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8-K - 8-K - FIRST FINANCIAL BANKSHARES INCd908562d8k.htm

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 16, 2015 – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2015 of $24.00 million, up 7.44 percent when compared with earnings of $22.34 million in the same quarter last year. Basic earnings per share were $0.37 for the first quarter of 2015 compared with $0.35 in the same quarter a year ago.

Net interest income for the first quarter of 2015 increased 8.32 percent to $51.10 million compared with $47.17 million in the same period of 2014. The net interest margin, on a taxable equivalent basis, was 4.11 percent compared to 4.08 percent in the fourth quarter of 2014 and 4.32 percent in the first quarter of 2014. Included in interest income for the first quarter of 2015 was $489 thousand, or three basis points in net interest margin, related to discount accretion from fair value accounting related to the Orange and Huntsville acquisitions.

The provision for loan losses was $1.29 million in the first quarter of 2015 compared with $755 thousand in the fourth quarter of 2014 and $1.69 million in the first quarter of 2014. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.69 percent at March 31, 2015, compared with 0.74 percent at December 31, 2014, and 1.02 percent at March 31, 2014. Classified loans totaled $77.75 million at March 31, 2015, compared to $72.98 million at December 31, 2014, and $81.56 million at March 31, 2014.

Noninterest income decreased 3.10 percent in the first quarter of 2015 to $15.90 million compared with $16.41 million in the same quarter a year ago. Included in noninterest income in the first quarter of 2014 was a $605 thousand gain from the settlement of a bank owned life insurance contract and a gain on sale of foreclosed assets of $452 thousand compared to only $30 thousand in the first quarter of 2015. Trust fees increased to $4.73 million in the first quarter of 2015 compared with $4.58 million in the same quarter last year, due to continued growth in the fair value of Trust assets managed to $3.85 billion from $3.47 billion a year ago. This growth offset a $241 thousand decline in Trust oil and gas fee income in the first quarter of 2015 compared to the same quarter a year ago. ATM, interchange and credit card fees increased 11.84 percent to $4.97 million compared with $4.44 million in the same quarter last year due to continued growth in net new accounts and debit cards. Real estate mortgage fees increased 39.36 percent in the first quarter of 2015 to $1.43 million compared with $1.02 million in the same quarter a year ago.

Noninterest expense for the first quarter of 2015 totaled $33.94 million compared to $32.45 million in the first quarter of 2014. The Company’s efficiency ratio in the first quarter of 2015 was 47.01 percent compared with 47.57 percent in the same quarter last year. The increase in noninterest expense in the first quarter of 2015 was primarily a result of an increase in salary and employee benefit costs to $18.27 million compared to $17.41 million in the same year ago, primarily driven by the addition of employees to staff new branches, compliance-related areas and annual pay increases.

As of March 31, 2015, consolidated assets for the Company totaled $6.03 billion compared with $5.28 billion a year ago. Loans totaled $2.94 billion at quarter end compared with loans of $2.70 billion a year


ago. Total deposits grew 14.23 percent to $4.84 billion at March 31, 2015, compared to $4.23 billion a year ago. Shareholders’ equity rose to $706.25 million as of March 31, 2015, compared with $616.57 million in the prior year.

“We are pleased to report another successful quarter for our company and continue to work to grow and improve our efficiencies,” said F. Scott Dueser, Chairman, President and CEO. “We are very excited about the additions of our newest proposed acquisition, First Bank, N.A., Conroe, Texas, and the asset purchase agreement of 4Trust Mortgage, Inc. We believe these additions to the First Financial family fit well into our footprint and continues our strategy to buy well-run banks and companies in high growth areas, which bring good earnings opportunities. In light of the current depressed oil and gas prices, we continue to monitor our direct exposure to the oil and gas industry, which has remained at approximately 3%, consistent with the 2014 year-end balances.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 62 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Mauriceville, Merkel, Midlothian, Mineral Wells, Moran, New Waverly, 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 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  
     2015     2014  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

ASSETS

          

