PR Newswire | Jan 28, 2021 04:06PM EST

Of Consecutive Annual Earnings Growth

01/28 15:05 CST

First Financial Bankshares Announces Fourth Quarter 2020 Earnings And 34th Year Of Consecutive Annual Earnings Growth ABILENE, Texas, Jan. 28, 2021

ABILENE, Texas, Jan. 28, 2021 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the fourth quarter of 2020 of $58.48 million, or $0.41 per diluted share, compared with earnings of $41.39 million, or $0.30 per diluted share, for the fourth quarter of 2019, representing a $17.09 million, or 41.28 percent, increase.

Earnings for the year ended December 31, 2020 totaled $202.03 million, or $1.42 per diluted share, compared to $164.81 million, or $1.21 per diluted share, for the year ended December 31, 2019, representing a $37.22 million, or 22.58 percent increase.

All amounts for the fourth quarter and year ended December 31, 2020, include the results of the Company's acquisition of TB&T Bancshares, Inc. and its wholly-owned subsidiary, The Bank & Trust of Bryan/College Station, Texas, which was effective January 1, 2020.

"We are extremely pleased with both our quarterly and annual results representing our 34th consecutive year of annual earnings growth. During 2020, in the face of the pandemic, two hurricanes and one tornado, we stayed Texas Strong, kept our doors open and served our customers and communities while keeping our associates safe. Because of this, the Company had organic asset growth of $1.9 billion, excluding the $775 million acquisition of The Bank & Trust of Bryan/College Station. We originated $704 million in PPP loans, $1.21 billion in secondary market mortgage loans for over 4,000 families across Texas and grew trust assets managed to $7.51 billion. In 2020, we recorded annual earnings of $202.03 million and ended the year with strong momentum and are very optimistic about our outlook for 2021," said F. Scott Dueser, Chairman, President and CEO of First Financial Bankshares, Inc.

Net interest income for the fourth quarter of 2020 was $90.54 million, up $15.22 million, from $75.32 million for the fourth quarter of 2019. The net interest margin, on a tax equivalent basis, was 3.75 percent for the quarter compared to 3.99 percent a year ago and 3.75 percent from last quarter. Net interest income was positively impacted by a $2.29 billion increase in average-earning assets to $9.96 billion for the fourth quarter of 2020 when compared to the same period a year ago. For the fourth quarter of 2020, interest income included Payroll Protection Program ("PPP") loan fees of $5.67 million compared to $2.83 million for the third quarter of 2020, and accretion from acquired loans of $571 thousand compared to $384 thousand in the same quarter last year and $1.85 million for the third quarter of 2020.

During the fourth quarter of 2020, $220.34 million of PPP loans were forgiven and the remaining PPP loans totaled $483.66 million at December 31, 2020 ($624.15 million and $479.43 million in average balances for the fourth quarter and year-to-date, respectively). The remainder of the PPP loan deferred fees totaled $11.27 million at December 31, 2020 and continue to be amortized over the shorter of the repayment period or the contractual life of 24 months.

The Company initially elected to delay implementation of CECL, and calculated and recorded the provision for credit losses through the nine-months ended September 30, 2020 under the incurred loss model. The Company elected to adopt CECL, effective as of January 1, 2020, through a transition charge to retained earnings of $589 thousand ($466 thousand net of applicable income taxes).

At December 31, 2020, the Company calculated the allowance for credit losses utilizing the CECL methodology which resulted in a net reversal of provision for credit losses during the fourth quarter of 2020 of $8.03 million, comprised of a reversal of provision for loan losses of $10.00 million and a provision for unfunded commitments of $1.97 million. The Company's provision for credit losses in the fourth quarter of 2020 reflected the improved economic outlook for our markets across Texas and general improvement in overall asset quality. During the fourth quarter of 2020, net charge-offs totaled $561 thousand compared to $340 thousand in the fourth quarter of 2019. At December 31, 2020, the allowance for credit losses totaled $66.53 million, or 1.29 percent of loans held-for-investment ("loans" hereafter), or 1.42 percent of loans excluding PPP loans, compared to $52.50 million at December 31, 2019, or 1.25 percent of loans. Additionally, the reserve for unfunded commitments totaled $5.49 million at December 31, 2020 compared to $809 thousand at December 31, 2019. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.83 percent at December 31, 2020, compared with 0.61 percent at December 31, 2019. Classified loans totaled $197.45 million at December 31, 2020, compared to $140.66 million at December 31, 2019.

