First Financial Bankshares Announces Third Quarter Earnings Results

Published

ABILENE, Texas, Oct. 17, 2019 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2019 of $43.08 million, up 7.57 percent when compared with earnings of $40.05 million in the same quarter last year. Basic earnings per share were $0.32 for the third quarter of 2019 compared with $0.30 in the same quarter a year ago.

On April 23, 2019, the Company's Board of Directors declared a two-for-one stock split in the form of a 100 percent stock dividend, which was effective June 3, 2019. All share and per share amounts in this earnings release have been restated to reflect this stock split.

Net interest income for the third quarter of 2019 increased 4.63 percent to $72.64 million compared with $69.43 million in the same quarter of 2018. The net interest margin, on a taxable equivalent basis, was 3.94 percent for the third quarter of 2019 compared to 3.98 percent for the second quarter of 2019 and 4.01 percent for the third quarter of 2018. Included in interest income for the third quarter of 2019 was $415 thousand, or two basis points in net interest margin, related to discount accretion from fair value accounting related to the Kingwood and Orange acquisitions. In the second quarter of 2019 and the third quarter of 2018, amounts related to discount accretion from fair value accounting accounted for two and four basis points, respectively, in net interest margin.

The provision for loan losses was $450 thousand in the third quarter of 2019 compared with $600 thousand in the second quarter of 2019 and $1.45 million in the third quarter of 2018. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.66 percent at September 30, 2019, compared with 0.69 percent at both June 30, 2019 and September 30, 2018. Classified loans totaled $119.20 million at September 30, 2019, compared to $126.04 million at June 30, 2019, and $117.52 million at September 30, 2018.

Noninterest income increased 5.97 percent in the third quarter of 2019 to $28.67 million compared with $27.06 million in the same quarter a year ago. Trust fees were $7.05 million in the third quarter of 2019 compared with $7.29 million in the same quarter last year. The fair value of Trust assets managed increased to $6.36 billion from $5.75 billion a year ago; however, the income from the growth in assets was offset by a decrease of $447 thousand in Trust mineral fee and lease bonus income when compared to the same period a year ago primarily due to a decline in oil and gas volumes. ATM, interchange and credit card fees increased 2.59 percent to $7.73 million compared with $7.53 million in the same quarter last year due to continued growth in debit cards. Real estate mortgage fees increased 18.60 percent in the third quarter of 2019 to $5.73 million compared with $4.83 million in the same quarter a year ago due to an increase in the volume of loans originated. Additionally, interest on loan recoveries from previous non-accrual loans increased $376 thousand and the gain from sale of bank assets increased $296 thousand as compared to the same quarter a year ago.

Noninterest expense for the third quarter of 2019 totaled $48.91 million compared to $47.51 million in the third quarter of 2018. The Company's efficiency ratio in the third quarter of 2019 was 47.54 percent compared with 48.12 percent in the same quarter last year. The increase in noninterest expense in the third quarter of 2019 was primarily a result of an increase in salary and employee benefit costs to $28.55 million compared to $26.38 million in the same quarter a year ago, primarily due to merit-based pay increases which was partially offset by a $555 thousand reduction in FDIC insurance premiums resulting from credits from prior premiums paid. Additionally, operational and other losses decreased $474 thousand as compared to the same quarter a year ago.

For the nine months ended September 30, 2019, net income increased 10.00 percent to $123.42 million from $112.20 million a year ago. Basic earnings per share rose to $0.91 from $0.83 in the same period last year. Net interest income increased 5.57 percent to $213.77 million for the nine months ended September 30, 2019, from $202.49 million in the same period a year ago. The provision for loan losses totaled $2.02 million compared with $3.87 million in the same period a year ago. Noninterest income was $81.08 million for the first nine months 2019 compared with $76.97 million in the same period a year ago. Noninterest expense rose to $144.58 million compared with $142.45 million during the same period a year ago.

As of September 30, 2019, consolidated assets for the Company totaled $8.11 billion compared to $7.98 billion at June 30, 2019, and $7.57 billion at September 30, 2018. Loans grew to $4.14 billion at September 30, 2019, compared with loans of $4.06 billion at June 30, 2019 and $3.89 billion at September 30, 2018. Deposits totaled $6.40 billion at September 30, 2019, compared to $6.37 billion at June 30, 2019, and $6.15 billion at September 30, 2018. Shareholders' equity rose to $1.21 billion as of September 30, 2019, compared with $1.16 billion at June 30, 2019, and $995.74 million at September 30, 2018.

