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8-K - FORM 8-K - FIRST FINANCIAL BANKSHARES INCd570591d8k.htm

Exhibit 99.1

 

For immediate release    For More Information:
   J. Bruce Hildebrand, Executive Vice President
   325.627.7155

FIRST FINANCIAL BANKSHARES ANNOUNCES

SECOND QUARTER EARNINGS RESULTS

ABILENE, Texas, July 18, 2013 – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2013 of $19.49 million, up 6.21 percent compared with earnings of $18.35 million in the same quarter last year. Basic earnings per share were $0.62 for the second quarter of 2013 compared with $0.58 in the same quarter a year ago.

All amounts for the second quarter of 2013 include the results of the Company’s acquisition of Orange Savings Bank, SSB, Orange, Texas, which was effective on May 31, 2013. As of May 31, 2013, Orange had total loans of $293.29 million and total deposits of $385.95 million.

Net interest income increased 7.64 percent to $41.50 million compared with $38.56 million in 2012. The net interest margin, on a taxable equivalent basis, was 4.18 percent compared with 4.33 percent in the same quarter last year and 4.19 percent in the first quarter of this year.

The provision for loan losses was $832 thousand in the second quarter of 2013 compared with $759 thousand in the same quarter last year and $401 thousand in the first quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.20 percent at June 30, 2013, compared with 1.20 percent at March 31, 2013, and 1.76 percent at June 30, 2012. Classified loans totaled $87.83 million at June 30, 2013, compared to $70.18 million at March 31, 2013, and $80.86 million at June 30, 2012. The increase in dollar amount of nonperforming assets and classified loans was primarily from the Orange Savings Bank, SSB acquisition.

Noninterest income increased 12.54 percent in the second quarter of 2013 to $15.15 million compared with $13.46 million in the same quarter a year ago. Trust fees increased to $3.95 million in the second quarter of 2013 compared with $3.67 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.05 billion from $2.65 billion a year ago. ATM, interchange and credit card fees increased 10.49 percent to $4.18 million compared with $3.78 million in the same quarter last year. Real estate mortgage income increased to $1.69 million in the second quarter of 2013 compared with $1.22 million in the same quarter a year ago.

Noninterest expense increased in the second quarter of 2013 to $29.91 million from $26.75 million in the same quarter last year. The Company’s efficiency ratio in the second quarter of 2013 was 49.25 percent compared with 48.02 percent in the same quarter last year. Healthcare expenses for the second quarter of 2013 totaled $1.28 million compared to $833 thousand in the same quarter a year ago. Also included in noninterest expense in the second quarter of 2013 was $232 thousand and $226 thousand related to the acquisition of Orange Savings Bank, SSB and database consolidation technology costs, respectively.


For the first half of 2013, net income increased 5.43 percent to $38.07 million from $36.11 million a year ago. Basic earnings per share rose to $1.20 in the first half of 2013 from $1.15 in the same period last year. Net interest income increased 4.37 percent to $80.17 million in the first half of 2013 from $76.81 million in the same period a year ago. The provision for loan losses totaled $1.23 million compared with $2.06 million in the first half of the previous year. Noninterest income was $29.11 million in the first half of 2013 compared with $26.76 million a year ago. Noninterest expense rose to $57.38 million in the first half of 2013 compared with $53.21 million last year.

As of June 30, 2013, consolidated assets for the Company totaled $4.98 billion compared with $4.29 billion a year ago. Loans totaled $2.58 billion at quarter end compared to $1.92 billion a year ago. Total deposits were $3.92 billion as of June 30, 2013, versus $3.39 billion a year earlier. Shareholders’ equity rose to $575.86 million as of June 30, 2013, compared with $534.26 million at June 30, 2012.

“We are pleased to report another positive quarter and are excited about our Orange acquisition and welcome their employees and customers to First Financial,” 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 Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 61 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Mauriceville, McLewis, Merkel, Midlothian, Mineral Wells, Moran, Newton, Odessa, Orange, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Stephenville, Sweetwater, Trent, Trophy Club, Vidor, Waxahachie, Weatherford and Willow Park. 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)

 

     As of  
     2013     2012  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  

ASSETS:

          

