EX-99.1 2 d703241dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

For immediate release  

For More Information:

 

J. Bruce Hildebrand, Executive Vice President

 

325.627.7155

FIRST FINANCIAL BANKSHARES ANNOUNCES FIRST QUARTER EARNINGS RESULTS

ABILENE, Texas, April 18, 2019—The Board of Directors of First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2019 of $38.25 million, up $3.73 million when compared with earnings of $34.52 million in the same quarter last year. Basic earnings per share were $0.56 for the first quarter of 2019 compared with $0.51 in the same quarter a year ago.

Net interest income for the first quarter of 2019 was $69.51 million compared with $65.45 million in the same quarter of 2018. The net interest margin, on a taxable equivalent basis, was 4.00 percent for the first quarter of 2019 compared to 4.02 percent in the fourth quarter of 2018 and 3.88 percent in the first quarter of 2018. Included in interest income for the first quarter of 2019 was $466 thousand, or two 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 $965 thousand in the first quarter of 2019 compared with $1.80 million in the fourth quarter of 2018 and $1.31 million in the first quarter of 2018. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.74 percent at March 31, 2019, compared with 0.75 percent at December 31, 2018, and 0.66 percent at March 31, 2018. Classified loans totaled $118.43 million at March 31, 2019, compared to $126.30 million at December 31, 2018, and $124.06 million at March 31, 2018.

Noninterest income in the first quarter of 2019 rose to $24.44 million compared with $24.42 million in the same quarter a year ago. Trust fees increased $75 thousand to $6.98 million in the first quarter of 2019 compared with $6.90 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $6.06 billion from $5.23 billion a year ago. Service charges on deposits increased 5.98 percent to $5.18 million compared with $4.88 million in the same quarter a year ago due to continued growth in net new accounts. Real estate mortgage fees increased 18.45 percent in the first quarter of 2019 to $3.47 million compared with $2.93 million in the same quarter a year ago. Offsetting these increases in the first quarter of 2019 was a decrease in gain on sale of securities of $1.22 million when compared to the same quarter of 2018.

Noninterest expense for the first quarter of 2019 totaled $47.37 million compared to $47.80 million in the first quarter of 2018. The Company’s efficiency ratio in the first quarter of 2019 was 49.46 percent compared with 51.76 percent in the same quarter last year. The decrease in noninterest expense in the first quarter of 2019 when compared to the same quarter a year ago was primarily related to the Company recording $1.55 million in the first quarter of 2018 related to contract termination and conversion costs associated with the Kingwood acquisition. During the first quarter of 2019, salary and employee benefit costs rose to $27.42 million compared to $26.20 million in the same quarter a year ago, primarily driven by annual merit-based pay increases and the recognition of $900 thousand resulting from the Company’s continued efforts to terminate its frozen defined benefit pension plan.

As of March 31, 2019, consolidated assets for the Company totaled $7.95 billion compared to $7.73 billion at December 31, 2018 and $7.57 billion at March 31, 2018. Loans totaled $4.00 billion at quarter end compared with loans of $3.98 billion at December 31, 2018, and $3.75 billion at March 31, 2018. Deposits totaled $6.35 billion at March 31, 2019, compared to $6.18 billion at December 31, 2018, and $6.19 billion at March 31, 2018. Shareholders’ equity rose to $1.11 billion as of March 31, 2019, compared with $1.05 billion at December 31, 2018, and $969.81 million at March 31, 2018.

“We are pleased to report a good first quarter for 2019 with solid earnings performance, as well as growth in loans and deposits,” said F. Scott Dueser, Chairman, President and CEO. “We continue to work diligently to reduce expenses to improve our bottom line while looking for acquisition opportunities to better utilize our strong capital position and increase our return to our shareholders.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares, Inc. is a financial holding company that through its subsidiary, First Financial Bank, N.A., operates multiple banking regions with 73 locations in Texas, 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, Spring, 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 eight 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  
     2019     2018  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

ASSETS

           

Cash and due from banks

    $ 176,278     $ 207,835     $ 164,998     $ 178,217     $ 130,979  

Interest-bearing deposits in banks

      197,758       40,812       34,511       99,499       67,060  

Interest-bearing time deposits in banks

      1,458       1,458       1,458       1,458       1,458  

Fed funds sold

      12,825       —         —         8,450       —    

Investment securities

      3,212,812       3,158,777       3,144,367       3,197,567       3,276,193  

Loans

      4,003,606       3,975,308       3,885,536       3,855,769       3,747,081  

Allowance for loan losses

      (51,585 )      (51,202 )      (50,871 )      (49,951 )      (49,499 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loans