On September 19, 2019, the Company announced the pending acquisition of TB&T Bancshares, Inc. and its wholly owned subsidiary, The Bank & Trust of Bryan/College Station, Texas with an expected closing in the first quarter of 2020, subject to regulatory approval. As of June 30, 2019, The Bank & Trust of Bryan/College Station had total assets of $624.51 million, total loans of $445.63 million and total deposits of $538.22 million.

"We are pleased with our recent announcement of our pending acquisition of TB&T and to report another quarter with solid earnings performance, growth in loans and deposits and good credit metrics," said F. Scott Dueser, Chairman, President and CEO. "We continue to work diligently to grow loans and deposits, reduce expenses to improve our bottom line while continuing to look for quality acquisition opportunities like our most recent announcement to better utilize our strong capital position and increase returns to our shareholders," added Dueser.

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
ASSETS Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
Cash and due from banks $ 198,855 $ 178,345 $ 176,278 $ 207,835 $ 164,998
Interest-bearing deposits in banks 31,410 128,652 197,758 40,812 34,511
Interest-bearing time deposits in banks - 960 1,458 1,458 1,458
Fed funds sold - 700 12,825 - -
Investment securities 3,397,156 3,259,492 3,212,812 3,158,777 3,144,367
Loans 4,140,815 4,063,257 4,003,606 3,975,308 3,885,536
Allowance for loan losses (51,889) (51,820) (51,585) (51,202) (50,871)
Net loans 4,088,926 4,011,437 3,952,021 3,924,106 3,834,665
Premises and equipment 132,367 134,322 135,321 133,421 130,815
Goodwill 171,565 171,565 171,565 171,565 171,565
Other intangible assets 2,340 2,586 2,850 3,118 3,342
Other assets 91,220 91,234 83,007 90,762 85,510
Total assets $ 8,113,839 $ 7,979,293 $ 7,945,895 $ 7,731,854 $ 7,571,231
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 2,210,997 $ 2,167,552 $ 2,165,745 $ 2,116,107 $ 2,146,984
Interest-bearing deposits 4,186,686 4,202,214 4,184,996 4,064,282 3,998,298
Total deposits 6,397,683 6,369,766 6,350,741 6,180,389 6,145,282
Borrowings 400,155 362,005 382,711 468,706 380,760
Other liabilities 110,903 82,774 104,921 29,464 49,450
Shareholders' equity 1,205,098 1,164,748 1,107,522 1,053,295 995,739
Total liabilities and shareholders' equity $ 8,113,839 $ 7,979,293 $ 7,945,895 $ 7,731,854 $ 7,571,231
Quarter Ended
2019 2018
INCOME STATEMENTS Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
Interest income $ 80,591 $ 79,576 $ 76,901 $ 76,481 $ 74,049
Interest expense 7,953 7,961 7,387 6,207 4,623
Net interest income 72,638 71,615 69,514 70,274 69,426
Provision for loan losses 450 600 965 1,800 1,450
Net interest income after provision for loan losses 72,188 71,015 68,549 68,474 67,976
Noninterest income 28,669 27,976 24,437 24,797 27,055
Noninterest expense 48,910 48,304 47,367 48,235 47,506
Net income before income taxes 51,947 50,687 45,619 45,036 47,525
Income tax expense 8,867 8,594 7,367 6,599 7,475
Net income $ 43,080 $ 42,093 $ 38,252 $ 38,437 $ 40,050
PER COMMON SHARE DATA
Net income - basic $ 0.32 $ 0.31 $ 0.28 $ 0.28 $ 0.30
Net income - diluted 0.32 0.31 0.28 0.28 0.29
Cash dividends declared 0.12 0.12 0.11 0.11 0.11
Book Value 8.87 8.58 8.16 7.77 7.35
Market Value $ 33.33 $ 30.79 $ 28.89 $ 28.85 $ 29.55
