First Financial Bankshares, Inc. FFIN

NAS: FFIN | ISIN: US32020R1095   16/07/2024
34,16 USD (+6,19%)
(+6,19%)   16/07/2024

First Financial Bankshares Announces First Quarter 2023 Earnings

ABILENE, Texas, April 20, 2023 /PRNewswire/ -- First Financial Bankshares, Inc. (the "Company," "we," "us" or "our") (NASDAQ: FFIN) today reported earnings for the first quarter of 2023 of $52.57 million compared to earnings of $55.97 million for the same quarter a year ago. Basic and diluted earnings per share were $0.37 for the first quarter of 2023 compared with $0.39 for the same quarter a year ago.

As further described below, the results this quarter compared to the same quarter a year ago included (i) a decrease in debit card fees of $3.99 million, (ii) a decrease in mortgage revenues of $3.36 million and (iii) an increase in FDIC assessment fees of $785 thousand. Offsetting these items was (i) a decrease in the provision for credit losses of $2.00 million and (ii) a decrease in salary and employee benefits expenses of $2.68 million.

"We are pleased with our results that were highlighted by strong organic loan growth with only a small contraction in deposits during the quarter.  In light of the historical increase in interest rates by the Federal Reserve, we continue to focus on loan and deposit pricing that aligns with our competitive environment. While funding costs have increased, we continue to have opportunities to reinvest bond cash flows into our higher yielding loan portfolio," said F. Scott Dueser, Chairman, President and CEO of First Financial Bankshares, Inc. "Additionally, the financial strength of our Company is reflected in our strong regulatory capital ratios, diversified deposit base and access to multiple liquidity sources. We are steadfast in our commitment to remaining safe, sound and secure. We appreciate the continued support of our customers, shareholders and associates," added Mr. Dueser.

Net interest income for the first quarter of 2023 was $96.29 million compared to $95.44 million for the first quarter of 2022. The net interest margin, on a taxable equivalent basis, was 3.34 percent for the first quarter of 2023 compared to 3.22 percent in the first quarter of 2022. Average interest-earning assets were $12.07 billion for the first quarter of 2023 compared to $12.50 billion a year ago. 

The Company recorded a provision for credit losses of $2.78 million for the first quarter of 2023 compared to a provision for credit losses of $4.78 million for the first quarter of 2022. At March 31, 2023, the allowance for credit losses totaled $80.82 million, or 1.23 percent of loans held-for-investment ("loans" hereafter), compared to $66.91 million, or 1.20 percent of loans, at March 31, 2022. Additionally, the reserve for unfunded commitments totaled $10.40 million at March 31, 2023 compared to $7.47 million at March 31, 2022.

Net recoveries totaled $277 thousand in the first quarter 2023 compared to net charge-offs of $299 thousand for the first quarter of 2022. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.37 percent at March 31, 2023, compared with 0.52 percent at March 31, 2022.  Classified loans totaled $157.06 million at March 31, 2023, compared to $152.16 million at March 31, 2022.

Noninterest income for the first quarter of 2023 was $28.01 million compared to $34.88 million for the first quarter of 2022, due to the following:

  • Service charges on deposits increased to $6.04 million for the first quarter of 2023 compared with $5.71 million for the first quarter of 2022, driven by the growth of over 4,300 net new accounts opened during the first quarter of 2023.
  • Debit card fees decreased by $3.99 million for the first quarter of 2023 compared to the same quarter a year ago. The decrease was due the impact of becoming subject to regulations that limit debit card interchange revenue ("Durbin Amendment") which became effective for the Company as of July 1, 2022.
  • Mortgage income declined to $2.97 million for the first quarter of 2023 compared to $6.33 million for the first quarter of 2022 due to lower overall origination volumes and margins primarily because of the increase in mortgage interest rates.
  • Gains on sales of assets, foreclosed assets and securities were $976 thousand during the first quarter of 2023 compared to $1.11 million for the first quarter of 2022.

Noninterest expense for the first quarter of 2023 totaled $57.26 million compared to $59.23 million for the first quarter of 2022, as a result of the following:

  • Salary, commissions, and employee benefit costs decreased to $31.46 million for the first quarter of 2023, compared to $34.14 million in the first quarter of 2022 primarily resulting from a decrease of $1.57 million in profit sharing expense and $781 thousand in mortgage incentives.
  • Noninterest expenses, excluding salary related costs, increased $708 thousand for the first quarter of 2023 compared to the same period in 2022 largely due to an increase of $785 thousand in FDIC insurance fees.

