FFIN First Financial Bankshares Inc

ABILENE, Texas, April 19, 2018 /PRNewswire/ -- The Board of Directors of – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2018 of $34.52 million, up $7.92 million when compared with earnings of $26.60 million in the same quarter last year. Basic earnings per share were $0.51 for the first quarter of 2018 compared with $0.40 in the same quarter a year ago. The increase in net earnings and earnings per share in the current quarter when compared with the same quarter a year ago largely resulted from the recent enactment of tax legislation that reduced the corporate income tax rate from 35 percent to 21 percent. Without this adjustment, net earnings for the first quarter of 2018 would have been $30.26 million with an adjusted basic earnings per share of $0.45.

All amounts for the first quarter ended March 31, 2018, include the results of the Company's recent acquisition of Commercial Bancshares, Inc. and its wholly-owned subsidiary, Commercial State Bank, Kingwood, Texas, which was effective January 1, 2018. As of the acquisition date, Commercial State Bank had total assets of approximately $390.20 million, total loans of approximately $271.50 million and total deposits of approximately $345.90 million.

Net interest income for the first quarter of 2018 was $65.45 million compared with $57.02 million in the same quarter of 2017. The net interest margin, on a taxable equivalent basis, was 3.88 percent for the first quarter of 2018 compared to 4.00 percent in the fourth quarter of 2017 and 4.03 percent in the first quarter of 2017. The decrease in the Company's tax equivalent net interest margin in the current quarter when compared with the fourth quarter of 2017 and the first quarter of 2017 resulted from the change in corporate tax rate from 35 percent to 21 percent and the corresponding effect of that change on the Company's tax exempt bond portfolio. Included in interest income for the first quarter of 2018 was $645 thousand, or four basis points in net interest margin, related to discount accretion from fair value accounting related to the Kingwood and Orange acquisitions.  

The provision for loan losses was $1.31 million in the first quarter of 2018 compared with $1.44 million in the fourth quarter of 2017 and $1.95 million in the first quarter of 2017. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.66 percent at March 31, 2018, compared with 0.57 percent at December 31, 2017, and 0.90 percent at March 31, 2017. Classified loans totaled $124.06 million at March 31, 2018, compared to $117.21 million at December 31, 2017, and $122.62 million at March 31, 2017.

Noninterest income increased 14.74 percent in the first quarter of 2018 to $24.42 million compared with $21.29 million in the same quarter a year ago. Trust fees increased $887 thousand to $6.90 million in the first quarter of 2018 compared with $6.02 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $5.23 billion from $4.54 billion a year ago. ATM, interchange and credit card fees increased 13.50 percent to $7.00 million compared with $6.16 million in the same quarter last year due to continued growth in debit cards. Service charges on deposits increased 7.34 percent to $4.88 million compared with $4.55 million in the same quarter a year ago due to continued growth in net new accounts. In addition, a gain on sale of securities totaling $1.22 million was recorded in the first quarter of 2018 compared to $3 thousand in the same quarter of 2017. Offsetting these increases was a decrease in real estate mortgage fees of $484 thousand or 14.16 percent compared to the same quarter a year ago, partially due to a slowdown in refinance activity and the sale of the mortgage servicing portfolio in July 2017.

Noninterest expense for the first quarter of 2018 totaled $47.80 million compared to $42.15 million in the first quarter of 2017. The Company's efficiency ratio in the first quarter of 2018 was 51.76 percent compared with 49.67 percent in the same quarter last year. The increase in noninterest expense in the first quarter of 2018 was primarily a result of an increase in salary and employee benefit costs to $26.20 million compared to $23.26 million in the same quarter a year ago, primarily driven by the acquisition of Commercial State Bank and annual merit based pay increases. Also included in noninterest expense in the first quarter of 2018 were technology contract termination and conversion related costs totaling $1.55 million related to the Commercial State Bank acquisition.

As of March 31, 2018, consolidated assets for the Company totaled $7.57 billion compared to $7.25 billion at December 31, 2017 and $6.93 billion at March 31, 2017. Loans totaled $3.75 billion at quarter end compared with loans of $3.50 billion at December 31, 2017, and $3.39 billion at March 31, 2017. Deposits totaled $6.19 billion at March 31, 2018, compared to $5.96 billion at December 31, 2017, and $5.66 billion at March 31, 2017. Shareholders' equity rose to $969.81 million as of March 31, 2018, compared with $922.77 million at December 31, 2017, and $859.35 million at March 31, 2017. 

"We are pleased to get off to a good start for 2018 with our first quarter earnings performance, especially in light of the additional expenses incurred to complete our acquisition of Commercial State Bank," said F. Scott Dueser, Chairman, President and CEO. "We continue to see strong growth in trust fees and expect our recent acquisition of Commercial State Bank to contribute nicely to our bottom line. Also, we continue to visit with other potential acquisition candidates as well as working diligently on organically growing loans and deposits while reducing expenses to reward our shareholders, customers and employees even more."

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial is a financial holding company that through its subsidiary, First Financial Bank, N.A., operates multiple banking regions with 72 locations in Texas, following the close of this acquisition, 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,  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 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.