      3,952,021       3,924,106       3,834,665       3,805,818       3,697,582  

Premises and equipment

      135,321       133,421       130,815       130,366       126,446  

Goodwill

      171,565       171,565       171,565       171,565       171,565  

Other intangible assets

      2,850       3,118       3,342       3,620       4,004  

Other assets

      83,007       90,762       85,510       88,910       92,162  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 7,945,895     $ 7,731,854     $ 7,571,231     $ 7,685,470     $ 7,567,449  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

LIABILITIES AND SHAREHOLDERS' EQUITY

           

Noninterest-bearing deposits

    $ 2,165,745     $ 2,116,107     $ 2,146,984     $ 2,105,953     $ 2,111,116  

Interest-bearing deposits

      4,184,996       4,064,282       3,998,298       4,104,654       4,079,647  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total deposits

      6,350,741       6,180,389       6,145,282       6,210,607       6,190,763  

Borrowings

      382,711       468,706       380,760       456,935       372,155  

Other liabilities

      104,921       29,464       49,450       32,300       34,717  

Shareholders' equity

      1,107,522       1,053,295       995,739       985,628       969,814  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total liabilities and shareholders' equity

    $ 7,945,895     $ 7,731,854     $ 7,571,231     $ 7,685,470     $ 7,567,449  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     Quarter Ended  
     2019     2018  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

INCOME STATEMENTS

           

Interest income

    $ 76,901     $ 76,481     $ 74,049     $ 72,078     $ 69,082  

Interest expense

      7,387       6,207       4,623       4,467       3,633  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      69,514       70,274       69,426       67,611       65,449  

Provision for loan losses

      965       1,800       1,450       1,105       1,310  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      68,549       68,474       67,976       66,506       64,139  

Noninterest income

      24,437       24,797       27,055       25,488       24,423  

Noninterest expense

      47,367       48,235       47,506       47,144       47,798  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income before income taxes

      45,619       45,036       47,525       44,850       40,764  

Income tax expense

      7,367       6,599       7,475       7,217       6,245  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 38,252     $ 38,437     $ 40,050     $ 37,633     $ 34,519  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PER COMMON SHARE DATA

           

Net income—basic

    $ 0.56     $ 0.57     $ 0.59     $ 0.56     $ 0.51  

Net income—diluted

      0.56       0.56       0.59       0.55       0.51  

Cash dividends declared

      0.21       0.21       0.21       0.21       0.19  

Book Value

      16.33       15.55       14.71       14.57       14.34  

Market Value

    $ 57.78     $ 57.69     $ 59.10     $ 50.90     $ 46.30  

Shares outstanding—end of period

      67,840,210       67,753,133       67,693,586       67,669,658       67,612,760  

Average outstanding shares—basic

      67,747,127       67,676,204       67,635,058       67,597,275       67,527,010  

Average outstanding shares—diluted

      68,143,431       68,095,612       68,053,724       67,924,168       67,799,545  

PERFORMANCE RATIOS

           

Return on average assets

      2.00 %      2.00 %      2.10 %      1.98 %      1.84 % 

Return on average equity

      14.51       15.18       16.00       15.53       14.74  

Return on average tangible equity

      17.34       18.38       19.42       18.94       17.82  

Net interest margin (tax equivalent)

      4.00       4.02       4.01       3.92       3.88  

Efficiency ratio

      49.46       49.69       48.12       49.42       51.76  

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Quarter Ended  
     2019     2018  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

ALLOWANCE FOR LOAN LOSSES

           

Balance at beginning of period

    $ 51,202     $ 50,871     $ 49,951     $ 49,499     $ 48,156  

Loans charged off

      (1,464 )      (2,081 )      (945 )      (949 )      (471 ) 

Loan recoveries

      882       612       415       296       504  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net recoveries (charge-offs)

      (582 )      (1,469 )      (530 )      (653 )      33  

Provision for loan losses

      965       1,800       1,450       1,105       1,310  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at end of period

    $ 51,585     $ 51,202     $ 50,871     $ 49,951     $ 49,499  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses / period-end loans

      1.29 %      1.29 %      1.31 %      1.30 %      1.32 % 

Allowance for loan losses / nonperforming loans

      177.41       176.22       194.25       182.31       209.80  

Net charge-offs / average loans (annualized)

      0.06       0.15       0.05       0.07       —    

SUMMARY OF LOAN CLASSIFICATION

           

Special Mention

    $ 45,275     $ 50,379     $ 36,450     $ 34,557     $ 40,079  

Substandard

      73,158       75,919       81,073       79,170       83,976  

Doubtful

      —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total classified loans

    $ 118,433     $ 126,298     $ 117,523     $ 113,727     $ 124,055  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NONPERFORMING ASSETS

           

Nonaccrual loans

    $ 28,508     $ 27,534     $ 25,587     $ 26,685     $ 22,752  

Accruing troubled debt restructured loans

      472       513       513       514       514  

Accruing loans 90 days past due

      97       1,008       88       200       327  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming loans