The Company's efficiency ratio was 44.93 percent for the first quarter of 2023 compared to 44.16 percent for the first quarter of 2022.  The increase was driven by the decrease in non-interest income from the prior year.

As of March 31, 2023, consolidated total assets were $13.01 billion compared to $13.31 billion at March 31, 2022. Loans totaled $6.58 billion at March 31, 2023, compared with loans of $5.57 billion at March 31, 2022. During the first quarter of 2023, loans grew $134.35 million, or 8.46 percent annualized, when compared to December 31, 2022 balances. Deposits totaled $10.94 billion at March 31, 2023, compared to $11.00 billion at March 31, 2022.  

During the first quarter of 2023, the Company sold $135.86 million of securities classified as available-for-sale with an average book yield of 2.92 percent. The proceeds from the sales of these securities were largely used to fund organic loan growth during the quarter. As of March 31, 2023, cash flows from maturities in the security portfolio of $599.43 million are projected over the next twelve months.

Shareholders' equity was $1.37 billion as of March 31, 2023, compared to $1.27 billion and $1.49 billion at December 31, 2022, and March 31, 2022, respectively, primarily as a result of changes in Other Comprehensive Income ("OCI") due to interest rate changes over the past year. The unrealized loss on the securities portfolio, net of applicable tax, totaled $458.25 million at March 31, 2023, compared to an unrealized loss of $535.23 million and $209.58 million at December 31, 2022 and March 31, 2022, respectively.

About First Financial Bankshares, Inc.

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 79 locations in Texas, including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Bryan, Burleson, College Station, Cisco, Cleburne, Clyde, Conroe, Cut and Shoot, Decatur, Eastland, El Campo, Fort Worth, Fulshear, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Kingwood, Lumberton, Magnolia, Mauriceville, Merkel, Midlothian, Mineral Wells, Montgomery, Moran, New Waverly, Newton, Odessa, Orange, Palacios, 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 ten 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, please visit our website at https://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," "project," 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; economic impact of oil and gas prices and the pandemic, 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 and Filings" on the Company's Website 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



2023



2022


ASSETS


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Cash and due from banks

$

224,875


$

293,286


$

227,298


$

242,665


$

203,187


Interest-bearing demand deposits in banks


221,336



37,392



138,484



222,899



394,566


Investment securities


5,298,557



5,474,359



5,745,443



6,215,036



6,502,495


Loans, held-for-investment, excluding PPP Loans


6,576,060



6,441,699



6,255,286



5,876,281



5,550,430


PPP loans


155



169



202



2,301



15,739


Total loans, held-for-investment


6,576,215



6,441,868



6,255,488



5,878,582



5,566,169


Allowance for credit losses


(80,818)



(75,834)



(74,108)



(71,932)



(66,913)