Shares outstanding - end of period 135,822,456 135,809,224 135,680,420 135,506,266 135,387,172
Average outstanding shares - basic 135,693,901 135,650,599 135,494,254 135,352,408 135,270,116
Average outstanding shares - diluted 136,369,328 136,218,235 136,286,862 136,191,224 136,107,448
PERFORMANCE RATIOS
Return on average assets 2.15 % 2.14 % 2.00 % 2.00 % 2.10 %
Return on average equity 14.46 15.04 14.51 15.18 16.00
Return on average tangible equity 16.96 17.81 17.34 18.38 19.42
Net interest margin (tax equivalent) 3.94 3.98 4.00 4.02 4.01
Efficiency ratio 47.54 47.71 49.46 49.69 48.12
Nine Months Ended
Sept. 30,
INCOME STATEMENTS 2019 2018
Interest income $ 237,069 $ 215,209
Interest expense 23,301 12,723
Net interest income 213,768 202,486
Provision for loan losses 2,015 3,865
Net interest income after provision for loan losses 211,753 198,621
Noninterest income 81,081 76,966
Noninterest expense 144,583 142,448
Net income before income taxes 148,251 133,139
Income tax expense 24,827 20,937
Net income $ 123,424 $ 112,202
PER COMMON SHARE DATA
Net income - basic $ 0.91 $ 0.83
Net income - diluted 0.91 0.83
Cash dividends declared 0.35 0.31
Book Value 8.87 7.35
Market Value $ 33.33 $ 29.55
Shares outstanding - end of period 135,822,456 135,387,172
Average outstanding shares - basic 135,613,646 135,173,686
Average outstanding shares - diluted 136,274,342 135,896,840
PERFORMANCE RATIOS
Return on average assets 2.10 % 1.97 %
Return on average equity 14.67 15.43
Return on average tangible equity 17.36 18.74
Net interest margin (tax equivalent) 3.97 3.94
Efficiency ratio 48.21 49.73
FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)
Quarter Ended
2019 2018
ALLOWANCE FOR LOAN LOSSES Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
Balance at beginning of period $ 51,820 $ 51,585 $ 51,202 $ 50,871 $ 49,951
Loans charged off (767) (1,061) (1,464) (2,081) (945)
Loan recoveries 386 696 882 612 415
Net recoveries (charge-offs) (381) (365) (582) (1,469) (530)
Provision for loan losses 450 600 965 1,800 1,450
Balance at end of period $ 51,889 $ 51,820 $ 51,585 $ 51,202 $ 50,871
Allowance for loan losses / period-end loans 1.25 % 1.28 % 1.29 % 1.29 % 1.31 %
Allowance for loan losses / nonperforming loans 200.75 190.66 177.41 176.22 194.25
Net charge-offs / average loans (annualized) 0.04 0.04 0.06 0.15 0.05
SUMMARY OF LOAN CLASSIFICATION
Special Mention $ 46,300 $ 51,490 $ 45,275 $ 50,379 $ 36,450
Substandard 72,904 74,550 73,158 75,919 81,073
Doubtful - - - - -
Total classified loans $ 119,204 $ 126,040 $ 118,433 $ 126,298 $ 117,523
NONPERFORMING ASSETS
Nonaccrual loans $ 25,717 $ 26,408 $ 28,508 $ 27,534 $ 25,587
Accruing troubled debt restructured loans 27 471 472 513 513
Accruing loans 90 days past due 104 300 97 1,008 88
Total nonperforming loans 25,848 27,179 29,077 29,055 26,188
Foreclosed assets 1,364 681 647 577 671
Total nonperforming assets $ 27,212 $ 27,860 $ 29,724 $ 29,632 $ 26,859
As a % of loans and foreclosed assets 0.66 % 0.69 % 0.74 % 0.75 % 0.69 %
As a % of end of period total assets 0.34 0.35 0.37 0.38 0.35
OIL AND GAS PORTFOLIO INFORMATION
Oil and gas loans $ 122,908 $ 107,097 $ 107,335 $ 113,536 $ 112,039
Oil and gas loans as a % of total loans 2.97 % 2.64 % 2.68 % 2.86 % 2.88 %
Classified oil and gas loans 7,953 3,438 4,255 3,894 4,861
Nonaccrual oil and gas loans 519 621 669 1,048 1,825
Net charge-offs for oil and gas loans - - - - -
