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Press release from PR Newswire

First Financial Bankshares Announces Third Quarter Earnings Results

Thursday, October 18, 2012

First Financial Bankshares Announces Third Quarter Earnings Results16:00 EDT Thursday, October 18, 2012ABILENE, Texas, Oct. 18, 2012 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2012 of $19.80 million, up 9.47 percent compared with earnings of $18.09 million in the same quarter last year.  Basic earnings per share were $0.63 for the third quarter of 2012 compared with $0.58 in the same quarter a year ago. Net interest income increased 2.11 percent to $39.12 million compared with $38.31 million in 2011. The net interest margin, on a taxable equivalent basis, was 4.26 percent compared with 4.62 percent in the same quarter last year and 4.33 percent in the second quarter of this year.  The provision for loan losses was $787 thousand in the third quarter of 2012, compared with $1.35 million in the same quarter last year and $759 thousand in the second quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.53 percent at September 30, 2012, compared with 1.76 percent at June 30, 2012, and 1.60 percent at September 30, 2011.  Classified loans totaled $76.48 million at September 30, 2012, compared to $80.86 million at June 30, 2012, and $82.99 million at September 30, 2011.Noninterest income increased 11.42 percent in the third quarter of 2012 to $15.50 million compared with $13.91 million in the same quarter a year ago. Trust fees increased to $3.72 million in the third quarter of 2012 compared with $3.27 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $2.75 billion from $2.30 billion a year ago. ATM, interchange and credit card fees increased 6.29 percent to $3.77 million compared with $3.54 million in the same quarter last year.  Service charges on deposit accounts decreased to $4.34 million during the third quarter of 2012 compared with $4.48 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services. The net gain on securities sold during the third quarter of 2012 totaled $1.48 million compared to $67 thousand in the same quarter of 2011.Noninterest expense increased in the third quarter of 2012 to $27.20 million from $26.32 million in the same quarter last year. The Company's efficiency ratio in the third quarter of 2012 improved to 46.61 percent compared with 47.48 percent in the same quarter last year. For the first nine months of 2012, net income increased 9.83 percent to $55.91 million from $50.90 million for the same period a year ago. Basic earnings per share rose to $1.78 in the first nine months of 2012 from $1.62 in the same period last year. Net interest income increased 1.86 percent to $115.93 million in the first nine months of 2012 from $113.81 million a year ago. The provision for loan losses totaled $2.84 million compared with $5.41 million in the first nine months of the previous year. Noninterest income was $42.26 million in the first nine months of 2012 compared with $38.65 million for the same period a year ago. Noninterest expense rose to $80.42 million in the first nine months of 2012 compared with $78.37 million last year.As of September 30, 2012, consolidated assets for the Company totaled $4.31 billion compared with $3.94 billion a year ago. Loans grew 15.91 percent and totaled $2.00 billion at quarter end compared with loans of $1.73 billion a year ago. Total deposits were $3.44 billion as of September 30, 2012, which represents an 8.09 percent growth over $3.19 billion a year earlier.  Shareholders' equity rose to $549.91 million as of September 30, 2012, compared with $499.20 million the prior year.  "This was another good quarter for our company," said F. Scott Dueser, Chairman, President and CEO. "We continue to see good growth in loans and deposits and continue to pursue acquisition prospects to put our capital to use."Additionally, the Company announced today that it will consolidate its eleven charters into one charter, effective at the end of the 2012 fiscal year, subject to regulatory approval. "Due to regulatory, compliance and technology complexities and the opportunity for additional cost savings, we believe it is time to make this enhancement," stated Scott Dueser. "Outside of consolidating the eleven databases, our banks will continue to operate as they do today with local management and board decisions to benefit the