First Financial Bankshares Announces Third Quarter Earnings Results

ABILENE, Texas, Oct. 17, 2013 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2013 of $19.56 million compared with earnings of $19.80 million in the same quarter last year.  Basic earnings per share were $0.61 for the third quarter of 2013 compared with $0.63 in the same quarter a year ago. Included in noninterest expense in the third quarter of 2013 were technology contract termination and conversion costs totaling $3.40 million, before income tax, related to the Company's recent acquisition of Orange Savings Bank, SSB.

All amounts for the third quarter and first nine months 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 the acquisition date, Orange had total loans of $293.29 million and total deposits of $385.95 million.

Net interest income increased 16.29 percent to $45.49 million for the third quarter of 2013 compared with $39.12 million in the same quarter of 2012. The net interest margin, on a taxable equivalent basis, was 4.25 percent compared with 4.26 percent in the same quarter last year and 4.18 percent in the second quarter of this year. 

The provision for loan losses was $1.35 million in the third quarter of 2013 compared with $787 thousand in the same quarter last year and $832 thousand in the second quarter of this year, primarily due to continued loan growth. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.09 percent at September 30, 2013, compared with 1.20 percent at June 30, 2013, and 1.53 percent at September 30, 2012.  Classified loans totaled $81.67 million at September 30, 2013, compared to $87.83 million at June 30, 2013, and $76.48 million at September 30, 2012. The increase in dollar amount of classified loans from prior year amounts was primarily a result of the Orange Savings Bank, SSB acquisition.

Noninterest income increased 10.17 percent in the third quarter of 2013 to $17.08 million compared with $15.50 million in the same quarter a year ago. Trust fees increased to $4.14 million in the third quarter of 2013 compared with $3.72 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.20 billion from $2.75 billion a year ago. ATM, interchange and credit card fees increased 16.91 percent to $4.40 million compared with $3.77 million in the same quarter last year.  Service charges on deposit accounts increased to $4.80 million during the third quarter of 2013 compared with $4.34 million in the same quarter a year ago. Real estate mortgage income increased to $2.01 million compared with $1.50 million in the same quarter a year ago. The net loss on securities sold during the third quarter of 2013 totaled $108 thousand compared to a gain of $1.48 million in the same quarter of 2012.

Noninterest expense increased in the third quarter of 2013 to $35.53 million from $27.20 million in the same quarter last year. The Company's efficiency ratio in the third quarter of 2013 was 53.10 percent compared with 46.61 percent in the same quarter last year. Included in noninterest expense in the third quarter of 2013 were technology contract termination and conversion costs totaling $3.40 million related to the Company's recent acquisition of Orange Savings Bank, SSB (discussed above). Also included in noninterest expense in the third quarter of 2013 were salary and employee benefit costs of $17.50 million compared to $14.85 million in the same quarter a year ago, primarily from the increase in personnel from the Orange acquisition. Legal, tax and professional fees increased to $1.58 million compared to $1.02 million in the same quarter a year ago.

For the first nine months of 2013, net income increased 3.08 percent to $57.63 million from $55.91 million for the same period a year ago. Basic earnings per share rose to $1.82 in the first nine months of 2013 from $1.78 in the same period last year. Net interest income increased 8.33 percent to $125.59 million in the first nine months of 2013 from $115.93 million in the same period a year ago. The provision for loan losses totaled $2.58 million compared with $2.84 million in the first nine months of the previous year. Noninterest income was $46.26 million in the first nine months of 2013 compared with $42.26 million for the same period a year ago. Noninterest expense rose to $92.92 million in the first nine months of 2013 compared with $80.42 million last year.

As of September 30, 2013, consolidated assets for the Company totaled $5.08 billion compared with $4.31 billion a year ago. Loans totaled $2.61 billion at quarter end, after approximately $50.00 million of short-term participations paid off, compared with loans of $2.00 billion a year ago. Total deposits were $4.00 billion as of September 30, 2013, versus $3.44 billion a year earlier.  Shareholders' equity rose to $568.24 million as of September 30, 2013, compared with $549.91 million the prior year. 

"We were very pleased with the earnings performance this quarter, especially in light of the $3.40 million expense tied to the purchase accounting to terminate the Orange technology contract and conversion costs. We continue to see solid growth in loans and deposits throughout the Company, and the recent acquisition of Orange has contributed nicely to the bottom line on a monthly basis," said F. Scott Dueser, Chairman, President and CEO. "We are having numerous conversations and are continuing to pursue additional acquisition opportunities to maximize our shareholders' return."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 60 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, 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 seven 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.