Cash and due from banks

   $ 142,233      $ 190,387      $ 149,957      $ 166,237      $ 160,469   

Interest-bearing deposits in banks

     18,275        54,324        83,994        68,331        3,772   

Interest-bearing time deposits in banks

     9,170        17,002        19,234        24,188        30,026   

Fed funds sold

     5,460        8,760        4,785        3,110        3,620   

Investment securities

     2,689,640        2,416,297        2,254,316        2,174,396        2,163,599   

Loans

     2,938,707        2,937,991        2,839,696        2,786,644        2,698,717   

Allowance for loan losses

     (37,828     (36,824     (36,388     (35,892     (34,693
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

  2,900,879      2,901,167      2,803,308      2,750,752      2,664,024   

Premises and equipment

  104,358      103,000      101,437      96,619      95,406   

Goodwill

  94,882      94,882      94,882      94,882      94,882   

Other intangible assets

  2,310      2,477      2,547      2,547      2,600   

Other assets

  58,165      59,906      61,351      65,294      62,629   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

$ 6,025,372    $ 5,848,202    $ 5,575,811    $ 5,446,356    $ 5,281,027   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Noninterest-bearing deposits

$ 1,600,807    $ 1,570,330    $ 1,505,847    $ 1,445,947    $ 1,389,331   

Interest-bearing deposits

  3,236,200      3,179,925      2,958,517      2,872,511      2,844,950   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

  4,837,007      4,750,255      4,464,364      4,318,458      4,234,281   

Short-term borrowings

  401,898      367,110      341,909      434,583      383,220   

Other liabilities

  80,219      49,300      110,773      53,279      46,960   

Shareholders’ equity

  706,248      681,537      658,765      640,036      616,566   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

$ 6,025,372    $ 5,848,202    $ 5,575,811    $ 5,446,356    $ 5,281,027   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Quarter Ended  
     2015     2014  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

INCOME STATEMENTS

          

Interest income

   $ 52,069      $ 51,121      $ 49,955      $ 49,254      $ 48,209   

Interest expense

     970        1,039        1,069        1,037        1,036   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

  51,099      50,082      48,886      48,217      47,173   

Provision for loan losses

  1,290      755      896      1,124      1,690   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

  49,809      49,327      47,990      47,093      45,483   

Noninterest income

  15,897      17,023      17,324      15,872      16,405   

Noninterest expense

  33,943      36,435      34,040      35,002      32,448   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income before income taxes

  31,763      29,915      31,274      27,963      29,440   

Income tax expense

  7,766      7,328      7,843      6,758      7,104   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$ 23,997    $ 22,587    $ 23,431    $ 21,205    $ 22,336   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PER COMMON SHARE DATA

Net income - basic

$ 0.37    $ 0.35    $ 0.37    $ 0.33    $ 0.35   

Net income - diluted

  0.37      0.35      0.36      0.33      0.35   

Cash dividends declared

  0.14      0.14      0.14      0.14      0.13   

Book Value

  11.01      10.63      10.28      9.99      9.63   

Market Value

$ 27.64    $ 29.88    $ 27.79    $ 31.37    $ 30.90   

Shares outstanding - end of period

  64,142,812      64,089,921      64,065,828      64,053,010      64,039,234   

Average outstanding shares - basic

  64,122,965      64,075,334      64,059,675      64,045,282      64,010,076   

Average outstanding shares - diluted

  64,298,896      64,316,815      64,304,985      64,301,306      64,212,018   

PERFORMANCE RATIOS

Return on average assets

  1.64   1.57   1.71   1.59   1.74

Return on average equity

  14.00      13.34      14.27      13.46      15.02   

Net interest margin (tax equivalent)

  4.11      4.08      4.18      4.24      4.32   

Efficiency ratio

  47.01      50.58      47.93      50.84      47.57   


FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Quarter Ended  
     2015     2014  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

ALLOWANCE FOR LOAN LOSSES

          

Balance at beginning of period

   $ 36,824      $ 36,388      $ 35,892      $ 34,693      $ 33,900   

Loans charged off

     (509     (670     (614     (302     (1,297

Loan recoveries

     223        351        214        377        400   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net recoveries (charge-offs)

  (286   (319   (400   75      (897

Provision for loan losses

  1,290      755      896      1,124      1,690   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

$ 37,828    $ 36,824    $ 36,388    $ 35,892    $ 34,693   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses / period-end loans