customers and communities we serve," added Dueser.About First Financial BanksharesHeadquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 11 separately chartered banks with 54 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:Sept. 30, June 30,Mar. 31, Dec. 31,Sept. 30, Cash and due from banks$128,606$122,534$131,163$146,239$127,174Interest-bearing deposits in banks25,63325,79484,169104,597103,850Interest-bearing time deposits in banks67,50674,59462,01861,17566,688Fed funds sold23,40010,10011,200-3,580Investment securities1,883,8641,963,3671,963,3411,844,9981,732,919Loans2,003,8541,918,2921,798,8671,786,5441,728,832Allowance for loan losses(34,932)(34,747)(34,529)(34,315)(34,301)Net loans1,968,9221,883,5451,764,3381,752,2291,694,531Premises and equipment80,58080,40479,30876,48373,443Goodwill71,86571,86571,86571,86571,865Other intangible assets136175213257341Other assets60,03559,42659,63562,68861,012Total assets$4,310,547$4,291,804$4,227,250$4,120,531$3,935,403LIABILITIES AND SHAREHOLDERS'  EQUITY:Noninterest-bearing deposits$1,200,154$1,156,238$1,125,577$1,101,576$1,020,953Interest-bearing deposits2,244,2442,235,9422,272,4952,233,2222,165,653Total deposits3,444,3983,392,1803,398,0723,334,7983,186,606Short-term borrowings254,480251,428237,567207,756180,790Other liabilities61,757113,93374,60669,44068,808Shareholders' equity549,912534,263517,005508,537499,199Total liabilities and shareholders' equity$4,310,547$4,291,804$4,227,250$4,120,531$3,935,403Quarter Ended20122011INCOME STATEMENTSSept. 30, June 30,Mar. 31, Dec. 31,Sept. 30, Interest income$40,287$39,911$39,797$39,888$40,164Interest expense1,1681,3551,5401,7041,854Net interest income39,11938,55638,25738,18438,310Provision for loan losses7877591,2961,2211,354Net interest income after provision for loan losses38,33237,79736,96136,96336,956Noninterest income15,49913,46413,29812,79213,911Noninterest expense27,20326,74526,46826,25726,320Net income before income taxes26,62824,51623,79123,49824,547Income tax expense6,8286,1656,0356,0326,460Net income$19,800$18,351$17,756$17,466$18,087PER COMMON SHARE DATA Net income - basic$0.63$0.58$0.56$0.56$0.58Net income - diluted0.630.580.560.550.57Cash dividends outstanding - end of period31,488,53031,481,74731,477,48331,459,63531,452,283Average outstanding shares - basic31,484,37531,478,98031,466,70631,454,19731,451,687Average outstanding shares - diluted31,502,17231,497,24131,479,74331,489,30431,481,092PERFORMANCE RATIOSReturn on average assets1.84%1.75%1.73%1.74%1.87%Return on average equity14.5314.0113.7913.8814.79Net interest margin (tax equivalent)4.264.334.394.444.62Efficiency ratio46.6148.0248.0848.3347.48Nine Months EndedSept. 30,INCOME STATEMENTS20122011Interest income$119,994$120,132Interest expense4,0636,320Net interest income115,931113,812Provision for loan losses2,8425,405Net interest income after provision for loan losses113,089108,407Noninterest income42,26138,646Noninterest expense80,41578,367Net income before income taxes74,93568,686Income tax expense19,02817,784Net income$55,907$50,902PER COMMON SHARE DATA Net income - basic$1.78$1.62Net income - diluted1.781.62Cash dividends 0.740.71Book value17.4615.87Market value36.0326.16Shares outstanding - end of period31,488,53031,452,283Average outstanding shares - basic31,476,71531,440,178Average outstanding shares - diluted31,486,70731,488,129PERFORMANCE RATIOSReturn on average assets1.78%1.79%Return on average equity14.1214.65Net interest margin (tax equivalent)4.324.68Efficiency ratio47.5548.39FIRST FINANCIAL BANKSHARES, INC.SELECTED FINANCIAL DATA (UNAUDITED)(In thousands)Quarter Ended20122011ALLOWANCE FOR LOAN LOSSESSept. 30,June 30,Mar. 31, Dec. 31,Sept. 30, Balance at beginning of period$34,747$34,529$34,315$34,301$33,406Loans charged off(1,064)(766)(1,405)(2,195)(722)Loan recoveries462225323988263Net charge-offs(602)(541)(1,082)(1,207)(459)Provision for loan losses7877591,2961,2211,354Balance at end of period$34,932$34,747$34,529$34,315$34,301Allowance for loan losses /     period-end loans1.74%1.81%1.92%1.92%1.98%Allowance for loan losses /     nonperforming loans143.4130.1164.3171.0194.3Net charge-offs / average loans     (annualized) ASSETSNonaccrual loans$24,283$26,606$20,963$19,975$17,598Accruing loans 90 days past due69105539652Total nonperforming loans24,35226,71121,01620,07117,650Foreclosed assets6,3737,1497,8529,46410,254Total nonperforming assets$30,725$33,860$28,868$29,535$27,904As a % of loans and foreclosed assets1.53%1.76%1.60%1.64%1.60%As a % of end of period total assets0.710.790.680.720.71CAPITAL RATIOSTier 1 risk-based17.66%17.23%17.73%17.49%17.89%Total risk-based18.9218.4818.9918.7419.14Tier 1 leverage10.4910.3610.3110.3310.45Equity to assets12.7612.4512.2312.3412.68Quarter Ended20122011NONINTEREST INCOMESept. 