Allowance for oil and gas loans as a % of oil and gas loans 2.87 % 2.95 % 3.22 % 3.23 % 3.28 %
CAPITAL RATIOS
Common equity Tier 1 capital ratio 20.05 % 20.04 % 19.86 % 19.47 % 19.19 %
Tier 1 capital ratio 20.05 20.04 19.86 19.47 19.19
Total capital ratio 21.14 21.16 21.00 20.61 20.34
Tier 1 leverage 12.58 12.29 12.08 11.85 11.57
Tangible Common Equity Ratio 12.94 12.31 11.83 11.14 11.05
Equity/Assets 14.85 14.60 13.94 13.62 13.15
Quarter Ended
2019 2018
NONINTEREST INCOME Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
Trust fees $ 7,051 $ 7,027 $ 6,979 $ 6,915 $ 7,291
Service charges on deposits 5,629 5,374 5,176 5,713 5,690
ATM, interchange and credit card fees 7,728 7,352 6,840 6,962 7,533
Real estate mortgage fees 5,733 4,721 3,474 3,439 4,834
Net gain on sale of available-for-sale securities 52 676 - 8 58
Net gain (loss) on sale of foreclosed assets 71 53 69 (85) 84
Net gain (loss) on sale of assets 235 6 - 5 (61)
Interest on loan recoveries 575 903 338 332 199
Other noninterest income 1,595 1,864 1,561 1,508 1,427
Total noninterest income $ 28,669 $ 27,976 $ 24,437 $ 24,797 $ 27,055
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing $ 27,030 $ 25,510 $ 25,033 $ 23,908 $ 24,693
Loss from partial settlement of pension plan - - 900 1,546 -
Profit sharing expense 1,520 1,884 1,491 1,839 1,684
Net occupancy expense 2,830 2,779 2,763 2,583 2,900
Equipment expense 2,225 2,331 2,453 2,570 2,629
FDIC insurance premiums 15 538 538 565 570
ATM, interchange and credit card expenses 2,627 2,427 2,383 2,589 2,344
Legal, tax and professional fees 2,274 2,302 2,154 2,609 2,417
Audit fees 341 455 417 291 382
Printing, stationery and supplies 480 502 366 513 387
Amortization of intangible assets 246 264 269 223 279
Advertising and public relations 1,745 1,630 1,648 1,805 1,709
Operational and other losses 507 480 266 337 981
Software amortization and expense 1,767 1,783 1,597 1,588 1,393
Other noninterest expense 5,303 5,419 5,089 5,269 5,138
Total noninterest expense $ 48,910 $ 48,304 $ 47,367 $ 48,235 $ 47,506
TAX EQUIVALENT YIELD ADJUSTMENT $ 1,575 $ 1,664 $ 1,819 $ 1,996 $ 2,242
Nine Months Ended
Sept. 30,
NONINTEREST INCOME 2019 2018
Trust fees $ 21,057 $ 21,265
Service charges on deposits 16,179 15,950
ATM, interchange and credit card fees 21,920 21,570
Real estate mortgage fees 13,928 11,718
Net gain (loss) on sale of available-for-sale securities 728 1,346
Net gain (loss) on sale of foreclosed assets 193 201
Net gain (loss) on sale of assets 241 (152)
Interest on loan recoveries 1,815 607
Other noninterest income 5,020 4,461
Total noninterest income $ 81,081 $ 76,966
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing $ 77,573 $ 74,232
Loss from partial settlement of pension plan 900 -
Profit sharing expense 4,895 5,210
Net occupancy expense 8,372 8,589
Equipment expense 7,009 7,548
FDIC insurance premiums 1,091 1,768
ATM, interchange and credit card expenses 7,437 6,692
Legal, tax and professional fees 6,729 7,532
Audit fees 1,212 1,234
Printing, stationery and supplies 1,348 1,485
Amortization of intangible assets 778 1,049
Advertising and public relations 5,022 4,860
Operational and other losses 1,253 1,852
Software amortization and expense 5,147 4,433
Other noninterest expense 15,817 15,965
Total noninterest expense $ 144,583 $ 142,448
TAX EQUIVALENT YIELD ADJUSTMENT $ 5,058 $ 6,997