During 2020, the Company offered deferral and extensions of principal and/or interest payments to selected borrowers on a case-by-case basis, considering the current and projected profile of the borrower. At December 31, 2020, the Company had approximately 59 loans totaling $2.69 million subject to deferral and extension agreements compared to 122 loans totaling $18.65 million at September 30, 2020.

At December 31, 2020, loans with oil and gas industry exposure totaled $106.24 million, or 2.27 percent of outstanding loans, excluding PPP loans. These loans comprised $13.30 million of classified loans including $4.77 million in nonaccrual loans. Net charge-offs related to this portfolio totaled $825 thousand for the year ended December 31, 2020.

In addition, at December 31, 2020, loans in the retail/restaurant/hospitality industries totaled $359.33 million, or 7.67 percent, of the Company's outstanding loans, excluding PPP loans. These loans comprised $31.19 million of classified loans, including $5.98 million in nonaccrual loans. Net charge-offs related to this portfolio totaled $895 thousand for the year ended December 31, 2020.

Noninterest income in the fourth quarter of 2020 rose to $35.71 million from $27.35 million for the fourth quarter of 2019, as a result of the following:

* Trust fees increased to $7.67 million in the fourth quarter of 2020 from $7.34 million in the fourth quarter of 2019. The fair value of trust assets managed increased to $7.51 billion, up 11.33 percent at December 31, 2020 from $6.75 billion at December 31, 2019. * Service charges on deposits were $5.33 million in the fourth quarter of 2020 compared with $5.86 million in the fourth quarter of 2019. * ATM, interchange and credit card fees increased to $8.38 million in the fourth quarter of 2020 from $7.94 million in the fourth quarter of 2019, driven by continued growth in the number of debit cards issued and customer utilization. * Mortgage income increased to $11.12 million compared with $4.22 million in the fourth quarter of 2019 due to a significant increase in the volume of loans originated. The Company's mortgage pipeline increased to $198.46 million at December 31, 2020, when compared to $45.46 million at December 31, 2019. * The Company originated seven loans totaling $141.95 million ($7.10 million retained on the balance sheet, net of the 95% participations sold to the Federal Reserve), in Main Street Lending loans and recognized fees of $1.07 million during the fourth quarter ($1.40 million for the year), which are included in other noninterest income.

Noninterest expense for the fourth quarter of 2020 totaled $63.71 million compared to $51.94 million in the fourth quarter of 2019, as a result of the following:

* Salary, commissions and employee benefit costs totaled $41.02 million for the fourth quarter of 2020, compared to $31.64 million in the fourth quarter of 2019. The increase over the prior year was primarily driven by the acquisition, annual merit-based pay increases, higher mortgage related commissions, and increases in the fourth quarter of 2020 to incentive compensation based on the overall 2020 operating results. Additionally, the fourth quarter of 2019 included $1.70 million charge related to the termination of an acquired pension plan. * Noninterest expense in the fourth quarter of 2020 included merger related costs totaling $475 thousand, and $4.88 million for the year ended December 31, 2020, as a result of The Bank & Trust acquisition, while no significant conversion related costs were incurred in the fourth quarter or year ended December 31, 2019.

The Company's efficiency ratio was 45.49 percent for 2020 compared to 48.61 percent for 2019.

