITED)(In thousands)Three Months EndedJune 30, 2012AverageTax EquivalentYield /BalanceInterestRateInterest-earning assets:  Fed funds sold$6,671$60.35%  Interest-bearing deposits in nonaffiliated banks128,4732210.69%  Taxable securities1,185,0818,2142.77%  Tax exempt securities755,5119,8625.22%  Loans1,850,40825,2815.49%Total interest-earning assets3,926,14443,5844.46%Noninterest-earning assets281,042Total assets$4,207,186Interest-bearing liabilities:  Deposits$2,260,319$1,3100.23%  Fed funds purchased and other short term borrowings239,599450.08%Total interest-bearing liabilities2,499,9181,3550.22%Noninterest-bearing liabilities                                                                              1,180,367Shareholders' equity526,901Total liabilities and shareholders' equity$4,207,186Net interest income and margin (tax equivalent)$42,2294.33%Six Months EndedJune 30, 2012AverageTax EquivalentYield /BalanceInterestRateInterest-earning assets:  Fed funds sold$5,148$80.32%  Interest-bearing deposits in nonaffiliated banks130,7534300.66%  Taxable securities1,200,93217,0182.83%  Tax exempt securities723,29419,2375.32%  Loans1,817,30050,1825.55%Total interest-earning assets3,877,42786,8754.51%Noninterest-earning assets286,204Total assets$4,163,631Interest-bearing liabilities:  Deposits$2,256,399$2,7930.25%  Fed funds purchased and other short term borrowings240,6721020.09%Total interest-bearing liabilities2,497,0712,8950.23%Noninterest-bearing liabilities                                                                              1,144,268Shareholders' equity522,292Total liabilities and shareholders' equity$4,163,631Net interest income and margin (tax equivalent)$83,9804.36% SOURCE First Financial Bankshares, Inc.For further information: J. Bruce Hildebrand, Executive Vice President, +1-325-627-7155