FIRST FINANCIAL BANKSHARES, INC.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except share and per share data) FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
As of (In thousands)
2019 2018
ASSETS Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, Three Months Ended Three Months Ended
Cash and due from banks $ 198,855 $ 178,345 $ 176,278 $ 207,835 $ 164,998 Sept. 30, 2019 June 30, 2019
Interest-bearing deposits in banks 31,410 128,652 197,758 40,812 34,511 Average Tax Equivalent Yield / Average Tax Equivalent Yield /
Interest-bearing time deposits in banks - 960 1,458 1,458 1,458 Balance Interest Rate Balance Interest Rate
Fed funds sold - 700 12,825 - - Interest-earning assets:
Investment securities 3,397,156 3,259,492 3,212,812 3,158,777 3,144,367 Fed funds sold $ 3,006 $ 19 2.52 % $ 5,436 $ 39 2.88 %
Loans 4,140,815 4,063,257 4,003,606 3,975,308 3,885,536 Interest-bearing deposits in nonaffiliated banks 61,465 363 2.34 107,381 628 2.35
Allowance for loan losses (51,889) (51,820) (51,585) (51,202) (50,871) Taxable securities 2,183,930 14,292 2.62 2,063,497 13,925 2.70
Net loans 4,088,926 4,011,437 3,952,021 3,924,106 3,834,665 Tax exempt securities 1,132,279 10,075 3.56 1,169,889 10,615 3.63
Premises and equipment 132,367 134,322 135,321 133,421 130,815 Loans 4,094,235 57,417 5.56 4,043,055 56,033 5.56
Goodwill 171,565 171,565 171,565 171,565 171,565 Total interest-earning assets 7,474,915 $ 82,166 4.36 % 7,389,258 $ 81,240 4.41 %
Other intangible assets 2,340 2,586 2,850 3,118 3,342 Noninterest-earning assets 489,446 487,931
Other assets 91,220 91,234 83,007 90,762 85,510 Total assets $ 7,964,361 $ 7,877,189
Total assets $ 8,113,839 $ 7,979,293 $ 7,945,895 $ 7,731,854 $ 7,571,231
Interest-bearing liabilities:
LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 4,156,850 $ 7,123 0.68 % $ 4,196,123 $ 7,286 0.70 %
Noninterest-bearing deposits $ 2,210,997 $ 2,167,552 $ 2,165,745 $ 2,116,107 $ 2,146,984 Fed funds purchased and other borrowings 388,235 830 0.85 378,389 675 0.72
Interest-bearing deposits 4,186,686 4,202,214 4,184,996 4,064,282 3,998,298 Total interest-bearing liabilities 4,545,085 $ 7,953 0.69 % 4,574,512 $ 7,961 0.70 %
Total deposits 6,397,683 6,369,766 6,350,741 6,180,389 6,145,282 Noninterest-bearing liabilities 2,237,462 2,180,361
Borrowings 400,155 362,005 382,711 468,706 380,760 Shareholders' equity 1,181,814 1,122,316
Other liabilities 110,903 82,774 104,921 29,464 49,450 Total liabilities and shareholders' equity $ 7,964,361 $ 7,877,189
Shareholders' equity 1,205,098 1,164,748 1,107,522 1,053,295 995,739
Total liabilities and shareholders' equity $ 8,113,839 $ 7,979,293 $ 7,945,895 $ 7,731,854 $ 7,571,231 Net interest income and margin (tax equivalent) $ 74,213 3.94 % $ 73,279 3.98 %
Quarter Ended Three Months Ended Three Months Ended
2019 2018 Mar. 31, 2019 Dec. 31, 2018
INCOME STATEMENTS Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, Average Tax Equivalent Yield / Average Tax Equivalent Yield /
Interest income $ 80,591 $ 79,576 $ 76,901 $ 76,481 $ 74,049 Balance Interest Rate Balance Interest Rate
Interest expense 7,953 7,961 7,387 6,207 4,623 Interest-earning assets:
Net interest income 72,638 71,615 69,514 70,274 69,426 Fed funds sold $ 4,894 $ 34 2.79 % $ 1,620 $ 10 2.54 %
Provision for loan losses 450 600 965 1,800 1,450 Interest-bearing deposits in nonaffiliated banks 100,258 585 2.36 41,511 240 2.30