Net loans, held-for-investment 


6,495,397



6,366,034



6,181,380



5,806,650



5,499,256


Loans, held-for-sale


11,996



11,965



18,815



26,445



27,670


Premises and equipment, net


153,718



152,973



152,646



149,280



150,168


Goodwill


313,481



313,481



313,481



313,481



313,481


Other intangible assets


1,825



2,053



2,352



2,658



2,978


Other assets


286,801



322,523



330,445



281,098



220,399


Total assets

$

13,007,986


$

12,974,066


$

13,110,344


$

13,260,212


$

13,314,200


















LIABILITIES AND SHAREHOLDERS'  EQUITY
















Noninterest-bearing deposits

$

3,890,991


$

4,061,788


$

4,200,792


$

4,104,034


$

3,978,724


Interest-bearing deposits


7,045,427



6,943,719



6,941,326



7,018,949



7,021,101


Total deposits


10,936,418



11,005,507



11,142,118



11,122,983



10,999,825


Borrowings


632,927



642,507



774,581



768,364



758,595


Other liabilities


65,788



60,315



61,030



39,847



67,031


Shareholders' equity


1,372,853



1,265,737



1,132,615



1,329,018



1,488,749


Total liabilities and shareholders' equity

$

13,007,986


$

12,974,066


$

13,110,344


$

13,260,212


$

13,314,200



















Quarter Ended



2023



2022


INCOME STATEMENTS


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Interest income

$

121,508


$

121,137


$

112,728


$

101,981


$

97,009


Interest expense


25,222



17,100



9,572



3,199



1,570


Net interest income


96,286



104,037



103,156



98,782



95,439


Provision for credit losses


2,781



4,075



3,221



5,350



4,782


Net interest income after provision for credit losses


93,505



99,962



99,935



93,432



90,657


Noninterest income


28,007



28,524



30,943



37,317



34,881


Noninterest expense


57,256



57,778



59,442



58,333



59,225


Net income before income taxes


64,256



70,708



71,436



72,416



66,313


Income tax expense


11,688



12,040



12,095



11,922



10,341


Net income

$

52,568


$

58,668


$

59,341


$

60,494


$

55,972


















PER COMMON SHARE DATA 
















Net income - basic

$

0.37


$

0.41


$

0.42


$

0.42


$

0.39


Net income - diluted


0.37



0.41



0.41



0.42



0.39


Cash dividends declared


0.17



0.17



0.17



0.17



0.15


Book value


9.62



8.87



7.94



9.32



10.43


Tangible book value


7.41



6.66



5.73



7.10



8.21


Market value


31.90



34.40



41.83



39.27



44.12


Shares outstanding - end of period


142,703,531



142,657,871



142,628,163



142,586,601



142,704,495


Average outstanding shares - basic


142,665,646



142,619,632



142,524,500



142,682,251



142,558,743


Average outstanding shares - diluted


143,066,011



143,071,538



143,126,088



143,238,669



143,302,063


































PERFORMANCE RATIOS
















Return on average assets


1.65

%


1.76

%


1.76

%


1.82

%


1.71

%

Return on average equity


16.32



19.87



17.31



17.26



13.53


Return on average tangible equity


21.51



27.20



22.55



22.27



16.68


Net interest margin (tax equivalent)*


3.34



3.47



3.38



3.30



3.22


Efficiency ratio*


44.93



42.39



43.10



41.61



44.16


*Calculations have been adjusted to remove effect of TEFRA disallowance

 

















FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)


















Quarter Ended



2023



2022


ALLOWANCE FOR LOAN LOSSES


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Balance at beginning of period

$

75,834


$

74,108


$

71,932


$

66,913


$

63,465


Loans charged-off


(288)



(1,225)



(293)



(275)



(659)


Loan recoveries


565



320



1,409



1,191



360


Net recoveries (charge-offs)


277



(905)



1,116



916



(299)


Provision for loan losses


4,707



2,631



1,060



4,103



3,747


Balance at end of period

$

80,818


$

75,834


$

74,108


$

71,932


$

66,913


















ALLOWANCE FOR UNFUNDED COMMITMENTS
















Balance at beginning of period

$

12,323


$

10,879


$

8,718


$

7,471


$

6,436


Provision for unfunded commitments


(1,926)



1,444



2,161



1,247



1,035


Balance at end of period

$

10,397


$

12,323


$

10,879


$

8,718


$

7,471


















Allowance for loan losses /
















period-end loans held-for-investment


1.23

%


1.18

%


1.18

%


1.22

%


1.20

%

Allowance for loan losses /
















nonperforming loans


334.06



311.75



301.02



281.90



232.71


Net charge-offs (recoveries) / average total loans
















(annualized)


(0.02)



0.06



(0.07)



(0.06)



0.02



































Quarter Ended



2023



2022


COMPOSITION OF LOANS HELD-FOR-INVESTMENT


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Commercial:
















C&I

$

954,531


$

917,148


$

871,133


$

837,627


$

822,310


PPP


155



169



202



2,301



15,739


Municipal


221,379



221,090



214,852



200,577



191,799


Total Commercial


1,176,065



1,138,407



1,086,187



1,040,505



1,029,848


Agricultural


77,017



76,947



76,937



90,420



82,883


Real Estate:
















Construction & Development


921,190



959,426



938,051



928,644



806,211


Farm


307,706



306,322



268,139



250,028



225,942


Non-Owner Occupied CRE


737,117



732,089



717,738



636,432



636,160


Owner Occupied CRE


1,043,018



954,400



945,665



909,899



881,181


Residential


1,628,841



1,575,758



1,536,180



1,412,125



1,352,162


Total Real Estate


4,637,872



4,527,995



4,405,773



4,137,128



3,901,656


Consumer:
