Cash and due from banks

   $ 138,087      $ 113,958      $ 207,018      $ 128,606      $ 122,534   

Interest-bearing deposits in banks

     6,624        20,065        139,676        25,633        25,794   

Interest-bearing time deposits in banks

     39,350        45,172        49,005        67,506        74,594   

Fed funds sold

     16,025        3,175        14,045        23,400        10,100   

Investment securities

     1,975,490        1,959,054        1,820,096        1,883,864        1,963,367   

Loans

     2,578,883        2,138,137        2,088,623        2,003,854        1,918,292   

Allowance for loan losses

     (34,099     (34,672     (34,839     (34,932     (34,747
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

     2,544,784        2,103,465        2,053,784        1,968,922        1,883,545   

Premises and equipment

     94,808        86,265        84,122        80,580        80,404   

Goodwill

     94,882        71,865        71,865        71,865        71,865   

Other intangible assets

     2,366        98        108        136        175   

Other assets

     70,189        52,863        62,293        60,035        59,426   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,982,605      $ 4,455,980      $ 4,502,012      $ 4,310,547      $ 4,291,804   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY:

          

Noninterest-bearing deposits

   $ 1,305,049      $ 1,237,840      $ 1,311,708      $ 1,200,154      $ 1,156,238   

Interest-bearing deposits

     2,612,540        2,312,286        2,320,876        2,244,244        2,235,942   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     3,917,589        3,550,126        3,632,584        3,444,398        3,392,180   

Short-term borrowings

     431,575        263,345        259,697        254,480        251,428   

Other liabilities

     57,577        78,257        52,768        61,757        113,933   

Shareholders’ equity

     575,864        564,252        556,963        549,912        534,263   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 4,982,605      $ 4,455,980      $ 4,502,012      $ 4,310,547      $ 4,291,804   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Quarter Ended  
     2013     2012  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  

INCOME STATEMENTS

          

Interest income

   $ 42,446      $ 39,575      $ 39,801      $ 40,287      $ 39,911   

Interest expense

     946        904        1,049        1,168        1,355   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     41,500        38,671        38,752        39,119        38,556   

Provision for loan losses

     832        401        642        787        759   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     40,668        38,270        38,110        38,332        37,797   

Noninterest income

     15,153        13,960        14,948        15,499        13,464   

Noninterest expense

     29,911        27,471        28,633        27,203        26,745   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income before income taxes

     25,910        24,759        24,425        26,628        24,516   

Income tax expense

     6,420        6,182        6,107        6,828        6,165   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 19,490      $ 18,577      $ 18,318      $ 19,800      $ 18,351   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PER COMMON SHARE DATA

          

Net income - basic

   $ 0.62      $ 0.59      $ 0.58      $ 0.63      $ 0.58   

Net income - diluted

     0.61        0.59        0.58        0.63        0.58   

Cash dividends declared

     0.26        0.25        0.25        0.25        0.25   

Shares outstanding - end of period

     31,967,424        31,519,973        31,496,881        31,488,530        31,481,747   

Average outstanding shares - basic

     31,683,355        31,507,975        31,490,402        31,484,375        31,478,980   

Average outstanding shares - diluted

     31,809,840        31,601,364        31,530,907        31,502,172        31,497,241   

PERFORMANCE RATIOS

          

Return on average assets

     1.67     1.71     1.68     1.84     1.75

Return on average equity

     13.53        13.41        13.09        14.53        14.01   

Net interest margin (tax equivalent)

     4.18        4.19        4.17        4.26        4.33   

Efficiency ratio

     49.25        48.68        49.86        46.61        48.02   

 

     Six Months Ended  
     June 30,  
     2013     2012  

INCOME STATEMENTS

    

Interest income

   $ 82,022      $ 79,708   

Interest expense

     1,851        2,895   
  

 

 

   

 

 

 

Net interest income

     80,171        76,813   

Provision for loan losses

     1,233        2,055   
  

 

 

   

 

 

 

Net interest income after provision for loan losses

     78,938        74,758   

Noninterest income

     29,113        26,762   

Noninterest expense

     57,382        53,213   
  

 

 

   

 

 

 

Net income before income taxes

     50,669        48,307   

Income tax expense

     12,602        12,200   
  

 

 

   

 

 

 

Net income

   $ 38,067      $ 36,107   
  

 

 

   

 

 

 

PER COMMON SHARE DATA

    

Net income - basic

   $ 1.20      $ 1.15   

Net income - diluted

     1.20        1.15   

Cash dividends

     0.51        0.49   

Book Value

     18.01        16.97   

Market Value

     55.66        34.56   

Shares outstanding - end of period

     31,967,424        31,481,747   

Average outstanding shares - basic

     31,596,150        31,472,843   

Average outstanding shares - diluted

     31,709,971        31,474,653   

PERFORMANCE RATIOS

    

