First Financial Bankshares Announces First Quarter Earnings Results

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April 21, 2016 4:05 PM EDT

ABILENE, Texas, April 21, 2016 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2016 of $25.70 million, up 7.08 percent compared with earnings of $24.00 million in the same quarter last year.  Basic earnings per share were $0.39 for the first quarter of 2016 compared with $0.37 in the same quarter a year ago.

All amounts for the first quarter ended March 31, 2016, include the results of the asset purchase of 4Trust Mortgage, Inc. on May 31, 2015, and the acquisition of First Bank, N.A., Conroe, Texas, on July 31, 2015. As of the acquisition date, First Bank had total gross loans of $252.46 million and total deposits of $356.75 million.

Net interest income for the first quarter of 2016 increased 11.59 percent to $57.02 million compared with $51.10 million in the same quarter of 2015. The net interest margin, on a taxable equivalent basis, was 4.15 percent for the first quarter of 2016 compared to 4.16 percent in the fourth quarter of 2015 and 4.11 percent in the first quarter of 2015. Included in interest income for the first quarter of 2016 was $720 thousand, or four basis points in net interest margin, related to discount accretion from fair value accounting related to the Conroe and Orange acquisitions.  

The provision for loan losses was $2.33 million in the first quarter of 2016 compared with $4.18 million in the fourth quarter of 2015 and $1.29 million in the first quarter of 2015. The continued provision for loan losses in 2016 and 2015 reflects the continued levels of nonperforming and classified assets, gross charge-offs, as well as the economic effects related to the oil and gas industry. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.88 percent at March 31, 2016, compared with 0.89 percent at December 31, 2015, and 0.69 percent at March 31, 2015. Classified loans totaled $142.14 million at March 31, 2016, compared to $149.43 million at December 31, 2015, and $77.75 million at March 31, 2015. Included in recoveries for the quarter ended March 31, 2016, was a $1.2 million recovery of a previously charge-off commercial real estate loan.

At March 31, 2016, loans with oil and gas industry exposure totaled 2.79% of gross loans. These loans comprised $36.40 million of the classified loan totals and $4.92 million of the nonperforming loan totals. In addition, $517 thousand in net charge-offs was related to these oil and gas loans for the quarter ended March 31, 2016. At March 31, 2016, the Company's allowance for loan loss reserve specific to its total oil and gas loan portfolio totaled 7.37% of total oil and gas loans.

Noninterest income increased 24.68 percent in the first quarter of 2016 to $19.82 million compared with $15.90 million in the same quarter a year ago. Trust fees decreased $76 thousand to $4.66 million in the first quarter of 2016 compared with $4.73 million in the same quarter last year due to a $257 thousand decline in Trust oil and gas fee income when compared to the same quarter a year ago. This decline was mostly offset by an increase in the fair value of Trust assets managed to $4.01 billion from $3.85 billion a year ago. Service charges on deposits and ATM, interchange and credit card fees increased 17.12 and 14.31 percent, respectively, to $4.41 million and $5.68 million compared with $3.77 million and $4.97 million, respectively, in the same quarter last year due to the acquisition of First Bank and the continued growth in net new accounts and debit cards. Real estate mortgage fees increased 111.81 percent in the first quarter of 2016 to $3.14 million compared with $1.48 million in the same quarter a year ago, primarily resulting from additional loan origination production from the 4Trust Mortgage, Inc. asset purchase.

Noninterest expense for the first quarter of 2016 totaled $41.08 million compared to $33.94 million in the first quarter of 2015. The Company's efficiency ratio in the first quarter of 2016 was 49.52 percent compared with 47.01 percent in the same quarter last year. The increase in noninterest expense in the first quarter of 2016 was primarily a result of an increase in salary and employee benefit costs driven by the addition of 4Trust Mortgage Inc. and First Bank employees and annual pay increases.

As of March 31, 2016, consolidated assets for the Company totaled $6.53 billion compared to $6.67 billion at December 31, 2015 and $6.03 billion at March 31, 2015. Loans totaled $3.30 billion at quarter end compared with loans of $3.35 billion at December 31, 2015 and $2.94 billion at March 31, 2015. Deposits totaled $5.06 billion at March 31, 2016, compared to $5.19 billion at December 31, 2015 and $4.84 billion at March 31, 2015. The decline in deposits from December 31, 2015 to March 31, 2016 was primarily due to an unusually large increase in correspondent bank balances at December 31, 2015. Shareholders' equity rose to $838.61 million as of March 31, 2016, compared with $804.99 million at December 31, 2015 and $706.25 million at March 31, 2015. 