      29,077       29,055       26,188       27,399       23,593  

Foreclosed assets

      647       577       671       705       1,276  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming assets

    $ 29,724     $ 29,632     $ 26,859     $ 28,104     $ 24,869  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

As a % of loans and foreclosed assets

      0.74 %      0.75 %      0.69 %      0.73 %      0.66 % 

As a % of end of period total assets

      0.37       0.38       0.35       0.37       0.33  

OIL AND GAS PORTFOLIO INFORMATION

           

Oil and gas loans

    $ 107,335     $ 113,536     $ 112,039     $ 103,381     $ 86,218  

Oil and gas loans as a % of total loans

      2.68 %      2.86 %      2.88 %      2.68 %      2.30 % 

Classified oil and gas loans

      4,255       3,894       4,861       5,001       10,485  

Nonaccrual oil and gas loans

      669       1,048       1,825       1,629       1,460  

Net charge-offs for oil and gas loans

      —         —         —         —         —    

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

      3.22 %      3.23 %      3.28 %      3.48 %      3.64 % 

CAPITAL RATIOS

           

Common equity Tier 1 capital ratio

      19.86 %      19.47 %      19.19 %      18.68 %      18.43 % 

Tier 1 capital ratio

      19.86       19.47       19.19       18.68       18.43  

Total capital ratio

      21.00       20.61       20.34       19.81       19.58  

Tier 1 leverage

      12.08       11.85       11.57       11.14       10.90  

Equity to assets

      13.94       13.62       13.15       12.82       12.82  

     Quarter Ended  
     2019      2018  
     Mar. 31,      Dec. 31,     Sept. 30,     June 30,      Mar. 31,  

NONINTEREST INCOME

             

Trust fees

    $ 6,979      $ 6,915     $ 7,291     $ 7,070      $ 6,904  

Service charges on deposits

      5,176        5,713       5,690       5,375        4,884  

ATM, interchange and credit card fees

      6,840        6,962       7,533       7,041        6,996  

Real estate mortgage fees

      3,474        3,439       4,834       3,951        2,933  

Net gain on sale of available-for-sale securities

      —          8       58       67        1,221  

Net gain (loss) on sale of foreclosed assets

      69        (85 )      84       19        99  

Net gain (loss) on sale of assets

      —          5       (61 )      —          (91 ) 

Interest on loan recoveries

      338        332       199       289        119  

Other noninterest income

      1,561        1,508       1,427       1,676        1,358  
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Total noninterest income

    $ 24,437      $ 24,797     $ 27,055     $ 25,488      $ 24,423  
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

NONINTEREST EXPENSE

             

Salaries and employee benefits, excluding profit sharing

    $ 25,033      $ 23,908     $ 24,693     $ 24,545      $ 24,994  

Loss from partial settlement of pension plan

      900        1,546       —         —          —    

Profit sharing expense

      1,491        1,839       1,684       2,317        1,209  

Net occupancy expense

      2,763        2,583       2,900       2,806        2,883  

Equipment expense

      3,127        3,403       3,482       3,440        3,516  

FDIC insurance premiums

      538        565       570       632        566  

ATM, interchange and credit card expenses

      2,383        2,589       2,344       2,205        2,143  

Legal, tax and professional fees

      2,154        2,609       2,417       2,308        2,807  

Audit fees

      417        291       382       439        411  

Printing, stationery and supplies

      366        513       387       612        486  

Amortization of intangible assets

      269        223       279       384        387  

Advertising and public relations

      1,648        1,805       1,709       1,576        1,575  

Operational and other losses

      266        337       981       305        566  

Software amortization and expense

      923        755       540       479        524  

Other noninterest expense

      5,089        5,269       5,138       5,096        5,731  
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Total noninterest expense

    $ 47,367      $ 48,235     $ 47,506     $ 47,144      $ 47,798  
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

TAX EQUIVALENT YIELD ADJUSTMENT

    $ 1,819      $ 1,996     $ 2,242     $ 2,289      $ 2,467  
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Three Months Ended
Mar. 31, 2019		            Three Months Ended
Dec. 31, 2018		  
     Average
Balance		      Tax
Equivalent
Interest		      Yield /
Rate		               Average
Balance		      Tax
Equivalent
Interest		      Yield /
Rate		  

Interest-earning assets:

                    

Fed funds sold

    $ 4,894      $ 34        2.79 %       $ 1,620      $ 10        2.54 % 

Interest-bearing deposits in nonaffiliated banks

      100,258        585        2.36          41,511        240        2.30  

Taxable securities

      1,924,863        13,289        2.76          1,957,638        13,384        2.73  

Tax exempt securities

      1,226,457        11,279        3.68          1,206,728        11,482        3.81  

Loans

      3,973,108        53,534        5.46          3,918,360        53,361        5.40  
  

 