As of December 31, 2020, consolidated assets for the Company totaled $10.90 billion compared to $8.26 billion at December 31, 2019. Loans totaled $5.17 billion at December 31, 2020, compared with loans of $4.19 billion at December 31, 2019. During the fourth quarter of 2020, loans, excluding PPP loans, grew $97.42 million, or 8.44 percent annualized, from September 30, 2020 balances. Deposits totaled $8.68 billion at December 31, 2020, compared to $6.60 billion at December 31, 2019, driven by organic growth and the acquisition.

Shareholders' equity rose to $1.68 billion as of December 31, 2020, compared to $1.23 billion at December 31, 2019, primarily from The Bank & Trust acquisition, undistributed earnings and the net increase in the net unrealized gain on investment securities while tangible book value per common share increased to $9.57 at December 31, 2020 compared to $7.75 at December 31, 2019, representing a 23.48 percent increase. At December 31, 2020, the Company's capital ratios significantly exceeded all well-capitalized requirements.

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 78 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, 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 http://www.ffin.com.

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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; 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

2020 2019

ASSETS Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,

Cash and due from banks $ 211,113 $ 175,088 $ 188,373 $ 191,486 $ 231,534

Interest-bearing deposits in banks 517,971 58,933 196,426 76,378 47,920

Federal funds sold - - - - 3,150

Investment securities 4,393,029 4,431,280 4,118,863 4,107,069 3,413,317

Loans, held-for-investment 5,171,033 5,293,679 5,253,067 4,639,389 4,194,969

Allowance for loan losses (66,534) (76,038) (68,947) (60,440) (52,499)

Net loans, held-for-investment 5,104,499 5,217,641 5,184,120 4,578,949 4,142,470

Loans, held-for-sale 83,969 101,055 66,370 42,034 28,228

Premises and equipment, net 142,269 141,002 138,933 139,554 131,022

Goodwill 313,481 313,481 313,481 312,842 171,565

Other intangible assets 4,911 5,394 5,884 6,392 2,102

Other assets 133,258 123,778 127,367 246,387 90,919

Total assets $ 10,904,500 $ 10,567,652 $ 10,339,817 $ 9,701,091 $ 8,262,227

LIABILITIES AND SHAREHOLDERS' EQUITY

Noninterest-bearing deposits $ 2,982,697 $ 2,950,407 $ 2,941,679 $ 2,288,597 $ 2,065,128

Interest-bearing deposits 5,693,120 5,344,481 5,215,963 4,921,869 4,538,678

Total deposits 8,675,817 8,294,888 8,157,642 7,210,466 6,603,806

Borrowings 430,093 503,163 449,224 857,871 381,356

Other liabilities 120,400 150,100 150,502 106,392 49,868

Shareholders' equity 1,678,190 1,619,501 1,582,449 1,526,362 1,227,197

Total liabilities and shareholders' equity $ 10,904,500 $ 10,567,652 $ 10,339,817 $ 9,701,091 $ 8,262,227

Quarter Ended

2020 2019

INCOME STATEMENTS Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,

Interest income $ 92,457 $ 91,373 $ 92,197 $ 88,100 $ 82,123

Interest expense 1,920 2,163 2,962 7,198 6,801

Net interest income 90,537 89,210 89,235 80,902 75,322

Provision for credit losses (8,033) 9,000 8,700 9,850 950

Net interest income after provisions for credit losses 98,570 80,210 80,535 71,052 74,372

Noninterest income 35,709 38,575 36,919 28,732 27,347

Noninterest expense 63,705 55,593 53,321 55,318 51,938

Net income before income taxes 70,574 63,192 64,133 44,466 49,781

Income tax expense 12,099 10,335 10,663 7,234 8,393

Net income $ 58,475 $ 52,857 $ 53,470 $ 37,232 $ 41,388

PER COMMON SHARE DATA

Net income - basic $ 0.41 $ 0.37 $ 0.38 $ 0.26 $ 0.30

Net income - diluted 0.41 0.37 0.38 0.26 0.30

Cash dividends declared 0.13 0.13 0.13 0.12 0.12

Book value 11.80 11.40 11.14 10.73 9.03

Tangible book value 9.57 9.15 8.89 8.48 7.75

Market value $ 36.17 $ 27.91 $ 28.89 $ 26.84 $ 35.10

Shares outstanding - end of period 142,161,834 142,121,595 142,035,396 142,314,930 135,891,755

