UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 19, 2006
FIRST FINANCIAL BANKSHARES, INC.
--------------------------------
(Exact Name of Registrant as Specified in its Charter)
Texas 0-7674 75-0944023
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(State or other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
400 Pine Street, Abilene, Texas 79601
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(Address of Principal Executive Offices and Zip Code)
Registrant's Telephone Number (325) 627-7155
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2 (b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.02 Results of Operations and Financial Condition
Attached as an exhibit to this Form 8-K is the earnings release for the
quarter ended December 31, 2005 of First Financial Bankshares, Inc.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST FINANCIAL BANKSHARES, INC.
(Registrant)
DATE: February 6, 2006 By: /S/ F. Scott Dueser
-------------------------------------
F. SCOTT DUESER
President and Chief Executive Officer
EXHIBIT
For immediate release For More Information:
J. Bruce Hildebrand,
Executive Vice President
325.627.7155
FIRST FINANCIAL BANKSHARES ANNOUNCES
FOURTH QUARTER EARNINGS RESULTS;
19th CONSECUTIVE YEAR OF INCREASED EARNINGS
ABILENE, Texas, January 19, 2006 - First Financial Bankshares, Inc. today
reported earnings for the fourth quarter of 2005 of $10.58 million, a 5.2
percent increase compared with $10.06 million in the same quarter last year.
Basic earnings per share were $0.51 compared with $0.49 in the same period last
year.
For the fourth quarter, net interest income increased 12.9 percent to $24.79
million compared with $21.96 million in the same quarter last year, primarily
due to an increase in interest-earning assets from the acquisition in February
2005 of The Peoples State Bank in Clyde and the acquisition in December 2005 of
The First National Bank of Bridgeport. The net interest margin, on a taxable
equivalent basis, was 4.43 percent for the fourth quarter of 2005 compared with
4.46 percent in the same period a year ago. This decrease in the net interest
margin was due primarily to the flattening yield curve between short and
long-term interest rates, which has put pressure on margins in recent quarters.
The provision for loan losses was $269,000 in the fourth quarter of 2005, down
from $614,000 in the same quarter last year.
Noninterest income in the fourth quarter increased 2.6 percent to $10.0 million
from $9.7 million in the same quarter a year earlier. Trust fees increased 12.3
percent to $1.9 million compared with $1.7 million in the fourth quarter of
2004. Revenue from service fees increased nominally to $5.5 million compared
with $5.4 million a year ago, due to a plateau in the usage of the overdraft
privilege product and the impact of rising rates on earnings credits for
commercial accounts.
Noninterest expense increased 15.3 percent in the fourth quarter of 2005 to
$19.5 million from $16.9 million in the fourth quarter last year. The increase
was due primarily to additional salary, employee benefits and facilities
expenses resulting from the acquisition of the Clyde and Bridgeport banks and
from the opening of five bank branches in Willow Park, Midlothian, Granbury and
two in Abilene. During the 2005 fourth quarter, the Company also incurred
$291,000 in conversion costs related to the Bridgeport acquisition. The
Company's efficiency ratio in the fourth quarter stood at 54.30 percent compared
with 51.42 percent in the same quarter a year ago. First Financial expects to
realize better efficiencies as the Company brings its newly acquired banks into
its template and as newly opened branches become profitable.
First Financial Bankshares reported its 19th consecutive year of increased
earnings. For the year, net income rose 12.4 percent to $44.02 million from
$39.17 million in 2004. Excluding PULSE proceeds of $3.9 million received during
the first, second and third quarters of 2005, net income for 2005 increased 5.9
percent to $41.49 million. Basic earnings per share rose 12.1 percent to $2.13,
compared with $1.90 in 2004. Excluding the PULSE gain, basic earnings per share
for 2005 were $2.00, an increase of 5.3 percent. Net interest income increased
13.5 percent in 2005 to $95.2 million from $83.9 million last year. The
provision for loan losses was $1.32 million for the year, compared with $1.63
million a year ago.
"We are pleased to report to our shareholders another year of earnings
increases, despite the short-term negative impact of our recent growth and the
flattening yield curve, which put pressure on our net interest margins and
impacted our bottom-line results," said F. Scott Dueser, President and Chief
Executive Officer. "This was a year of strong growth for First Financial, as we
added locations both through acquisitions and new branches. We feel our Company
has never been better positioned in so many attractive Texas markets, which
bodes well for our long-term future."
During the fourth quarter, First Financial completed its acquisition of The
First National Bank of Bridgeport and combined it with First Financial Bank,
N.A., Southlake, to create a bank with assets of $273 million serving customers
in northern Tarrant and Wise Counties. In addition, the Company opened a new
bank branch in Granbury.
As of December 31, 2005, consolidated assets for the Company totaled $2.734
billion compared with $2.315 billion a year ago. Loans increased 10.7 percent to
$1.289 billion at year end, compared with loans of $1.164 billion at the end of
2004. Total deposits rose 18.7 percent as of December 31, 2005 to $2.366 billion
from $1.994 billion a year earlier. The acquisition of banks in Clyde and
Bridgeport accounted for $122.9 million of the loan growth and $245.9 million of
the deposit growth. Shareholders' equity rose to $276.3 million as of December
31, 2005, compared with $265.5 million the prior year.