"We are pleased to report another successful quarter for the Company, especially with continued low interest rates and depressed oil and gas prices," said F. Scott Dueser, Chairman, President and CEO. "Going forward, we will remain diligent in our search for opportunities to maximize our efficiencies while we continue to seek additional acquisition opportunities for our company that will fit our culture and bring additional earnings and increase shareholder value."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that through its subsidiary, First Financial Bank, N.A., operates multiple banking regions with 69 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Conroe, Cut and Shoot, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Magnolia, Mauriceville, Merkel, Midlothian, Mineral Wells, Montgomery, Moran, New Waverly, Newton, Odessa, Orange, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, 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 nine 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

2016

2015

ASSETS

Mar. 31, 

 Dec. 31,  

 Sept. 30,  

 June 30,  

Mar. 31, 

Cash and due from banks

$

139,995

$

179,140

$

133,340

$

149,524

$

142,233

Interest-bearing deposits in banks

22,993

89,936

4,268

18,179

18,275

Interest-bearing time deposits in banks

2,427

3,495

4,491

5,456

9,170

Fed funds sold

2,660

3,810

2,790

5,720

5,460

Investment securities

2,763,185

2,734,177

2,737,639

2,729,408

2,689,640

Loans

3,299,207

3,350,593

3,288,422

2,967,768

2,938,707

Allowance for loan losses

(44,072)

(41,877)

(40,420)

(38,999)

(37,828)

Net loans

3,255,135

3,308,716

3,248,002

2,928,769

2,900,879

Premises and equipment

118,208

115,712

116,803

104,495

104,358

Goodwill

139,971

139,971

139,655

96,632

94,882

Other intangible assets

4,198

4,478

4,641

2,407

2,310

Other assets

76,413

85,635

76,016

74,646

58,165

Total assets

$

6,525,185

$

6,665,070

$

6,467,645

$

6,115,236

$

6,025,372

LIABILITIES AND SHAREHOLDERS'  EQUITY

Noninterest-bearing deposits

$

1,654,271

$

1,745,952

$

1,720,383

$

1,574,745

$

1,600,807

Interest-bearing deposits

3,409,536

3,444,217

3,376,900

3,152,674

3,236,200

Total deposits

5,063,807

5,190,169

5,097,283

4,727,419

4,837,007

Borrowings

525,340

615,675

500,903

621,155

401,898

Other liabilities

97,430

54,240

77,425

65,469

80,219

Shareholders' equity

838,608

804,986

792,034

701,193

706,248

Total liabilities and shareholders' equity

$

6,525,185

$

6,665,070

$

6,467,645

$

6,115,236

$

6,025,372

Quarter Ended

2016

2015

INCOME STATEMENTS

Mar. 31, 

 Dec 31,  

 Sept. 30,  

 June 30,  

Mar. 31, 

Interest income

$

58,335

$

59,047

$

57,163

$

53,344

$

52,069

Interest expense

1,312

1,046

1,065

1,008

970

Net interest income

57,023

58,001

56,098

52,336

51,099

Provision for loan losses

2,328

4,177

2,664

1,554

1,290

Net interest income after provision for loan losses

54,695

53,824

53,434

50,782

49,809

Noninterest income

19,821

19,280

20,446

17,809

15,897

Noninterest expense

41,081

40,342

39,973

35,204

33,943

Net income before income taxes

33,435

32,762

33,907

33,387

31,763

Income tax expense

7,739

7,570

8,021

8,080

7,766

Net income

$

25,696

$

25,192

$

25,886

$

25,307

$

23,997

PER COMMON SHARE DATA 

Net income - basic

$

0.39

$

0.38

$

0.40

$

0.39

$

0.37

Net income - diluted

0.39

0.38

0.40

0.39

0.37

Cash dividends declared

0.16

0.16

0.16

0.16

0.14

Book Value

12.70

12.20

12.01

10.93

11.01

Market Value

$

29.58

$

30.17

$

31.78

$

34.64

$

27.64

Shares outstanding - end of period

66,043,442

65,990,234

65,942,155

64,156,302

64,142,812

Average outstanding shares - basic

65,974,559

65,940,127

65,335,457

64,148,356

64,122,965

Average outstanding shares - diluted

66,118,998

66,105,098

65,501,697

64,354,720

64,298,896

PERFORMANCE RATIOS

Return on average assets

1.58

%

1.53

%

1.61

%

1.67

%

1.64

%

Return on average equity

12.55

12.54

13.63

14.38

14.00

Net interest margin (tax equivalent)