Average outstanding shares - basic 142,057,705 141,980,707 141,973,522 142,118,864 135,747,381

Average outstanding shares - diluted 142,644,088 142,529,242 142,454,083 142,735,208 136,539,286

PERFORMANCE RATIOS

Return on average assets 2.19 % 2.01 % 2.06 % 1.63 % 2.01 %

Return on average equity 14.27 13.14 14.00 10.11 13.56

Return on average tangible equity 17.74 16.41 17.67 12.89 15.83

Net interest margin (tax equivalent) 3.75 3.75 3.78 3.91 3.99

Efficiency ratio 49.15 42.45 41.32 49.63 49.75

Year Ended

Dec. 31,

INCOME STATEMENTS 2020 2019

Interest income $ 364,128 $ 319,192

Interest expense 14,243 30,102

Net interest income 349,885 289,090

Provision for credit losses 19,517 2,965

Net interest income after provisions for credit losses 330,368 286,125

Noninterest income 139,935 108,428

Noninterest expense 227,938 196,521

Net income before income taxes 242,365 198,032

Income tax expense 40,331 33,220

Net income $ 202,034 $ 164,812

PER COMMON SHARE DATA

Net income - basic $ 1.42 $ 1.22

Net income - diluted 1.42 1.21

Cash dividends declared 0.51 0.47

Book value 11.80 9.03

Tangible book value 9.57 7.75

Market value $ 36.17 $ 35.10

Shares outstanding - end of period 142,161,834 135,891,755

Average outstanding shares - basic 142,032,420 135,647,354

Average outstanding shares - diluted 142,544,991 136,346,019

PERFORMANCE RATIOS

Return on average assets 1.98 % 2.08 %

Return on average equity 12.93 14.37

Return on average tangible equity 16.25 16.95

Net interest margin (tax equivalent) 3.79 3.98

Efficiency ratio 45.49 48.61

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2020 2019

ALLOWANCE FOR LOAN LOSSES Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,

Balance at beginning of period $ 76,038 $ 68,947 $ 60,440 $ 52,499 $ 51,889

Loans charged off (1,339) (853) (894) (2,227) (834)

Loan recoveries 778 444 701 318 494

Net recoveries (charge-offs) (561) (409) (193) (1,909) (340)

Initial adoption of ASU 2016-13 (CECL) - recorded in retained earnings (619) - - - -

Reclassification of credit marks on purchased credit deteriorated (PCD) loans 1,678 - - - -

Provision for loan losses (10,002) 7,500 8,700 9,850 950

Balance at end of period $ 66,534 $ 76,038 $ 68,947 $ 60,440 $ 52,499

ALLOWANCE FOR UNFUNDED COMMITMENTS

Balance at beginning of period $ 2,309 $ 809 $ 809 $ 809 $ 809

Initial adoption of ASU 2016-13 (CECL) - recorded in retained earnings 1,208 - - - -

