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): April 20, 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 March 31, 2006 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: April 20, 2006 By: /S/ F. Scott Dueser
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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
FIRST QUARTER EARNINGS RESULTS
ABILENE, Texas, April 20, 2006 - First Financial Bankshares, Inc. today reported
earnings for the first quarter of 2006 of $11.47 million, compared with $12.08
million in the same quarter last year. Basic earnings per share were $0.55
compared with $0.58 in the same period last year. The 2005 results included a
$3.0 million special distribution of proceeds to the Company from the merger of
PULSE EFT Association and Discover Financial Services, Inc. Excluding these
special proceeds, the Company's net income in the first quarter of 2006 would
have increased 13.10 percent and its basic earnings per share 12.24 percent.
Net interest income for the first quarter increased 12.22 percent to $25.65
million compared with $22.86 million in the same quarter last year, primarily
due to an increase in interest-earning assets from the acquisition in December
2005 of The First National Bank of Bridgeport. The net interest margin, on a
taxable equivalent basis, was 4.41 percent for the first quarter of 2006
compared with 4.52 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 $333,000 in the first quarter of
2006, down from $410,000 in the same quarter last year.
Noninterest income in the first quarter was $11.48 million compared with $13.35
million in the same quarter a year earlier. However, excluding the proceeds from
the PULSE/Discover transaction described above, noninterest income in the first
quarter of 2005 would have been $10.37 million, a 10.68 percent increase. Trust
fees increased 7.70 percent to $1.85 million compared with $1.72 million in the
first quarter last year. Revenue from service fees increased 5.38 percent to
$5.29 million compared with $5.02 million a year ago. The net gain on the sale
of student loans was $1.41 million versus $1.31 million in the same quarter last
year, based on the sale of $47 million compared to $44 million in the first
quarter of 2005.
Noninterest expense increased 10.62 percent in the first quarter of 2006 to
$20.51 million from $18.54 million in the same quarter last year. The increase
was due primarily to additional salary, employee benefits and facilities
expenses resulting from the acquisition of the Bridgeport bank and from the
opening of new bank branches in Midlothian, Granbury and two in Abilene. The
Company's efficiency ratio in the first quarter stood at 53.54 percent compared
with 49.54 percent in the same quarter a year ago. Without the PULSE/Discover
proceeds described above, the first quarter 2005 efficiency ratio was 53.82
percent. 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.
"We are pleased to begin the year with solid first quarter results," said F.
Scott Dueser, President and Chief Executive Officer. "These came despite the
continuing flat yield curve, which has put pressure on our net interest margin,
and the highly competitive banking environment in Texas."
As of March 31, 2006, consolidated assets for the Company totaled $2.76 billion
compared with $2.41 billion a year ago. Loans increased 4.66 percent to $1.25
billion at quarter end, compared with loans of $1.20 billion at the end of the
2005 first quarter. Total deposits rose 14.01 percent as of March 31, 2006 to
$2.37 billion from $2.08 billion a year earlier. The acquisition of The First
National Bank of Bridgeport accounted for $65.9 million of the loan growth and
$132.0 million of the deposit growth. Shareholders' equity rose to $280.6
million as of March 31, 2006, compared with $266.6 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)
March 31,
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2006 2005
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ASSETS:
Cash and due from banks $ 117,189 $ 91,934
Fed funds sold 132,925 50,950
Investment securities 1,105,816 947,346
Loans 1,254,973 1,199,117
Allowance for loan losses (15,116) (14,409)
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Net loans 1,239,857 1,184,708
Premises and equipment 60,933 53,997
Goodwill 62,035 50,758
Other intangible assets 5,855 2,956
Other assets 33,508 25,692
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Total assets $ 2,758,118 $ 2,408,341
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Noninterest-bearing deposits $ 608,161 $ 521,453
Interest-bearing deposits 1,760,958 1,556,481
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Total deposits 2,369,119 2,077,934
Short-term borrowings 86,384 43,520
Other liabilities 21,987 20,322
Shareholders' equity 280,628 266,565
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Total liabilities and shareholders' equity $ 2,758,118 $ 2,408,341
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Three Months Ended
March 31,
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INCOME STATEMENTS 2006 2005
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Interest income $ 36,401 $ 28,534
Interest expense 10,750 5,677
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Net interest income 25,651 22,857
Provision for loan losses 333 410
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Net interest income after
provision for loan losses 25,318 22,447
Noninterest income 11,478 13,350
Noninterest expense 20,511 18,542
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Net income before income taxes 16,285 17,255
Income tax expense 4,818 5,179
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Net income $ 11,467 $ 12,076
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PER COMMON SHARE DATA
Net income - basic $ 0.55 $ 0.58