Return on average assets

     1.69     1.74

Return on average equity

     13.47        13.90   

Net interest margin (tax equivalent)

     4.18        4.36   

Efficiency ratio

     48.98        48.05   


FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Quarter Ended  
     2013     2012  
     June 30,     Mar. 31,     Dec. 31,     Sept. 30,     June 30,  

ALLOWANCE FOR LOAN LOSSES

          

Balance at beginning of period

   $ 34,672      $ 34,839      $ 34,932      $ 34,747      $ 34,529   

Loans charged off

     (1,570     (823     (1,119     (1,064     (766

Loan recoveries

     165        255        384        462        225   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net charge-offs

     (1,405     (568     (735     (602     (541

Provision for loan losses

     832        401        642        787        759   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   $ 34,099      $ 34,672      $ 34,839      $ 34,932      $ 34,747   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses / period-end loans

     *1.32     1.62     1.67     1.74     1.81

Allowance for loan losses / nonperforming loans

     128.75        153.87        159.10        143.45        130.08   

Net charge-offs / average loans (annualized)

     0.24        0.11        0.14        0.12        0.12   

 

* Reflects the impact of loans acquired in the Orange Savings Bank, SSB acquisition, which were initially recorded at fair value with no allocated allowance for loan losses

 

NONPERFORMING ASSETS

          

Nonaccrual loans

   $ 26,297      $ 22,509      $ 21,800      $ 24,283      $ 26,606   

Accruing loans 90 days past due

     187        24        97        69        105   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     26,484        22,533        21,897        24,352        26,711   

Foreclosed assets

     4,589        3,185        3,565        6,373        7,149   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 31,073      $ 25,718      $ 25,462      $ 30,725      $ 33,860   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

As a % of loans and foreclosed assets

     1.20     1.20     1.22     1.53     1.76

As a % of end of period total assets

     0.62        0.58        0.57        0.71        0.79   

CAPITAL RATIOS

          

Tier 1 risk-based

     15.20     17.54     17.43     17.66     17.23

Total risk-based

     16.31        18.80        18.68        18.92        18.48   

Tier 1 leverage

     10.32        10.69        10.60        10.49        10.36   

Equity to assets

     11.56        12.66        12.37        12.76        12.45   

 

     Quarter Ended  
     2013     2012  
     June 30,      Mar. 31,     Dec. 31,      Sept. 30,     June 30,  

NONINTEREST INCOME

            

Trust fees

   $ 3,953       $ 3,793      $ 3,616       $ 3,723      $ 3,670   

Service charges on deposits

     4,316         3,895        4,432         4,337        4,042   

ATM, interchange and credit card fees

     4,181         3,729        3,961         3,767        3,784   

Real estate mortgage fees

     1,686         1,384        1,331         1,495        1,218   

Net gain on sale of available-for-sale securities

     33         222        565         1,479        382   

Net gain (loss) on sale of foreclosed assets

     17         (316     162         (106     (404

Net gain (loss) on sale of assets

     1         168        5         (32     105   

Other noninterest income

     966         1,085        876         836        667   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest income

   $ 15,153       $ 13,960      $ 14,948       $ 15,499      $ 13,464   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

NONINTEREST EXPENSE

            

Salaries and employee benefits, excluding profit sharing

   $ 14,968       $ 14,101      $ 13,565       $ 13,502      $ 13,304   

Profit sharing expense

     1,183         1,079        1,441         1,343        885   

Net occupancy expense

     2,064         1,766        1,790         1,806        1,743   

Equipment expense

     2,380         2,281        2,269         2,269        2,144   

FDIC insurance premiums

     568         572        565         563        565   

ATM, interchange and credit card expenses

     1,347         1,340        1,432         1,317        1,450   

Legal, tax and professional fees

     1,272         993        1,162         1,019        968   

Audit fees

     351         334        323         311        283   

Printing, stationery and supplies

     498         472        487         468        511   

Amortization of intangible assets

     33         10        28         38        38   

Advertising and public relations

     1,100         994        1,085         998        953   

Correspondent bank service charges

     222         202        220         220        216   

Other noninterest expense

     3,925         3,327        4,266         3,349        3,685   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest expense