Headquartered in Abilene, Texas, First Financial Bankshares is a financial
holding company that operates ten separately chartered banks with 44 locations
in Texas, a trust company and a technology operating company. These subsidiaries
are First Financial Bank, N.A., Abilene, Clyde and Moran; First Financial Bank,
N.A., Eastland, Ranger and Rising Star; First Financial Bank, N.A., Cleburne,
Burleson, Alvarado and Midlothian; Hereford State Bank, Hereford; City National
Bank, Mineral Wells; San Angelo National Bank, San Angelo; First Financial Bank,
N.A., Southlake, Trophy Club, Keller, Bridgeport, Decatur and Boyd; First
Financial Bank, N.A., Stephenville, Granbury and Glen Rose; First National Bank,
Sweetwater, Roby and Trent; Weatherford National Bank, Weatherford, Willow Park
and Aledo; First Financial Trust & Asset Management Company, N.A.; and First
Technology Services, Inc.
The Company is listed on The Nasdaq Stock Market under the trading symbol FFIN.
For more information about First Financial Bankshares, please visit our Web site
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)
December 31,
---------------------------------
2005 2004
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ASSETS:
Cash and due from banks $ 130,359 $ 94,998
Fed funds sold 120,950 99,750
Investment securities 1,046,121 854,334
Loans 1,288,604 1,164,223
Allowance for loan losses (14,719) (13,837)
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Net loans 1,273,885 1,150,386
Premises and equipment 60,093 49,740
Goodwill 62,317 39,240
Other intangible assets 6,010 1,306
Other assets 34,092 25,470
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Total assets $ 2,733,827 $ 2,315,224
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Noninterest-bearing deposits $ 623,156 $ 512,009
Interest-bearing deposits 1,743,121 1,482,303
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Total deposits 2,366,277 1,994,312
Short-term borrowings 74,239 35,691
Other liabilities 17,035 19,675
Shareholders' equity 276,276 265,546
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Total liabilities and shareholders' equity $ 2,733,827 $ 2,315,224
================ ==============
Three Months Ended Year Ended
December 31, December 31,
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INCOME STATEMENTS 2005 2004 2005 2004
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Interest income $ 33,811 $ 26,662 $ 123,944 $ 99,973
Interest expense 9,023 4,699 28,757 16,077
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Net interest income 24,788 21,963 95,187 83,896
Provision for loan losses 269 614 1,320 1,633
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Net interest income after
provision for loan losses 24,519 21,349 93,867 82,263
Noninterest income 9,966 9,716 44,180 38,823
Noninterest expense 19,521 16,929 75,649 66,128
-------------- --------------- ---------------- --------------
Net income before income taxes 14,964 14,136 62,398 54,958
Income tax expense 4,383 4,078 18,375 15,787
-------------- --------------- ---------------- --------------
Net income $ 10,581 $ 10,058 $ 44,023 $ 39,171
============== =============== ================ ==============
PER COMMON SHARE DATA
Net income - basic $ 0.51 $ 0.49 $ 2.13 $ 1.90
Net income - diluted 0.51 0.48 2.12 1.89
Cash dividends 0.28 0.26 1.10 1.00
Book value 13.34 12.84
Market value 35.06 33.61
Shares outstanding - end of period 20,714,401 20,682,101 20,714,401 20,682,101
Average outstanding shares - basic 20,709,615 20,672,585 20,696,980 20,659,020
Average outstanding shares - diluted 20,791,465 20,761,607 20,777,518 20,751,900
PERFORMANCE RATIOS
Return on average assets 1.64 % 1.78 % 1.80 % 1.82 %
Return on average equity 15.32 15.00 16.17 15.09
Net interest margin (tax equivalent) 4.43 4.46 4.49 4.49
Efficiency ratio 54.30 51.42 52.48 51.78
Note: On April 26, 2005, the Company's Board of Directors declared a
four-for-three stock split in the form of a 33% stock dividend effective June 1,
2005. All share and per share amounts in this earnings release have been
restated to reflect this stock split.
FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands, except per share data)
Quarter Ended
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2005 2004
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Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
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ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $ 14,375 $ 14,323 $ 14,409 $ 13,837 $ 13,680
Loans charged off (529) (486) (552) (390) (1,099)
Loan recoveries 175 221 143 187 185
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Net (charge-offs) recoveries (354) (265) (409) (203) (914)
Allowance established at acquisition 429 - - 365 457
Provision for loan losses 269 317 323 410 614
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Balance at end of period $ 14,719 $ 14,375 $ 14,323 $ 14,409 $ 13,837
=========== ============= ============== =============== ==============
Allowance for loan losses /
period-end loans 1.14 % 1.19 % 1.20 % 1.20 % 1.19 %
Allowance for loan losses /
nonperforming loans 415.9 475.1 609.7 462.6 324.7
Net charge-offs / average loans
(annualized) 0.11 0.09 0.14 0.07 0.32
NONPERFORMING ASSETS
Nonaccrual loans $ 3,524 $ 2,989 $ 2,323 $ 3,112 $ 4,142
Accruing loans 90 days past due 15 37 26 3 120
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Total nonperforming loans 3,539 3,026 2,349 3,115 4,262
Foreclosed assets 705 796 838 1,138 779
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Total nonperforming assets $ 4,244 $ 3,822 $ 3,187 $ 4,253 $ 5,041
=========== ============= ============== =============== ==============
As a % of loans and foreclosed assets 0.33 % 0.32 % 0.27 % 0.35 % 0.43 %
CAPITAL RATIOS
Tier 1 Risk-based 13.91 % 15.90 % 15.60 % 15.37 % 16.46 %
Total Risk-based 14.87 16.92 16.62 16.41 17.49
Tier 1 Leverage 8.37 9.30 9.08 8.94 9.80
Equity to assets 10.11 11.15 11.30 11.07 11.47
Three Months Ended Year Ended
December 31, December 31,
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RECONCILIATION OF NET INCOME 2005 2004 2005 2004
-------------- -------------- --------------- --------------
Net Income $ 10,581 $ 10,058 $ 44,023 $ 39,171
Gain on sale of PULSE ownership rights - - 3,895 -
Less Tax Effect - - (1,363) -
-------------- -------------- --------------- --------------
Net Gain on sale of Pulse ownership rights - - 2,532 -
-------------- -------------- --------------- --------------
Net Income excluding gain on sale of Pulse
Ownership rights $ 10,581 $ 10,058 $ 41,491 $ 39,171
============== ============== =============== ==============
FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
-------------------------------- ---------------------------------
NONINTEREST INCOME 2005 2004 2005 2004
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Gain on sale of student loans, net $ 48 $ 80 $ 1,802 $ 2,592
Gain on sale of PULSE ownership rights - - 3,895 -
Gain on securities transactions, net 6 336 235 388
Trust fees 1,916 1,707 7,068 6,374
Service charges on deposits 5,493 5,373 21,381 20,430
Real estate mortgage fees 474 435 2,081 1,982
Net gain (loss) on sale of foreclosed assets (3) 1 60 172
ATM and credit card fees 1,331 1,063 4,961 3,908
Other noninterest income 701 721 2,697 2,977
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Total Noninterest Income $ 9,966 $ 9,716 $ 44,180 $ 38,823
============== =============== ================ ==============
Three Months Ended Year Ended
December 31, December 31,
-------------------------------- ---------------------------------
NONINTEREST EXPENSE 2005 2004 2005 2004
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Salaries and Employee Benefits $ 10,268 $ 8,770 $ 40,317 $ 35,529
Net Occupancy Expense 1,353 1,060 5,043 4,196
Equipment Expense 1,675 1,387 6,191 5,533
Printing, Stationery and Supplies 497 455 1,988 1,716
ATM and credit card expenses 747 646 2,908 2,307
Audit Fees 311 234 1,104 857
Legal, Tax and Professional Fees 688 597 2,611 2,196
Correspondent Bank Service Charges 342 384 1,438 1,577
Advertising and Public Relations 665 526 2,558 2,146
Amortization of Intangible Assets 214 46 680 162
Other Noninterest Expense 2,761 2,824 10,811 9,909
-------------- --------------- ---------------- --------------
Total Noninterest Expense $ 19,521 $ 16,929 $ 75,649 $ 66,128
============== =============== ================ ==============
TAX EQUIVALENT YIELD ADJUSTMENT $ 1,194 $ 1,244 $ 4,793 $ 4,997
============== =============== ================ ==============
Three Months Ended Year Ended
SELECTED AVERAGE BALANCES December 31, December 31,
-------------------------------- ---------------------------------
2005 2004 2005 2004
-------------- --------------- ---------------- --------------
Total Loans $ 1,234,668 $ 1,135,634 $ 1,209,094 $ 1,044,010
Investment Securities 1,004,678 882,728 958,879 906,651
Federal Funds Sold and Other Short Term Investments 89,678 49,376 61,059 28,032
-------------- --------------- ---------------- --------------
Total Interest Earning Assets $ 2,329,024 $ 2,067,738 $ 2,229,032 $ 1,978,693
============== =============== ================ ==============
Interest Bearing Deposits $ 1,633,161 $ 1,424,084 $ 1,563,709 $ 1,350,991
Federal Funds Purchased and Repurchase Agreements 64,184 46,343 58,162 55,635
-------------- --------------- ---------------- --------------
Total Interest Bearing Liabilities $ 1,697,345 $ 1,470,427 $ 1,621,871 $ 1,406,626
============== =============== ================ ==============
Total Deposits $ 2,197,452 $ 1,922,424 $ 2,100,937 $ 1,816,461
============== =============== ================ ==============
Shareholders' Equity $ 274,005 $ 266,726 $ 272,298 $ 259,502
============== =============== ================ ==============
Total Assets $ 2,558,916 $ 2,254,207 $ 2,449,845 $ 2,148,341
============== =============== ================ ==============