Net income - diluted 0.55 0.58
Cash dividends 0.28 0.26
Book value 13.55 12.88
Market value 38.30 33.47
Shares outstanding - end of period 20,717,481 20,688,642
Average outstanding shares - basic 20,715,484 20,684,392
Average outstanding shares - diluted 20,773,616 20,772,559
PERFORMANCE RATIOS
Return on average assets 1.71 % 2.04 %
Return on average equity 16.71 18.19
Net interest margin (tax equivalent) 4.41 4.52
Efficiency ratio 53.54 49.54
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)
Quarter Ended
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2006 2005
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March 31, Dec. 31, Sep. 30, June 30, March 31,
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ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $ 14,719 $ 14,375 $ 14,323 $ 14,409 $ 13,837
Loans charged off (380) (529) (486) (552) (390)
Loan recoveries 444 175 221 143 187
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Net (charge-offs) recoveries 64 (354) (265) (409) (203)
Allowance established at acquisition - 429 - - 365
Provision for loan losses 333 269 317 323 410
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Balance at end of period $ 15,116 $ 14,719 $ 14,375 $ 14,323 $ 14,409
============ ============= ============= =============== ==============
Allowance for loan losses /
period-end loans 1.20 % 1.14 % 1.19 % 1.20 % 1.20 %
Allowance for loan losses /
nonperforming loans 401.3 415.9 475.1 609.7 462.6
Net charge-offs (recoveries) / average loans
(annualized) (0.02) 0.11 0.09 0.14 0.07
NONPERFORMING ASSETS
Nonaccrual loans $ 3,570 $ 3,524 $ 2,989 $ 2,323 $ 3,112
Accruing loans 90 days past due 197 15 37 26 3
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Total nonperforming loans 3,767 3,539 3,026 2,349 3,115
Foreclosed assets 588 705 796 838 1,138
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Total nonperforming assets $ 4,355 $ 4,244 $ 3,822 $ 3,187 $ 4,253
============ ============= ============= =============== ==============
As a % of loans and foreclosed assets 0.35 % 0.33 % 0.32 % 0.27 % 0.35 %
CAPITAL RATIOS
Tier 1 Risk-based 14.54 % 14.17 % 15.90 % 15.60 % 15.37 %
Total Risk-based 15.52 15.13 16.92 16.62 16.41
Tier 1 Leverage 8.22 8.56 9.30 9.08 8.94
Equity to assets 10.17 10.11 11.15 11.30 11.07
RECONCILIATION OF NET INCOME TO NET Three Months Ended
INCOME EXCLUDING GAIN ON SALE OF PULSE March 31,
OWNERSHIP RIGHTS --------------------------------
2006 2005
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Net Income $ 11,467 $ 12,076
Gain on sale of PULSE ownership rights - 2,980
Less Tax Effect - (1,043)
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Net Gain on sale of Pulse ownership rights - 1,937
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Net Income excluding gain on sale of Pulse
Ownership rights $ 11,467 $ 10,139
=============== ==============
FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)
Three Months Ended
March 31,
--------------------------------
2006 2005
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NONINTEREST INCOME
Gain on sale of student loans, net $ 1,410 $ 1,309
Gain on sale of PULSE ownership rights - 2,980
Gain on securities transactions, net - 41
Trust fees 1,847 1,715
Service charges on deposits 5,288 5,018
Real estate mortgage fees 449 412
Net gain (loss) on sale of foreclosed assets (11) 12
ATM and credit card fees 1,440 1,123
Other noninterest income 1,055 740
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Total Noninterest Income $ 11,478 $ 13,350
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Three Months Ended
March 31,
--------------------------------
2006 2005
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NONINTEREST EXPENSE
Salaries and Employee Benefits $ 11,388 $ 9,879
Net Occupancy Expense 1,475 1,155
Equipment Expense 1,705 1,486
Printing, Stationery and Supplies 498 521
ATM and credit card expenses 810 680
Audit Fees 249 423
Legal, Tax and Professional Fees 544 734
Correspondent Bank Service Charges 312 383
Advertising and Public Relations 567 673
Amortization of Intangible Assets 226 103
Other Noninterest Expense 2,737 2,505
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Total Noninterest Expense $ 20,511 $ 18,542
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TAX EQUIVALENT YIELD ADJUSTMENT $ 1,177 $ 1,223
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AVERAGE BALANCES AND YIELD/RATES Three Months Ended
March 31, 2006
----------------------------------------------------
Average Tax Equivalent Yield /
Balance Interest Rate
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Interest Earning Assets:
Fed Funds Sold $ 105,580 $ 1,117 4.23 %
Interest Bearing Deposits in Nonaffiliated Banks 5,904 64 4.35 %
Taxable Securities 841,914 9,250 4.39 %
Tax Exempt Securities 230,310 3,612 6.27 %
Loans 1,286,932 23,535 7.42 %
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Total Interest Earning Assets 2,470,640 37,578 6.17 %
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Non-interest Earning Assets 256,474
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Total Assets $ 2,727,114
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Interest Bearing Liabilities:
Deposits $ 1,757,804 $ 9,854 2.27 %
Fed Funds Purchased and Other Short Term Borrowings 88,229 896 4.12 %
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Total Interest Bearing Liabilities 1,846,033 10,750 2.36 %
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Non-interest Bearing Liabilities 602,716
Shareholders' Equity 278,365
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Total Liabilities and Shareholders' Equity $ 2,727,114
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Net Interest Income and Margin (Tax Equivalent) $ 26,828 4.41 %
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