Auto


537,410



550,635



538,798



468,147



419,818


Non-Auto


147,851



147,884



147,793



142,382



131,964


Total Consumer


685,261



698,519



686,591



610,529



551,782


















Total loans held-for-investment

$

6,576,215


$

6,441,868


$

6,255,488


$

5,878,582


$

5,566,169


















SUMMARY OF LOAN CLASSIFICATION
















Special Mention

$

65,141


$

49,382


$

43,149


$

46,512


$

47,445


Substandard


91,915



101,316



100,568



106,156



104,715


Doubtful


-



-



-



-



-


Total classified loans

$

157,056


$

150,698


$

143,717


$

152,668


$

152,160


















NONPERFORMING ASSETS
















Nonaccrual loans

$

24,171


$

24,325


$

24,604


$

25,495


$

28,743


Accruing loans 90 days past due


22



-



15



22



11


Total nonperforming loans


24,193



24,325



24,619



25,517



28,754


Foreclosed assets


196



-



-



-



-


Total nonperforming assets

$

24,389


$

24,325


$

24,619


$

25,517


$

28,754


















As a % of loans held-for-investment and foreclosed assets


0.37

%


0.38

%


0.39

%


0.43

%


0.52

%

As a % of end of period total assets


0.19



0.19



0.19



0.19



0.22



































Quarter Ended



2023



2022


CAPITAL RATIOS


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Common equity Tier 1 capital ratio


18.68

%


18.22

%


18.03

%


18.50

%


19.00

%

Tier 1 capital ratio


18.68



18.22



18.03



18.50



19.00


Total capital ratio


19.79



19.29



19.07



19.54



20.01


Tier 1 leverage ratio


11.53



10.96



10.79



10.65



10.78


Tangible common equity ratio


8.33



7.51



6.38



7.83



9.02


Equity/Assets ratio


10.55



9.76



8.64



10.02



11.18



















Quarter Ended



2023



2022


NONINTEREST INCOME


 Mar. 31, 



 Dec. 31, 



 Sept. 30, 



 June 30, 



 Mar. 31, 


Trust fees

$

9,845


$

10,122


$

10,314


$

9,742


$

9,817


Service charges on deposits


6,036



6,397



6,399



6,038



5,706


Debit card fees


4,936



5,899



5,587



9,868



8,926


Credit card fees


609



632



651



700



602


Gain on sale and fees on mortgage loans


2,974



2,904



4,070



5,728



6,333


Net gain on sale of available-for-sale securities


12



131



334



1,648



31


Net gain on sale of foreclosed assets


34



-



349



18



1,084


Net gain (loss) on sale of assets


930



(2)



526



6



(10)


Interest on loan recoveries


346



244



664



1,649



283


Other noninterest income


2,285



2,197



2,049



1,920



2,109


Total noninterest income

$

28,007


$

28,524


$

30,943


$

37,317


$

34,881


















NONINTEREST EXPENSE
















Salaries, commissions and employee benefits, excluding profit sharing

$

31,431


$

32,391


$

33,129


$

31,840


$

32,540


Profit sharing expense


30



565



763



1,307



1,598


Net occupancy expense


3,430



3,350



3,440



3,292



3,225


Equipment expense


2,127



2,053



2,396



2,346



2,257


FDIC assessment fees


1,654



1,021



917



904



869


Debit card expense


3,199



3,054



3,013



3,200



2,964


Legal, tax and professional fees


2,687



2,814



2,604



2,513



2,957


Audit fees


540



451



451



450



451


Printing, stationery and supplies


710



473



600



501



540


Amortization of intangible assets


228



299



306



320



320


Advertising, meals and public relations


1,475



1,646



1,692



1,554



1,493


Operational and other losses


931



982



869



782



596


Software amortization and expense


2,311



2,420



2,564



2,522



2,457


Other noninterest expense


6,503



6,259



6,698



6,802



6,958


Total noninterest expense

$

57,256


$

57,778


$

59,442


$

58,333


$

59,225


















TAX EQUIVALENT YIELD ADJUSTMENT*

$

3,131


$

3,751


$

3,807


$

4,083


$

3,782


*Calculations have been adjusted to remove effect of TEFRA disallowance

 

 

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)
























Three Months Ended




Three Months Ended


Mar. 31, 2023




Dec. 31, 2022



Average



Tax Equivalent



Yield /






Average



Tax Equivalent



Yield /




Balance



Interest



Rate






Balance



Interest



Rate


Interest-earning assets:






















