FFIN First Financial Bankshares Inc

ABILENE, Texas, July 18, 2024 /PRNewswire/ -- First Financial Bankshares, Inc. (the "Company," "we," "us" or "our") (NASDAQ: FFIN) today reported earnings of $52.49 million for the second quarter of 2024 compared to earnings of $50.87 million for the same quarter a year ago and $53.4 million for the quarter ended March 31, 2024. Basic and diluted earnings per share were $0.37 for the second quarter of 2024 compared with $0.36 for the second quarter of 2023 and $0.37 for the linked quarter.

"We are pleased with the second quarter results that are highlighted by strong loan growth and net interest margin expansion which resulted in increased net interest income for the quarter," said F. Scott Dueser, Chairman, CEO and President of First Financial Bankshares, Inc., "Our outlook is positive for the remainder of the year as we look to continue to remix our assets as cash flows from maturing securities are invested in loans and execute strategies to grow deposits in our markets.  As always, we appreciate the support of customers, shareholders, and employees."

Net interest income for the second quarter of 2024 was $103.27 million compared to $95.87 million for the second quarter of 2023 and $100.24 million for the first quarter 2024. The net interest margin, on a taxable equivalent basis, was 3.48 percent for the second quarter of 2024 compared to 3.29 percent for the second quarter of 2023 and 3.34 percent in the first quarter of 2024. Increased margins are primarily due to an asset shift mix as securities cash flows are reinvested in the loan portfolio.  Average interest-earning assets were $12.23 billion for the second quarter of 2024 compared to $12.05 billion for the same quarter a year ago.

The Company recorded a provision for credit losses of $5.89 million for the second quarter of 2024 compared to a provision for credit losses of $5.57 million for the second quarter of 2023 and $808 thousand for the first quarter 2024. At June 30, 2024, the allowance for credit losses totaled $95.17 million, or 1.27 percent of loans held-for-investment ("loans" hereafter), compared to $86.54 million at June 30, 2023, or 1.28 percent of loans and $89.56 million at March 31, 2024 or 1.24 percent of total loans. Additionally, the reserve for unfunded commitments totaled $7.43 million at June 30, 2024 compared to $9.45 million at June 30, 2023 and $7.46 million at March 31, 2024.

For the second quarter of 2024, net charge-offs totaled $302 thousand compared to net charge-offs of $799 thousand for the second quarter of 2023 and net charge offs of $428 thousand for the first quarter 2024. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.81 percent at June 30, 2024, compared to 0.43 percent at June 30, 2023 and 0.51 percent at March 31, 2024. Classified loans totaled $219.26 million at June 30, 2024, compared to $175.14 million at June 30, 2023 and $201.59 million at March 31, 2024. The increase in nonperforming and classified loans in the second quarter 2024 is primarily related to one owner occupied commercial real estate loan in the DFW area that was classified and placed on nonaccrual during the quarter. 

Noninterest income for the second quarter of 2024 was $31.27 million compared to $29.95 million for the second quarter of 2023 and $29.38 million for the first quarter of 2024. Notable changes for the second quarter of 2024 when compared to the same quarter a year ago and for the linked quarter are as follows:

• Trust fee income increased $1.83 million from the second quarter 2023 and $335 thousand from the first quarter 2024. Trust revenue has increased primarily due to growth in assets under management and increases in oil and gas related fees.
• Debit card fees decreased by $1.58 million for the second quarter of 2024 from the prior year due to annual incentives that were recognized in the second quarter 2023. Annual incentives are being amortized throughout the year in 2024. Debit card fee income increased $254 thousand from the first quarter 2024.
• Mortgage income increased to $3.69 million compared to $3.53 million for the second quarter of 2023 and $3.13 million in the first quarter of 2024 as overall origination volume and margins have improved slightly from the prior year.
• Service charges on deposits decreased to $6.01 million for the second quarter of 2024 compared with $6.31 million for the second quarter of 2023 and $6.25 million for the first quarter of 2024, primarily due to lower revenue from overdraft fee income.

Noninterest expense for the second quarter of 2024 totaled $65.01 million compared to $57.61 million for the second quarter of 2023 and $63.94 million for the first quarter of 2024. Notable changes for the second quarter of 2024 when compared to the same quarter a year ago and for the linked quarter are as follows:

• Salary, commissions, and employee benefit costs increased to $37.47 million for the second quarter of 2024, compared to $31.77 million in the second quarter of 2023 and $36.68 million for the first quarter of 2024. The increase from the prior year is related primarily to increases of $1.93 million in profit sharing expense, $1.65 million in bonus and incentive accruals due to annualized earnings growth for several regions and $1.33 million in health insurance expenses. The increase from first quarter of 2024 is related to bonus and incentive accruals offset by a slight decrease in health insurance expenses.
• Noninterest expenses, excluding salary related costs, increased $1.69 million for the second quarter of 2024 compared to the same period in 2023 largely due to increases in software amortization and expense and legal, tax and professional fees. Non-interest expenses, excluding salary related costs, increased $283 thousand from the first quarter of 2024 due to a $1.08 million increase in legal, tax and professional fees, offset by decreases in FDIC insurance expense of $457 thousand and $385 thousand in operational and other losses.

The Company's efficiency ratio was 47.41 percent for the second quarter of 2024 compared to 44.74 percent for the second quarter of 2023 and 48.37 percent for the first quarter of 2024. The increase from the prior year is related to the increase in non-interest expense.  The decrease from the linked quarter is primarily due to the increase in net interest income. 

As of June 30, 2024, consolidated total assets were $13.16 billion compared to $12.83 billion on June 30, 2023, and $13.11 billion at December 31, 2023. Loans totaled $7.52 billion on June 30, 2024, compared with loans of $6.78 billion at June 30, 2023 and $7.15 billion at December 31, 2023.  During the second quarter of 2024, loans grew $290.32 million, or 16.15 percent annualized, when compared to March 31, 2024, balances. Loans have grown $370.94 million or 10.43 percent year-to-date.  Deposits totaled $11.41 billion at June 30, 2024, compared to $10.81 billion at June 30, 2023 and $11.14 billion at December 31, 2023.  

Shareholders' equity was $1.52 billion as of June 30, 2024, compared to $1.37 billion and $1.50 billion at June 30, 2023, and December 31, 2023, respectively, primarily due to accumulated earnings.  The unrealized loss on the securities portfolio, net of applicable tax, totaled $441.56 million at June 30, 2024, compared to unrealized losses of $490.28 million at June 30, 2023 and $403.30 million at December 31, 2023.

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, Franklin, 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 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, 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.