Net interest income after provision for loan losses 72,188 71,015 68,549 68,474 67,976 Taxable securities 1,924,863 13,289 2.76 1,957,638 13,384 2.73
Noninterest income 28,669 27,976 24,437 24,797 27,055 Tax exempt securities 1,226,457 11,279 3.68 1,206,728 11,482 3.81
Noninterest expense 48,910 48,304 47,367 48,235 47,506 Loans 3,973,108 53,534 5.46 3,918,360 53,361 5.40
Net income before income taxes 51,947 50,687 45,619 45,036 47,525 Total interest-earning assets 7,229,580 $ 78,721 4.42 % 7,125,857 $ 78,477 4.37 %
Income tax expense 8,867 8,594 7,367 6,599 7,475 Noninterest-earning assets 508,368 493,244
Net income $ 43,080 $ 42,093 $ 38,252 $ 38,437 $ 40,050 Total assets $ 7,737,948 $ 7,619,101
PER COMMON SHARE DATA Interest-bearing liabilities:
Net income - basic $ 0.32 $ 0.31 $ 0.28 $ 0.28 $ 0.30 Deposits $ 4,144,091 $ 6,662 0.65 % $ 3,961,582 $ 5,092 0.51 %
Net income - diluted 0.32 0.31 0.28 0.28 0.29 Fed funds purchased and other borrowings 408,641 726 0.72 484,054 1,115 0.91
Cash dividends declared 0.12 0.12 0.11 0.11 0.11 Total interest-bearing liabilities 4,552,732 $ 7,388 0.66 % 4,445,636 $ 6,207 0.55 %
Book Value 8.87 8.58 8.16 7.77 7.35 Noninterest-bearing liabilities 2,116,080 2,169,069
Market Value $ 33.33 $ 30.79 $ 28.89 $ 28.85 $ 29.55 Shareholders' equity 1,069,136 1,004,396
Shares outstanding - end of period 135,822,456 135,809,224 135,680,420 135,506,266 135,387,172 Total liabilities and shareholders' equity $ 7,737,948 $ 7,619,101
Average outstanding shares - basic 135,693,901 135,650,599 135,494,254 135,352,408 135,270,116
Average outstanding shares - diluted 136,369,328 136,218,235 136,286,862 136,191,224 136,107,448 Net interest income and margin (tax equivalent) $ 71,333 4.00 % $ 72,270 4.02 %
PERFORMANCE RATIOS Three Months Ended
Return on average assets 2.15 % 2.14 % 2.00 % 2.00 % 2.10 % Sept. 30, 2018
Return on average equity 14.46 15.04 14.51 15.18 16.00 Average Tax Equivalent Yield /
Return on average tangible equity 16.96 17.81 17.34 18.38 19.42 Balance Interest Rate
Net interest margin (tax equivalent) 3.94 3.98 4.00 4.02 4.01 Interest-earning assets:
Efficiency ratio 47.54 47.71 49.46 49.69 48.12 Fed funds sold $ 3,377 $ 19 2.29 %
Interest-bearing deposits in nonaffiliated banks 88,118 450 2.03
Taxable securities 1,943,125 12,594 2.59
Nine Months Ended Tax exempt securities 1,213,212 11,459 3.78
Sept. 30, Loans 3,845,836 51,769 5.34
INCOME STATEMENTS 2019 2018 Total interest-earning assets 7,093,668 $ 76,291 4.27 %
Interest income $ 237,069 $ 215,209 Noninterest-earning assets 490,155
Interest expense 23,301 12,723 Total assets $ 7,583,823
Net interest income 213,768 202,486
Provision for loan losses 2,015 3,865 Interest-bearing liabilities:
Net interest income after provision for loan losses 211,753 198,621 Deposits $ 4,035,174 $ 4,329 0.43 %
Noninterest income 81,081 76,966 Fed funds purchased and other borrowings 399,026 294 0.29
Noninterest expense 144,583 142,448 Total interest-bearing liabilities 4,434,200 $ 4,623 0.41 %
Net income before income taxes 148,251 133,139 Noninterest-bearing liabilities 2,156,258
Income tax expense 24,827 20,937 Shareholders' equity 993,365
Net income $ 123,424 $ 112,202 Total liabilities and shareholders' equity $ 7,583,823
PER COMMON SHARE DATA Net interest income and margin (tax equivalent) $ 71,668 4.01 %
Net income - basic $ 0.91 $ 0.83
Net income - diluted 0.91 0.83 Nine Months Ended Nine Months Ended
Cash dividends declared 0.35 0.31 Sept. 30, 2019 Sept. 30, 2018