4.15

4.16

4.13

4.07

4.11

Efficiency ratio

49.52

48.38

48.44

46.46

47.01

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2016

2015

ALLOWANCE FOR LOAN LOSSES

Mar. 31, 

Dec. 31, 

 Sept. 30,  

June 30, 

Mar. 31, 

Balance at beginning of period

$

41,877

$

40,420

$

38,999

$

37,828

$

36,824

Loans charged off

(1,782)

(3,110)

(1,477)

(943)

(509)

Loan recoveries

1,649

390

234

560

223

Net recoveries (charge-offs)

(133)

(2,720)

(1,243)

(383)

(286)

Provision for loan losses

2,328

4,177

2,664

1,554

1,290

Balance at end of period

$

44,072

$

41,877

$

40,420

$

38,999

$

37,828

Allowance for loan losses / period-end loans

1.34

%

1.25

%

1.23

%

1.31

%

1.29

%

Allowance for loan losses / nonperforming loans

156.24

143.70

183.39

228.20

196.04

Net charge-offs / average loans (annualized)

0.02

0.33

0.16

0.05

0.04

SUMMARY OF LOAN CLASSIFICATION

Special Mention

$

31,486

$

40,576

$

43,284

$

47,409

$

30,874

Substandard

110,657

108,813

68,772

48,317

46,775

Doubtful

-

37

62

43

99

Total classified loans

$

142,143

$

149,426

$

112,118

$

95,769

$

77,748

NONPERFORMING ASSETS

Nonaccrual loans

$

27,175

$

28,601

$

21,788

$

16,854

$

18,935

Accruing troubled debt restructured loans

973

199

204

172

177

Accruing loans 90 days past due

59

341

49

64

184

Total nonperforming loans

28,207

29,141

22,041

17,090

19,296

Foreclosed assets

821

627

701

1,045

1,081

Total nonperforming assets

$

29,028

$

29,768

$

22,742

$

18,135

$

20,377

As a % of loans and foreclosed assets

0.88

%

0.89

%

0.69

%

0.61

%

0.69

%

As a % of end of period total assets

0.44

0.45

0.35

0.30

0.34

OIL AND GAS PORTFOLIO INFORMATION

Oil and gas loans

$

92,058

$

96,712

$

92,382

$

82,498

$

95,044

Oil and gas loans as a % of total loans

2.79

%

2.89

%

2.81

%

2.78

%

3.23

%

Classified oil and gas loans

36,402

34,506

30,028

26,016

6,654

Nonaccrual oil and gas loans

4,917

5,404

2,589

481

44

Net charge-offs for oil and gas loans

517

1,370

567

-

10

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

7.37

%

6.35

%

6.48

%

5.63

%

3.40

%

CAPITAL RATIOS

Common equity Tier 1 capital ratio

16.46

%

15.90

%

15.73

%

16.25

%

16.23

%

Tier 1 capital ratio

16.46

15.90

15.73

16.25

16.23

Total capital ratio

17.60

16.97

16.78

17.36

17.35

Tier 1 leverage

10.23

9.96

9.96

9.84

9.85

Equity to assets

12.85

12.08

12.25

11.47

11.72

Quarter Ended

2016

2015

NONINTEREST INCOME

Mar. 31, 

Dec. 31, 

 Sept. 30,  

 June 30,  

Mar. 31, 

Trust fees

$

4,655

$

4,961

$

4,818

$

4,740

$

4,731

Service charges on deposits

4,413

4,730

4,653

4,021

3,768

ATM, interchange and credit card fees

5,680

5,651

5,794

5,445

4,969

Real estate mortgage fees

3,139

3,088

3,742

2,098

1,482

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

2

51

136

239

5

Net gain (loss) on sale of foreclosed assets

76

528

28

(49)

30

Net gain (loss) on sale of assets

513

(809)

(11)

(4)