  1.29   1.25   1.28   1.29   1.29

Allowance for loan losses / nonperforming loans

  196.04      178.06      162.77      151.52      140.23   

Net charge-offs / average loans (annualized)

  0.04      0.04      0.06      (0.01   0.14   

NONPERFORMING ASSETS

Nonaccrual loans

$ 18,935    $ 20,195    $ 22,093    $ 23,565    $ 24,710   

Accruing troubled debt restructured loans

  177      226      —        —        —     

Accruing loans 90 days past due

  184      260      263      123      30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

  19,296      20,681      22,356      23,688      24,740   

Foreclosed assets

  1,081      1,035      1,273      2,342      2,813   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

$ 20,377    $ 21,716    $ 23,629    $ 26,030    $ 27,553   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

As a % of loans and foreclosed assets

  0.69   0.74   0.83   0.93   1.02

As a % of end of period total assets

  0.34      0.37      0.42      0.48      0.52   

CAPITAL RATIOS

Tier 1 risk-based

  16.23   16.05   16.07   16.15   16.24

Total risk-based

  17.35      17.16      17.20      17.30      17.39   

Tier 1 leverage

  9.85      9.89      10.10      9.99      9.95   

Equity to assets

  11.72      11.65      11.81      11.75      11.68   
     Quarter Ended  
     2015     2014  
     Mar. 31,     Dec. 31,     Sept. 30,     June 30,     Mar. 31,  

NONINTEREST INCOME

          

Trust fees

   $ 4,731      $ 4,869      $ 4,772      $ 4,549      $ 4,576   

Service charges on deposits

     3,768        4,287        4,402        4,174        4,047   

ATM, interchange and credit card fees

     4,969        5,137        5,093        4,754        4,443   

Real estate mortgage fees

     1,427        1,465        1,813        1,337        1,024   

Net gain (loss) on sale of available-for-sale securities

     5        —          1        (1     (4

Net gain (loss) on sale of foreclosed assets

     30        100        305        47        452   

Net gain (loss) on sale of assets

     5        (6     (31     44        3   

Other noninterest income

     962        1,171        969        968        1,864   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest income

$ 15,897    $ 17,023    $ 17,324    $ 15,872    $ 16,405   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$ 17,023    $ 16,302    $ 16,354    $ 16,279    $ 16,197   

Profit sharing expense

  1,242      1,516      1,596      995      1,217   

Loss from partial settlement of pension plan

  —        2,909      —        —        —     

Net occupancy expense

  2,197      2,296      2,297      2,273      2,234   

Equipment expense

  2,899      2,695      2,758      2,665      2,622   

FDIC insurance premiums

  748      689      693      684      659   

ATM, interchange and credit card expenses

  1,725      1,875      1,819      1,696      1,480   

Legal, tax and professional fees

  1,697      1,363      1,463      1,208      1,273   

Audit fees

  381      279      403      367      369   

Printing, stationery and supplies

  596      676      632      554      775   

Amortization of intangible assets

  90      64      62      74      75   

Advertising and public relations

  1,353      1,515      1,591      1,465      1,375   

Correspondent bank service charges

  222      222      222      215      228   

Other noninterest expense

  3,770      4,034      4,150      6,527      3,944   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest expense

$ 33,943    $ 36,435    $ 34,040    $ 35,002    $ 32,448   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TAX EQUIVALENT YIELD ADJUSTMENT

$ 5,213    $ 4,934    $ 4,814    $ 4,753    $ 4,629   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

 

     Three Months Ended
Mar. 31, 2015
    Three Months Ended
Dec. 31, 2014
 
     Average
Balance
     Tax Equivalent
Interest
     Yield /
Rate
    Average
Balance
     Tax Equivalent
Interest
     Yield /
Rate
 

Interest-earning assets:

                

Fed funds sold

   $ 6,767       $ 5         0.27   $ 5,975       $ 4         0.30

Interest-bearing deposits in nonaffiliated banks

     89,798         75         0.34        118,244         110         0.37   

Taxable securities

     1,333,073         7,808         2.34        1,246,632         7,370         2.36   

Tax exempt securities

     1,191,772         13,973         4.69        1,091,723         13,078         4.79   

Loans

     2,931,805         35,420         4.90        2,889,951         35,492         4.87   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-earning assets