   $ 29,911       $ 27,471      $ 28,633       $ 27,203      $ 26,745   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

TAX EQUIVALENT YIELD ADJUSTMENT

   $ 4,082       $ 3,795      $ 3,727       $ 3,743      $ 3,673   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

     Six Months Ended  
     June 30,  
     2013     2012  

NONINTEREST INCO ME

    

Trust fees

   $ 7,746      $ 7,124   

Service charges on deposits

     8,211        7,924   

ATM, interchange and credit card fees

     7,910        7,460   

Real estate mortgage fees

     3,069        2,268   

Net gain on sale of available-for-sale securities

     255        728   

Net gain (loss) on sale of foreclosed assets

     (299     (406

Net gain (loss) on sale of assets

     169        235   

Other noninterest income

     2,052        1,429   
  

 

 

   

 

 

 

Total Noninterest Income

   $ 29,113      $ 26,762   
  

 

 

   

 

 

 

NONINTEREST EXPENSE

    

Salaries and employee benefits, excluding profit sharing

   $ 29,069      $ 26,491   

Profit sharing expense

     2,262        1,927   

Net occupancy expense

     3,831        3,480   

Equipment expense

     4,661        4,252   

FDIC Insurance premiums

     1,141        1,093   

ATM, interchange and credit card expenses

     2,687        2,699   

Legal, tax and professional fees

     2,265        2,002   

Audit fees

     685        578   

Printing, stationery and supplies

     970        1,015   

Amortization of intangible assets

     43        82   

Advertising and public relations

     2,094        1,894   

Correspondent bank service charges

     424        416   

Other noninterest expense

     7,250        7,284   
  

 

 

   

 

 

 

Total Noninterest Expense

   $ 57,382      $ 53,213   
  

 

 

   

 

 

 

TAX EQUIVALENT YIELD ADJUSTMENT

   $ 7,877      $ 7,167   
  

 

 

   

 

 

 


FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Three Months Ended  
     June 30, 2013  
     Average      Tax Equivalent      Yield /  
     Balance      Interest      Rate  

Interest-earning assets:

        

Fed funds sold

   $ 5,918       $ 9         0.58

Interest-bearing deposits in nonaffiliated banks

     59,333         111         0.75

Taxable securities

     1,066,586         6,313         2.37

Tax exempt securities

     917,460         10,813         4.71

Loans

     2,324,268         29,282         5.05
  

 

 

    

 

 

    

 

 

 

Total interest-earning assets

     4,373,565         46,528         4.27

Noninterest-earning assets

     305,201         
  

 

 

       

Total assets

   $ 4,678,766         
  

 

 

       

Interest-bearing liabilities:

        

Deposits

   $ 2,403,899       $ 853         0.14

Fed funds purchased and other short term borrowings

     405,438         93         0.09
  

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

     2,809,337         946         0.14

Noninterest-bearing liabilities

     1,291,602         

Shareholders’ equity

     577,827         
  

 

 

       

Total liabilities and shareholders’ equity

   $ 4,678,766         
  

 

 

       
        
     

 

 

    

Net interest income and margin (tax equivalent)

      $ 45,582         4.18
     

 

 

    

 

 

 
     Six Months Ended  
     June 30, 2013  
     Average      Tax Equivalent      Yield /  
     Balance      Interest      Rate  

Interest-earning assets:

        

Fed funds sold

   $ 9,570       $ 14         0.30

Interest-bearing deposits in nonaffiliated banks

     91,830         281         0.62

Taxable securities

     1,052,723         12,688         2.41

Tax exempt securities

     871,459         20,886         4.79

Loans

     2,218,292         56,030         5.09
  

 

 

    

 

 

    

 

 

 

Total interest-earning assets

     4,243,874         89,899         4.27

Noninterest-earning assets

     302,071         
  

 

 

       

Total assets

   $ 4,545,945         
  

 

 

       

Interest-bearing liabilities:

        

Deposits

   $ 2,362,645       $ 1,721         0.15

Fed funds purchased and other short term borrowings

     338,549         130         0.08
  

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

     2,701,194         1,851         0.14

Noninterest-bearing liabilities

     1,274,970         

Shareholders’ equity

     569,781         
  

 

 

       

Total liabilities and shareholders’ equity

   $ 4,545,945         
  

 

 

       
        
     

 

 

    

Net interest income and margin (tax equivalent)

      $ 88,048         4.18