Book Value 8.87 7.35 Average Tax Equivalent Yield / Average Tax Equivalent Yield /
Market Value $ 33.33 $ 29.55 Balance Interest Rate Balance Interest Rate
Shares outstanding - end of period 135,822,456 135,387,172 Interest-earning assets:
Average outstanding shares - basic 135,613,646 135,173,686 Fed funds sold $ 4,438 $ 92 2.76 % $ 3,929 $ 60 2.03 %
Average outstanding shares - diluted 136,274,342 135,896,840 Interest-bearing deposits in nonaffiliated banks 89,559 1,575 2.35 102,365 1,321 1.73
Taxable securities 2,058,380 41,505 2.69 1,926,249 36,666 2.54
PERFORMANCE RATIOS Tax exempt securities 1,175,863 31,968 3.62 1,281,892 36,019 3.75
Return on average assets 2.10 % 1.97 % Loans 4,037,243 166,987 5.53 3,797,602 148,140 5.22
Return on average equity 14.67 15.43 Total interest-earning assets 7,365,483 $ 242,127 4.40 % 7,112,037 $ 222,206 4.18 %
Return on average tangible equity 17.36 18.74 Noninterest-earning assets 495,179 489,625
Net interest margin (tax equivalent) 3.97 3.94 Total assets $ 7,860,662 $ 7,601,662
Efficiency ratio 48.21 49.73
Interest-bearing liabilities:
Deposits $ 4,165,735 $ 21,071 0.68 % $ 4,083,292 $ 11,854 0.39 %
FIRST FINANCIAL BANKSHARES, INC. Fed funds purchased and other short term borrowings 391,680 2,230 0.76 397,045 869 0.29
SELECTED FINANCIAL DATA (UNAUDITED) Total interest-bearing liabilities 4,557,415 $ 23,301 0.68 % 4,480,337 $ 12,723 0.38 %
(In thousands) Noninterest-bearing liabilities 2,178,412 2,149,271
Shareholders' equity 1,124,835 972,054
Quarter Ended Total liabilities and shareholders' equity $ 7,860,662 $ 7,601,662
2019 2018
ALLOWANCE FOR LOAN LOSSES Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30, Net interest income and margin (tax equivalent) $ 218,826 3.97 % $ 209,483 3.94 %
Balance at beginning of period $ 51,820 $ 51,585 $ 51,202 $ 50,871 $ 49,951
Loans charged off (767) (1,061) (1,464) (2,081) (945)
Loan recoveries 386 696 882 612 415
Net recoveries (charge-offs) (381) (365) (582) (1,469) (530)
Provision for loan losses 450 600 965 1,800 1,450
Balance at end of period $ 51,889 $ 51,820 $ 51,585 $ 51,202 $ 50,871
Allowance for loan losses / period-end loans 1.25 % 1.28 % 1.29 % 1.29 % 1.31 %
Allowance for loan losses / nonperforming loans 200.75 190.66 177.41 176.22 194.25
Net charge-offs / average loans (annualized) 0.04 0.04 0.06 0.15 0.05
SUMMARY OF LOAN CLASSIFICATION
Special Mention $ 46,300 $ 51,490 $ 45,275 $ 50,379 $ 36,450
Substandard 72,904 74,550 73,158 75,919 81,073
Doubtful - - - - -
Total classified loans $ 119,204 $ 126,040 $ 118,433 $ 126,298 $ 117,523
NONPERFORMING ASSETS
Nonaccrual loans $ 25,717 $ 26,408 $ 28,508 $ 27,534 $ 25,587
Accruing troubled debt restructured loans 27 471 472 513 513
Accruing loans 90 days past due 104 300 97 1,008 88
Total nonperforming loans 25,848 27,179 29,077 29,055 26,188
Foreclosed assets 1,364 681 647 577 671
Total nonperforming assets $ 27,212 $ 27,860 $ 29,724 $ 29,632 $ 26,859
As a % of loans and foreclosed assets 0.66 % 0.69 % 0.74 % 0.75 % 0.69 %
As a % of end of period total assets 0.34 0.35 0.37 0.38 0.35
OIL AND GAS PORTFOLIO INFORMATION
Oil and gas loans $ 122,908 $ 107,097 $ 107,335 $ 113,536 $ 112,039
Oil and gas loans as a % of total loans 2.97 % 2.64 % 2.68 % 2.86 % 2.88 %
Classified oil and gas loans 7,953 3,438 4,255 3,894 4,861
Nonaccrual oil and gas loans 519 621 669 1,048 1,825
Net charge-offs for oil and gas loans - - - - -
Allowance for oil and gas loans as a % of oil and gas loans 2.87 % 2.95 % 3.22 % 3.23 % 3.28 %