  5,553,215    $ 57,281      4.18   5,352,525    $ 56,054      4.15

Noninterest-earning assets

  363,211      358,395   
  

 

 

         

 

 

       

Total assets

$ 5,916,426    $ 5,710,920   
  

 

 

         

 

 

       

Interest-bearing liabilities:

Deposits

$ 3,221,552    $ 927      0.12 $ 3,043,612    $ 989      0.13

Fed funds purchased and other short term borrowings

  388,213      42      0.04      373,785      49      0.05   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

  3,609,765    $ 969      0.11   3,417,397    $ 1,038      0.12

Noninterest-bearing liabilities

  1,611,430      1,621,819   

Shareholders’ equity

  695,231      671,704   
  

 

 

         

 

 

       

Total liabilities and shareholders’ equity

$ 5,916,426    $ 5,710,920   
  

 

 

    

 

 

      

 

 

    

 

 

    

Net interest income and margin (tax equivalent)

$ 56,312      4.11 $ 55,016      4.08
     

 

 

    

 

 

      

 

 

    

 

 

 
     Three Months Ended
Sept. 30, 2014
    Three Months Ended
June 30, 2014
 
     Average
Balance
     Tax Equivalent
Interest
     Yield /
Rate
    Average
Balance
     Tax Equivalent
Interest
     Yield /
Rate
 

Interest-earning assets:

                

Fed funds sold

   $ 10,619       $ 11         0.40   $ 11,310       $ 12         0.41

Interest-bearing deposits in nonaffiliated banks

     50,213         69         0.55        48,974         78         0.64   

Taxable securities

     1,166,248         6,856         2.35        1,159,430         7,091         2.45   

Tax exempt securities

     1,057,715         12,763         4.83        1,037,608         12,599         4.86   

Loans

     2,814,083         35,070         4.94        2,748,023         34,227         5.00   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-earning assets

  5,098,878    $ 54,769      4.26   5,005,345    $ 54,007      4.33

Noninterest-earning assets

  348,369      335,651   
  

 

 

         

 

 

       

Total assets

$ 5,447,247    $ 5,340,996   
  

 

 

         

 

 

       

Interest-bearing liabilities:

Deposits

$ 2,892,065    $ 999      0.14 $ 2,867,740    $ 955      0.13

Fed funds purchased and other short term borrowings

  384,768      70      0.07      406,913      82      0.08   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

  3,276,833    $ 1,069      0.13   3,274,653    $ 1,037      0.13

Noninterest-bearing liabilities

  1,518,907      1,434,674   

Shareholders’ equity

  651,507      631,669   
  

 

 

         

 

 

       

Total liabilities and shareholders’ equity

$ 5,447,247    $ 5,340,996   
  

 

 

    

 

 

      

 

 

    

 

 

    

Net interest income and margin (tax equivalent)

$ 53,700      4.18 $ 52,970      4.24
     

 

 

    

 

 

      

 

 

    

 

 

 

 

     Three Months Ended
Mar. 31, 2014
 
     Average
Balance
     Tax Equivalent
Interest
     Yield /
Rate
 

Interest-earning assets:

        

Fed funds sold

   $ 5,718       $ 5         0.35

Interest-bearing deposits in nonaffiliated banks

     48,708         82         0.68   

Taxable securities

     1,121,296         7,084         2.53   

Tax exempt securities

     992,947         12,218         4.92   

Loans

     2,689,474         33,450         5.04   
  

 

 

    

 

 

    

 

 

 

Total interest-earning assets

  4,858,143    $ 52,839      4.41

Noninterest-earning assets

  351,309   
  

 

 

       

Total assets

$ 5,209,452   
  

 

 

       

Interest-bearing liabilities:

Deposits

$ 2,817,181    $ 941      0.14

Fed funds purchased and other short term borrowings

  426,204      96      0.09   
  

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

  3,243,385    $ 1,037      0.13

Noninterest-bearing liabilities

  1,362,852   

Shareholders’ equity

  603,215   
  

 

 

       

Total liabilities and shareholders’ equity

$ 5,209,452   
  

 

 

    

 

 

    

Net interest income and margin (tax equivalent)

$ 51,802      4.32