Federal funds sold

$

2,507


$

32



5.12

%




$

3,165


$

36



4.57

%

Interest-bearing demand deposits in nonaffiliated banks


143,542



1,618



4.57






160,200



1,579



3.91


Taxable securities


3,672,257



20,782



2.26






3,761,206



21,152



2.25


Tax-exempt securities


1,750,533



12,743



2.91






2,001,185



15,740



3.15


Loans


6,500,332



89,464



5.58






6,391,703



86,381



5.36


Total interest-earning assets


12,069,171


$

124,639



4.19

%





12,317,459


$

124,888



4.02

%

Noninterest-earning assets


863,342












891,972








Total assets

$

12,932,513











$

13,209,431








Interest-bearing liabilities:






















Deposits

$

7,080,518


$

21,812



1.25

%




$

6,871,315


$

13,123



0.76

%

Borrowings


625,137



3,410



2.21






927,250



3,977



1.70


Total interest-bearing liabilities


7,705,655


$

25,222



1.33

%





7,798,565


$

17,100



0.87

%

Noninterest-bearing deposits


3,860,472












4,179,494








Other noninterest-bearing liabilities                                                                              


60,028












60,085








Shareholders' equity


1,306,358












1,171,287








Total liabilities and shareholders' equity

$

12,932,513











$

13,209,431






























Net interest income and margin (tax equivalent)*




$

99,417



3.34

%







$

107,788



3.47

%
























Three Months Ended




Three Months Ended


Sept. 30, 2022




June 30, 2022



Average



Tax Equivalent



Yield /






Average



Tax Equivalent



Yield /




Balance



Interest



Rate






Balance



Interest



Rate


Interest-earning assets:






















Federal funds sold

$

3,107


$

19



2.49

%




$

1,466


$

5



1.45

%

Interest-bearing demand deposits in nonaffiliated banks


248,929



1,413



2.25






288,784



547



0.76


Taxable securities


4,039,107



20,799



2.06






4,101,751



19,151



1.87


Tax-exempt securities


2,164,829



16,423



3.03






2,376,324



17,873



3.01


Loans


6,082,649



77,880



5.08






5,720,804



68,488



4.80


Total interest-earning assets


12,538,621


$

116,534



3.69

%





12,489,129


$

106,064



3.41

%

Noninterest-earning assets


833,980












825,711








Total assets

$

13,372,601











$

13,314,840








Interest-bearing liabilities:






















Deposits

$

7,004,478


$

8,787



0.50

%




$

7,049,041


$

2,967



0.17

%

Borrowings


768,096



784



0.40






730,477



232



0.13


Total interest-bearing liabilities


7,772,574


$

9,571



0.49

%





7,779,518


$

3,199



0.16

%

Noninterest-bearing deposits


4,178,675












4,064,207








Other noninterest-bearing liabilities                                                                              


61,320












65,475








Shareholders' equity


1,360,032












1,405,640








Total liabilities and shareholders' equity

$

13,372,601











$

13,314,840






























Net interest income and margin (tax equivalent)*




$

106,963



3.38

%







$

102,865



3.30

%
























Three Months Ended














Mar. 31, 2022















Average



Tax Equivalent



Yield /
















Balance



Interest



Rate














Interest-earning assets:






















Federal funds sold

$

1,015


$

1



0.52

%













Interest-bearing demand deposits in nonaffiliated banks


171,970



94



0.22














Taxable securities


4,231,949



17,823



1.68














Tax-exempt securities


2,612,025



18,107



2.77














Loans


5,487,538



64,766



4.79














Total interest-earning assets


12,504,497


$

100,791



3.27

%













Noninterest-earning assets


744,810




















Total assets

$

13,249,307




















Interest-bearing liabilities:






















Deposits

$

6,898,059


$

1,369



0.08

%













Borrowings


781,314



201



0.10














Total interest-bearing liabilities


7,679,373


$

1,570



0.08

%













Noninterest-bearing deposits


3,827,451




















Other noninterest-bearing liabilities                                                                              


64,999




















Shareholders' equity


1,677,484




















Total liabilities and shareholders' equity

$

13,249,307










































Net interest income and margin (tax equivalent)*




$

99,221



3.22

%



































*Calculations have been adjusted to remove effect of TEFRA disallowance



































 

Cision View original content:https://www.prnewswire.com/news-releases/first-financial-bankshares-announces-first-quarter-2023-earnings-301803548.html

SOURCE First Financial Bankshares, Inc.

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