CAPITAL RATIOS
Common equity Tier 1 capital ratio 20.05 % 20.04 % 19.86 % 19.47 % 19.19 %
Tier 1 capital ratio 20.05 20.04 19.86 19.47 19.19
Total capital ratio 21.14 21.16 21.00 20.61 20.34
Tier 1 leverage 12.58 12.29 12.08 11.85 11.57
Tangible Common Equity Ratio 12.94 12.31 11.83 11.14 11.05
Equity/Assets 14.85 14.60 13.94 13.62 13.15
Quarter Ended
2019 2018
NONINTEREST INCOME Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
Trust fees $ 7,051 $ 7,027 $ 6,979 $ 6,915 $ 7,291
Service charges on deposits 5,629 5,374 5,176 5,713 5,690
ATM, interchange and credit card fees 7,728 7,352 6,840 6,962 7,533
Real estate mortgage fees 5,733 4,721 3,474 3,439 4,834
Net gain on sale of available-for-sale securities 52 676 - 8 58
Net gain (loss) on sale of foreclosed assets 71 53 69 (85) 84
Net gain (loss) on sale of assets 235 6 - 5 (61)
Interest on loan recoveries 575 903 338 332 199
Other noninterest income 1,595 1,864 1,561 1,508 1,427
Total noninterest income $ 28,669 $ 27,976 $ 24,437 $ 24,797 $ 27,055
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing $ 27,030 $ 25,510 $ 25,033 $ 23,908 $ 24,693
Loss from partial settlement of pension plan - - 900 1,546 -
Profit sharing expense 1,520 1,884 1,491 1,839 1,684
Net occupancy expense 2,830 2,779 2,763 2,583 2,900
Equipment expense 2,225 2,331 2,453 2,570 2,629
FDIC insurance premiums 15 538 538 565 570
ATM, interchange and credit card expenses 2,627 2,427 2,383 2,589 2,344
Legal, tax and professional fees 2,274 2,302 2,154 2,609 2,417
Audit fees 341 455 417 291 382
Printing, stationery and supplies 480 502 366 513 387
Amortization of intangible assets 246 264 269 223 279
Advertising and public relations 1,745 1,630 1,648 1,805 1,709
Operational and other losses 507 480 266 337 981
Software amortization and expense 1,767 1,783 1,597 1,588 1,393
Other noninterest expense 5,303 5,419 5,089 5,269 5,138
Total noninterest expense $ 48,910 $ 48,304 $ 47,367 $ 48,235 $ 47,506
TAX EQUIVALENT YIELD ADJUSTMENT $ 1,575 $ 1,664 $ 1,819 $ 1,996 $ 2,242
Nine Months Ended
Sept. 30,
NONINTEREST INCOME 2019 2018
Trust fees $ 21,057 $ 21,265
Service charges on deposits 16,179 15,950
ATM, interchange and credit card fees 21,920 21,570
Real estate mortgage fees 13,928 11,718
Net gain (loss) on sale of available-for-sale securities 728 1,346
Net gain (loss) on sale of foreclosed assets 193 201
Net gain (loss) on sale of assets 241 (152)
Interest on loan recoveries 1,815 607
Other noninterest income 5,020 4,461
Total noninterest income $ 81,081 $ 76,966
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing $ 77,573 $ 74,232
Loss from partial settlement of pension plan 900 -
Profit sharing expense 4,895 5,210
Net occupancy expense 8,372 8,589
Equipment expense 7,009 7,548
FDIC insurance premiums 1,091 1,768
ATM, interchange and credit card expenses 7,437 6,692
Legal, tax and professional fees 6,729 7,532
Audit fees 1,212 1,234
Printing, stationery and supplies 1,348 1,485
Amortization of intangible assets 778 1,049
Advertising and public relations 5,022 4,860
Operational and other losses 1,253 1,852
Software amortization and expense 5,147 4,433
Other noninterest expense 15,817 15,965
Total noninterest expense $ 144,583 $ 142,448
TAX EQUIVALENT YIELD ADJUSTMENT $ 5,058 $ 6,997

 

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SOURCE First Financial Bankshares, Inc.

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