 

     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

  

Total interest-earning assets

      7,229,580      $ 78,721        4.42 %         7,125,857      $ 78,477        4.37 % 

Noninterest-earning assets

      508,368                493,244        
  

 

 

             

 

 

        

Total assets

    $ 7,737,948              $ 7,619,101        
  

 

 

             

 

 

        

Interest-bearing liabilities:

                    

Deposits

    $ 4,144,091      $ 6,662        0.65 %       $ 3,961,582      $ 5,092        0.51 % 

Fed funds purchased and other borrowings

      408,641        726        0.72          484,054        1,115        0.91  
  

 

 

     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

  

Total interest-bearing liabilities

      4,552,732      $ 7,388        0.66 %         4,445,636      $ 6,207        0.55 % 

Noninterest-bearing liabilities

      2,116,080                2,169,069        

Shareholders' equity

      1,069,136                1,004,396        
  

 

 

             

 

 

        

Total liabilities and shareholders' equity

    $ 7,737,948              $ 7,619,101        
  

 

 

     

 

 

          

 

 

     

 

 

     

Net interest income and margin (tax equivalent)

       $ 71,333        4.00 %          $ 72,270        4.02 % 
     

 

 

     

 

 

          

 

 

     

 

 

  
     Three Months Ended
Sept. 30, 2018		            Three Months Ended
June 30, 2018		  
     Average
Balance		      Tax
Equivalent
Interest		      Yield /
Rate		            Average
Balance		      Tax
Equivalent
Interest		      Yield /
Rate		  

Interest-earning assets:

                    

Fed funds sold

    $ 3,377      $ 19        2.29 %       $ 2,228      $ 13        2.32 % 

Interest-bearing deposits in nonaffiliated banks

      88,118        450        2.03          59,373        258        1.74  

Taxable securities

      1,943,125        12,594        2.59          2,007,949        12,719        2.53  

Tax exempt securities

      1,213,212        11,459        3.78          1,281,757        12,001        3.75  

Loans

      3,845,836        51,769        5.34          3,797,341        49,376        5.22  
  

 

 

     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

  

Total interest-earning assets

      7,093,668      $ 76,291        4.27 %         7,148,648      $ 74,367        4.17 % 

Noninterest-earning assets

      490,155                486,837        
  

 

 

             

 

 

        

Total assets

    $ 7,583,823              $ 7,635,485        
  

 

 

             

 

 

        

Interest-bearing liabilities:

                    

Deposits

    $ 4,035,174      $ 4,329        0.43 %       $ 4,076,522      $ 4,005        0.39 % 

Fed funds purchased and other borrowings

      399,026        294        0.29          434,239        462        0.43  
  

 

 

     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

  

Total interest-bearing liabilities

      4,434,200      $ 4,623        0.41 %         4,510,761      $ 4,467        0.40 % 

Noninterest-bearing liabilities

      2,156,258                2,152,451        

Shareholders' equity

      993,365                972,273        
  

 

 

             

 

 

        

Total liabilities and shareholders' equity

    $ 7,583,823              $ 7,635,485        
  

 

 

     

 

 

          

 

 

     

 

 

     

Net interest income and margin (tax equivalent)

       $ 71,668        4.01 %          $ 69,900        3.92 % 
     

 

 

     

 

 

          

 

 

     

 

 

  
     Three Months Ended
Mar. 31, 2018		                             
     Average
Balance		      Tax
Equivalent
Interest		      Yield /
Rate		                             

Interest-earning assets:

                    

Fed funds sold

    $ 6,215      $ 27        1.78 %            

Interest-bearing deposits in nonaffiliated banks

      160,399        613        1.55             

Taxable securities

      1,826,391        11,354        2.49             

Tax exempt securities

      1,352,235        12,559        3.72             

Loans

      3,748,561        46,995        5.08             
  

 

 

     

 

 

     

 

 

             

Total interest-earning assets

      7,093,801      $ 71,548        4.09 %            

Noninterest-earning assets

      497,049                   
  

 

 

                   

Total assets

    $ 7,590,850                   
  

 

 

                   

Interest-bearing liabilities:

                    

Deposits

    $ 4,139,324      $ 3,519        0.34 %            

Fed funds purchased and other borrowings

      357,414        113        0.13             
  

 

 

     

 

 

     

 

 

             

Total interest-bearing liabilities

      4,496,738      $ 3,632        0.33 %            

Noninterest-bearing liabilities

      2,144,065                   

Shareholders' equity

      950,047                   
  

 

 

                   

Total liabilities and shareholders' equity

    $ 7,590,850                   
  

 

 

     

 

 

                

Net interest income and margin (tax equivalent)

       $ 67,916        3.88 %