30,June 30,Mar. 31, Dec. 31,Sept. 30, Trust fees$3,723$3,670$3,454$3,151$3,265Service charges on deposits4,3374,0423,8824,3134,482ATM, interchange and credit card fees3,7673,7843,6763,5513,544Real estate mortgage fees1,4951,2181,0501,0131,056Net gain on sale of available-for-sale securities1,47938234616467Net gain (loss) on sale of foreclosed assets(106)(404)6(159)18Net gain (loss) on sale of assets(32)10512243588Other noninterest income836667762716891Total noninterest income$15,499$13,464$13,298$12,792$13,911NONINTEREST EXPENSESalaries and employee benefits, excluding profit sharing$13,502$13,304$13,186$12,753$12,790Profit sharing expense1,3438851,0431,1531,318Net occupancy expense1,8061,7431,7371,7071,823Equipment expense2,2692,1442,1082,0081,970FDIC insurance premiums563565527517561ATM, interchange and credit card expenses1,3171,4501,2491,3111,276Legal, tax and professional fees1,0199681,033994947Audit  fees311283295304305Printing, stationery and supplies468511505473443Amortization of intangible assets38384484101Advertising and public relations9989539421,1051,033Correspondent bank service charges220216200198198Other noninterest expense3,3493,6853,5993,6503,555Total noninterest expense$27,203$26,745$26,468$26,257$26,320TAX EQUIVALENT YIELD ADJUSTMENT$3,743$3,673$3,495$3,348$3,209Nine Months EndedSept. 30,NONINTEREST INCOME20122011Trust fees$10,848$9,520Service charges on deposits12,26113,376ATM, interchange and credit card fees11,22610,036Real estate mortgage fees3,7632,930Net gain on sale of available-for-sale securities2,206328Net gain (loss) on sale of foreclosed assets(512)(1,156)Net gain (loss) on sale of assets203854Other noninterest income2,2662,758Total noninterest income$42,261$38,646NONINTEREST EXPENSESalaries and employee benefits, excluding profit sharing$39,993$38,816Profit sharing expense3,2703,535Net occupancy expense5,2865,154Equipment expense6,5215,792FDIC insurance premiums1,6552,129ATM, interchange and credit card expenses4,0173,607Legal, tax and professional fees3,0203,217Audit  fees889855Printing, stationery and supplies1,4831,359Amortization of intangible assets120317Advertising and public relations2,8932,711Correspondent bank service charges636606Other noninterest expense10,63210,269Total noninterest expense$80,415$78,367TAX EQUIVALENT YIELD ADJUSTMENT$10,911$9,503 FIRST FINANCIAL BANKSHARES, INC.SELECTED FINANCIAL DATA (UNAUDITED)(In thousands)Three Months EndedSept. 30, 2012AverageTax EquivalentYield /BalanceInterestRateInterest-earning assets:  Fed funds sold$23,924$10.01%  Interest-bearing deposits in nonaffiliated banks96,8781850.76%  Taxable securities1,121,4657,4802.67%  Tax exempt securities795,7279,9124.98%  Loans1,967,78926,4525.35%Total interest-earning assets4,005,78344,0304.37%Noninterest-earning assets274,379Total assets$4,280,162Interest-bearing liabilities:  Deposits$2,240,977$1,0940.19%  Fed funds purchased and other short term  borrowings289,568740.10%Total interest-bearing liabilities2,530,5451,1680.18%Noninterest-bearing liabilities1,207,352Shareholders' equity542,265Total liabilities and shareholders' equity$4,280,162Net interest income and margin (tax equivalent)$42,8624.26%Nine Months EndedSept. 30, 2012AverageTax EquivalentYield /BalanceInterestRateInterest-earning assets:  Fed funds sold$11,453$90.10%  Interest-bearing deposits in nonaffiliated banks119,3796150.69%  Taxable securities1,174,24924,4982.78%  Tax exempt securities747,61429,1505.20%  Loans1,867,82976,6335.48%Total interest-earning assets3,920,524130,9054.46%Noninterest-earning assets282,235Total assets$4,202,759Interest-bearing liabilities:  Deposits$2,251,221$3,8870.23%  Fed funds purchased and other short term  borrowings257,0901760.09%Total interest-bearing liabilities2,508,3114,0630.22%Noninterest-bearing liabilities1,165,450Shareholders' equity528,998Total liabilities and shareholders' equity$4,202,759Net interest income and margin (tax equivalent)$126,8424.32%     SOURCE First Financial Bankshares, Inc.For further information: J. Bruce Hildebrand, Executive Vice President, +1-325-627-7155