Provision for unfunded commitments 1,969 1,500 - - -

Balance at end of period $ 5,486 $ 2,309 $ 809 $ 809 $ 809

Allowance for loan losses /

period-end loans held-for-investment 1.29 % 1.44 % 1.31 % 1.30 % 1.25 %

Allowance for loan losses /

nonperforming loans 155.61 177.99 174.83 153.16 212.02

Net charge-offs / average total loans

(annualized) 0.04 0.03 0.01 0.16 0.03

SUMMARY OF LOAN CLASSIFICATION

Special Mention $ 56,585 $ 66,033 $ 63,489 $ 87,099 $ 63,371

Substandard 140,866 136,010 137,408 103,249 77,284

Doubtful - - - - -

Total classified loans $ 197,451 $ 202,043 $ 200,897 $ 190,348 $ 140,655

NONPERFORMING ASSETS

Nonaccrual loans $ 42,619 $ 42,673 $ 39,320 $ 39,226 $ 24,582

Accruing troubled debt restructured loans 24 25 25 26 26

Accruing loans 90 days past due 113 23 92 209 153

Total nonperforming loans 42,756 42,721 39,437 39,461 24,761

Foreclosed assets 142 331 287 983 1,009

Total nonperforming assets $ 42,898 $ 43,052 $ 39,724 $ 40,444 $ 25,770

As a % of loans held-for-investment and foreclosed assets 0.83 % 0.81 % 0.76 % 0.87 % 0.61 %

As a % of end of period total assets 0.39 0.41 0.38 0.42 0.31

OIL AND GAS PORTFOLIO INFORMATION *

Oil and gas loans $ 106,237 $ 118,567 $ 128,143 $ 117,223 $ 119,789

Oil and gas loans as a % of total loans held-for-investment 2.27 % 2.58 % 2.82 % 2.53 % 2.86 %

Classified oil and gas loans 13,298 26,823 28,366 22,032 7,041

Nonaccrual oil and gas loans 4,774 6,800 3,702 3,477 481

Net charge-offs for oil and gas loans 24 - 195 606 -

* Excluding PPP loans

RETAIL/RESTAURANT/HOSPITALITY PORTFOLIO INFORMATION *

Retail loans $ 216,244 $ 229,386 $ 216,244 $ 217,380

Restaurant loans 48,618 39,523 46,418 25,570

Hotel loans 71,716 63,273 51,957 46,690

Other hospitality loans 21,970 26,041 23,230 8,470

Travel loans 780 801 908 937

Total Retail/Restaurant/Hospitality loans $ 359,328 $ 359,024 $ 338,757 $ 299,047

Retail/Restaurant/Hospitality loans as a % of total loans held-for-investment 7.67 % 7.82 % 7.45 % 6.45 %

Classified Retail/Restaurant/Hospitality loans $ 31,192 $ 28,171 $ 15,837 $ 5,680

Nonaccrual Retail/Restaurant/Hospitality loans 5,975 5,689 5,752 867

Net Charge-offs for Retail/Restaurant/Hospitality loans 561 26 178 130

* Excluding PPP loans

CAPITAL RATIOS

Common equity Tier 1 capital ratio 20.79 % 20.56 % 20.78 % 19.55 % 20.06 %

Tier 1 capital ratio 20.79 20.56 20.78 19.55 20.06

Total capital ratio 22.03 21.82 22.03 20.65 21.13

Tier 1 leverage ratio 11.86 11.65 11.25 12.49 12.60

Tangible common equity ratio 12.71 12.61 12.00 13.09 12.43

Equity/Assets ratio 15.39 15.33 15.30 15.73 14.85

Quarter Ended

2020 2019

NONINTEREST INCOME Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,

Trust fees $ 7,672 $ 7,461 $ 6,961 $ 7,437 $ 7,344

Service charges on deposits 5,330 5,009 4,318 5,915 5,861

ATM, interchange and credit card fees 8,376 8,644 8,049 7,400 7,943

Gain on sale and fees on mortgage loans 11,116 15,228 13,676 3,852 4,216

Net gain on sale of available-for-sale securities 23 36 1,512 2,062 5

Net gain (loss) on sale of foreclosed assets 87 19 52 1 81

Net gain (loss) on sale of assets 22 (2) (24) 116 78

Interest on loan recoveries 235 202 154 265 277

Other noninterest income 2,848 1,978 2,221 1,684 1,542

Total noninterest income $ 35,709 $ 38,575 $ 36,919 $ 28,732 $ 27,347

NONINTEREST EXPENSE

Salaries, commissions and employee benefits, excluding profit sharing $ 34,773 $ 32,104 $ 28,836 $ 28,670 $ 27,175