5

Interest on loan recoveries

633

216

323

403

108

Other noninterest income

710

864

963

916

799

Total noninterest income

$

19,821

$

19,280

$

20,446

$

17,809

$

15,897

NONINTEREST EXPENSE

Salaries and employee benefits, excluding profit sharing

$

21,545

$

20,647

$

20,007

$

17,865

$

17,023

Profit sharing expense

1,045

1,265

1,641

1,308

1,242

Net occupancy expense

2,631

2,674

3,050

2,394

2,197

Equipment expense

3,380

3,218

3,114

2,992

2,899

FDIC insurance premiums

824

837

819

749

748

ATM, interchange and credit card expenses

1,687

1,540

1,509

1,609

1,725

Legal, tax and professional fees

2,209

2,037

1,497

1,701

1,697

Audit fees

449

359

444

372

381

Printing, stationery and supplies

503

617

594

471

596

Amortization of intangible assets

199

199

200

72

90

Advertising and public relations

1,444

1,481

1,564

1,484

1,353

Correspondent bank service charges

247

239

238

225

222

Other noninterest expense

4,918

5,229

5,296

3,962

3,770

Total noninterest expense

$

41,081

$

40,342

$

39,973

$

35,204

$

33,943

TAX EQUIVALENT YIELD ADJUSTMENT

$

6,115

$

6,111

$

5,984

$

5,635

$

5,213

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended

Three Months Ended

Mar. 31, 2016

Dec. 31, 2015

Average

Tax Equivalent

Yield /

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

7,534

$

9

0.50

%

$

5,769

$

4

0.31

%

  Interest-bearing deposits in nonaffiliated banks

40,239

51

0.51

32,937

33

0.40

  Taxable securities

1,323,606

7,262

2.19

1,352,555

7,170

2.12

  Tax exempt securities

1,428,178

16,326

4.57

1,408,410

16,305

4.63

  Loans

3,312,664

40,802

4.95

3,309,685

41,646

4.99

Total interest-earning assets

6,112,221

$

64,450

4.24

%

6,109,356

$

65,158

4.23

%

Noninterest-earning assets

432,862

427,018

Total assets

$

6,545,083

$

6,536,374

Interest-bearing liabilities:

  Deposits

$

3,445,622

$

1,052

0.12

%

$

3,391,514

$

882

0.10

%

  Fed funds purchased and other borrowings

562,569

260

0.19

575,861

164

0.11

Total interest-bearing liabilities

4,008,191

$

1,312

0.13

%

3,967,375

$

1,046

0.10

%

Noninterest-bearing liabilities

1,713,122

1,772,060

Shareholders' equity

823,770

796,939

Total liabilities and shareholders' equity

$

6,545,083

$

6,536,374

Net interest income and margin (tax equivalent)

$

63,138

4.15

%

$

64,112

4.16

%

Three Months Ended

Three Months Ended

Sept. 30, 2015

June 30, 2015

Average

Tax Equivalent

Yield /

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

8,334

$

8

0.40

%

$

10,391

$

10

0.37

%

  Interest-bearing deposits in nonaffiliated banks

42,083

33

0.31

34,633

40

0.47

  Taxable securities

1,372,834

7,296

2.13

1,425,744

7,398

2.08

  Tax exempt securities

1,376,119

16,021

4.66

1,294,809

15,108

4.67

  Loans

3,161,229

39,789

4.99

2,954,502

36,423

4.94

Total interest-earning assets

5,960,599

$

63,147

4.20

%

5,720,079

$

58,979

4.14

%

Noninterest-earning assets

402,174

351,223

Total assets

$

6,362,773

$

6,071,302

Interest-bearing liabilities:

  Deposits

$

3,295,411

$

932

0.11

%

$

3,177,999

$

902

0.11

%

  Fed funds purchased and other borrowings

572,431

133

0.09

558,367

106

0.08

Total interest-bearing liabilities

3,867,842

$

1,065

0.11

%

3,736,366

$

1,008

0.11

%

Noninterest-bearing liabilities

1,741,319

1,628,847

Shareholders' equity

753,612

706,089

Total liabilities and shareholders' equity

$

6,362,773

$

6,071,302

Net interest income and margin (tax equivalent)

$

62,082

4.13

%

$

57,971

4.07

%

Three Months Ended

Mar. 31, 2015

Average

Tax Equivalent

Yield /

Balance

Interest

Rate

Interest-earning assets:

  Fed funds sold

$

6,767

$

5

0.27

%

  Interest-bearing deposits in nonaffiliated banks

89,798

75

0.34

  Taxable securities

1,333,073

7,808

2.34

  Tax exempt securities

1,191,772

13,973

4.69

  Loans

2,931,805

35,420

4.90

Total interest-earning assets

5,553,215

$

57,281

4.18

%

Noninterest-earning assets

363,211

Total assets

$

5,916,426

Interest-bearing liabilities:

  Deposits

$

3,221,552

$

927

0.12

%

  Fed funds purchased and other borrowings

388,213

42

0.04

Total interest-bearing liabilities

3,609,765

$

969

0.11

%

Noninterest-bearing liabilities

1,611,430

Shareholders' equity

695,231

Total liabilities and shareholders' equity

$

5,916,426

Net interest income and margin (tax equivalent)

$

56,312

4.11

%

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/first-financial-bankshares-announces-first-quarter-earnings-results-300255559.html

SOURCE First Financial Bankshares, Inc.


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