Cost related to termination of pension plan - - - - 1,700

Profit sharing expense 6,245 1,545 1,978 972 2,766

Net occupancy expense 3,067 3,193 3,101 3,027 2,784

Equipment expense 2,154 2,157 2,010 2,075 2,043

FDIC insurance premiums 663 587 463 45 -

ATM, interchange and credit card expenses 2,811 2,829 2,610 2,985 2,419

Legal, tax and professional fees 2,302 2,615 2,931 2,921 2,353

Audit fees 407 526 739 411 233

Printing, stationery and supplies 449 615 533 566 465

Amortization of intangible assets 483 490 508 509 238

Advertising and public relations 1,600 797 1,011 1,195 1,791

Operational and other losses 537 621 728 576 626

Software amortization and expense 2,563 2,265 2,010 2,024 2,158

Other noninterest expense 5,651 5,249 5,863 9,342 5,187

Total noninterest expense $ 63,705 $ 55,593 $ 53,321 $ 55,318 $ 51,938

TAX EQUIVALENT YIELD ADJUSTMENT $ 3,355 $ 3,170 $ 2,902 $ 1,834 $ 1,732

Year Ended

Dec. 31,

NONINTEREST INCOME 2020 2019

Trust fees $ 29,531 $ 28,401

Service charges on deposits 20,572 22,039

ATM, interchange and credit card fees 32,469 29,863

Gain on sale and fees on mortgage loans 43,872 18,144

Net gain (loss) on sale of available-for-sale securities 3,633 733

Net gain (loss) on sale of foreclosed assets 159 274

Net gain (loss) on sale of assets 112 319

Interest on loan recoveries 856 2,092

Other noninterest income 8,731 6,563

Total noninterest income $ 139,935 $ 108,428

NONINTEREST EXPENSE

Salaries, commissions and employee benefits, excluding profit sharing $ 124,383 $ 104,675

Cost related to termination of pension plan - 2,673

Profit sharing expense 10,740 7,661

Net occupancy expense 12,388 11,156

Equipment expense 8,396 9,052

FDIC insurance premiums 1,758 1,091

ATM, interchange and credit card expenses 11,235 9,856

Legal, tax and professional fees 10,769 9,082

Audit fees 2,083 1,445

Printing, stationery and supplies 2,163 1,812

Amortization of intangible assets 1,990 1,016

Advertising and public relations 4,603 6,813

Operational and other losses 2,462 1,879

Software amortization and expense 8,862 7,305

Other noninterest expense 26,106 21,005

Total noninterest expense $ 227,938 $ 196,521

TAX EQUIVALENT YIELD ADJUSTMENT $ 11,260 $ 6,791

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended Three Months Ended

Dec. 31, 2020 Sept. 30, 2020

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earning assets:

Federal funds sold $ - $ - - % $ 2,009 $ 3 0.51 %

Interest-bearing deposits in nonaffiliated banks 195,637 50 0.10 223,104 59 0.10

Taxable securities 2,086,419 10,708 2.05 2,187,547 12,063 2.21

Tax exempt securities 2,318,912 16,733 2.89 2,058,032 15,737 3.06

Loans 5,356,229 68,321 5.07 5,334,174 66,681 4.97

Total interest-earning assets 9,957,197 $ 95,812 3.83 % 9,804,866 $ 94,543 3.84 %

Noninterest-earning assets 674,229 671,374

Total assets $ 10,631,426 $ 10,476,240

Interest-bearing liabilities:

Deposits $ 5,479,873 $ 1,826 0.13 % $ 5,270,600 $ 2,064 0.16 %

Borrowings 428,117 94 0.09 482,555 99 0.08

Total interest-bearing liabilities 5,907,990 $ 1,920 0.13 % 5,753,155 $ 2,163 0.15 %

Noninterest-bearing 3,093,637 3,122,995liabilities

Shareholders' equity 1,629,799 1,600,090

Total liabilities and shareholders' equity $ 10,631,426 $ 10,476,240

Net interest income and margin (tax equivalent) $ 93,892 3.75 % $ 92,380 3.75 %

Three Months Ended Three Months Ended

June 30, 2020 Mar. 31, 2020

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earning assets:

Federal funds sold $ 840 $ 1 0.51 % $ 2,712 $ 10 1.50 %

Interest-bearing deposits in nonaffiliated banks 352,628 86 0.10 220,906 745 1.36

Taxable securities 2,399,364 14,030 2.34 2,263,329 14,655 2.59

Tax exempt securities 1,800,339 14,733 3.27 1,346,842 11,200 3.33

Loans 5,248,052 66,249 5.08 4,667,436 63,323 5.46

Total interest-earning assets 9,801,223 $ 95,099 3.90 % 8,501,225 $ 89,933 4.25 %

Noninterest-earning assets 663,595 692,432

Total assets $ 10,464,818 $ 9,193,657

Interest-bearing liabilities:

Deposits $ 5,135,772 $ 2,550 0.20 % $ 4,904,087 $ 6,680 0.55 %

Borrowings 877,076 412 0.19 460,605 517 0.45

Total interest-bearing liabilities 6,012,848 $ 2,962 0.20 % 5,364,692 $ 7,197 0.54 %

Noninterest-bearing 2,915,461 2,348,485liabilities

Shareholders' equity 1,536,509 1,480,480

Total liabilities and shareholders' equity $ 10,464,818 $ 9,193,657

Net interest income and margin (tax equivalent) $ 92,137 3.78 % $ 82,736 3.91 %

Three Months Ended

Dec. 31, 2019

Average Tax Equivalent Yield /

Balance Interest Rate

Interest-earning assets:

Federal funds sold $ 1,198 $ 6 2.03 %

Interest-bearing deposits in nonaffiliated banks 54,841 218 1.58

Taxable securities 2,185,777 14,165 2.59

Tax exempt securities 1,243,487 10,695 3.44

Loans 4,185,716 58,771 5.57

Total interest-earning assets 7,671,019 $ 83,855 4.34 %

Noninterest-earning assets 500,924

Total assets $ 8,171,943

Interest-bearing liabilities:

Deposits $ 4,336,063 $ 6,052 0.55 %

Borrowings 417,316 749 0.71

Total interest-bearing liabilities 4,753,379 $ 6,801 0.57 %

Noninterest-bearing 2,207,508liabilities

Shareholders' equity 1,211,056

Total liabilities and shareholders' equity $ 8,171,943

Net interest income and margin (tax equivalent) $ 77,054 3.99 %

Year Ended Year Ended

Dec. 31, 2020 Dec. 31, 2019

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earning assets:

Federal funds sold $ 1,388 $ 14 0.99 % $ 3,622 $ 98 2.70 %

Interest-bearing deposits in nonaffiliated banks 249,698 939 0.38 80,808 1,794 2.22

Taxable securities 2,233,634 51,456 2.30 2,090,490 55,670 2.66

Tax exempt securities 1,882,711 58,403 3.10 1,192,908 42,664 3.58

Loans 5,152,531 264,576 5.13 4,074,667 225,757 5.54

Total interest-earning assets 9,519,962 $ 375,388 3.94 % 7,442,495 $ 325,983 4.38 %

Noninterest-earning assets 673,553 496,627

Total assets $ 10,193,515 $ 7,939,122

Interest-bearing liabilities:

Deposits $ 5,198,554 $ 13,119 0.25 % $ 4,208,666 $ 27,122 0.64 %

Borrowings 561,505 1,124 0.20 398,142 2,980 0.75

Total interest-bearing liabilities 5,760,059 $ 14,243 0.25 % 4,606,808 $ 30,102 0.65 %

Noninterest-bearing 2,871,446 2,185,747liabilities

Shareholders' equity 1,562,010 1,146,567

Total liabilities and shareholders' equity $ 10,193,515 $ 7,939,122

Net interest income and margin (tax equivalent) $ 361,145 3.79 % $ 295,881 3.98 %

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SOURCE First Financial Bankshares, Inc.