PR Newswire | Oct 22, 2020 04:05PM EDT

10/22 15:05 CDT

First Financial Bankshares Announces Earnings For Third Quarter 2020 ABILENE, Texas, Oct. 22, 2020

ABILENE, Texas, Oct. 22, 2020 /PRNewswire/ -- First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2020 of $52.86 million compared with earnings of $43.08 million for the third quarter of 2019, representing a 22.69 percent increase. Basic and diluted earnings per share were $0.37 for the third quarter of 2020 compared with $0.32 for the third quarter of 2019.

All amounts for the three and nine months ended September 30, 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 our results for the third quarter and year-to-date reflecting our TEXAS STRONG initiative to navigate through the pandemic. Throughout this time, we have kept our doors open to allow our customers to keep their doors open as well. Our approach has proven to be very positive since approximately one-third of the PPP loans were made to prospects and noncustomers who couldn't get them done through their own bank allowing us to grow considerably in loans and deposits as well as trust assets. I am extremely proud of the dedication, hard work and excellent customer service that our 1,450 associates have provided through this time by guiding our customers through the PPP loan process, bringing an unbelievable amount of new business to the Company, and executing a record number of mortgages, all of which has certainly helped our bottom line. As already proven, we are well positioned to navigate through this environment with strong reserves, liquidity, superior capital levels, and a team that doesn't allow pandemics or hurricanes to slow us down. We are optimistic about finishing the year strong and rolling right into 2021," said F. Scott Dueser, Chairman, President and CEO of First Financial Bankshares, Inc.

Net interest income for the third quarter of 2020 was $89.21 million, up $16.57 million from net interest income of $72.64 million for the third quarter of 2019. The net interest margin on a tax equivalent basis was 3.75 percent for the quarter compared to 3.94 percent a year ago. Net interest income was positively impacted by a $2.33 billion increase in average-earning assets to $9.80 billion at September 30, 2020, from both organic and acquired growth, partially offset by a 52 basis point decline in the yield on interest-earning assets to 3.84 percent for the quarter; and $1.85 million in accretion from acquired loans this quarter compared to $415 thousand in the same quarter last year. Partially offsetting these amounts was a $5.79 million, or 54 basis points, decrease in funding costs on interest-bearing liabilities from the same quarter a year ago.

During the third and second quarters of 2020, the Company recognized $2.83 million each quarter in deferred net loan fees on Paycheck Protection Program ('PPP") loans. PPP loans totaled $703.73 million at September 30, 2020 ($703.48 million and $430.84 million in average balances for the third quarter and year-to-date, respectively). The remainder of the PPP net deferred loan fees totaled $15.97 million at September 30, 2020 and continues to be amortized over the shorter of the repayment period or the contractual life of 24 months.

Accounting Standards Update (ASU) 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("CECL"), became effective for the Company on January 1, 2020. However, the pandemic-related legislation included an option for entities to delay the implementation of CECL until the earlier of the termination date of the national emergency declaration by the President, or December 31, 2020. The Company elected to delay implementation of CECL and has calculated and recorded the provision for credit losses for the quarter and year-to-date under the incurred loss model that existed prior to CECL. The Company is prepared to adopt CECL during the fourth quarter, retroactively effective as of January 1, 2020, which will likely require adjusting previously reported provisions for credit losses in the previous quarters of 2020.

The provision for credit losses was $9.00 million in the third quarter of 2020, including $1.50 million related to the provision for unfunded commitments, compared with $450 thousand in the third quarter of 2019. During the third quarter of 2020, net charge-offs totaled $409 thousand compared to $381 thousand in the third quarter of 2019. The Company's provision for credit losses in the third quarter of 2020 continues to reflect uncertainty surrounding the economic impact caused by the pandemic and the decline in oil and gas prices. At September 30, 2020, the allowance for loan losses totaled $76.04 million, or 1.44 percent of loans held-for-investment ("loans" hereafter), or 1.66 percent of loans excluding PPP loans, compared to $51.89 million at September 30, 2019, or 1.27 percent of loans. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.81 percent at September 30, 2020, compared with 0.66 percent at September 30, 2019. Classified loans totaled $202.04 million at September 30, 2020, compared to $119.20 million at September 30, 2019.

In mid-March of 2020, the Company began offering deferral and extensions of principle and/or interest payments to selected borrowers on a case-by-case basis. During the third quarter, we provided new or extended existing customers deferrals and extensions on a case-by-case basis considering the current and projected profile of the borrower. At September 30, 2020, the Company had approximately 122 loans totaling $18.65 million in outstanding loans subject to deferral and extension agreements, representing 0.41 percent of outstanding loans, excluding PPP loans compared to 2,200 loans totaling $468.54 million, or 10.30 percent of outstanding loans, excluding PPP loans, at June 30, 2020.

At September 30, 2020, loans with oil and gas industry exposure, excluding PPP loans, totaled $118.57 million, or 2.58 percent of outstanding loans, excluding PPP loans. These loans comprised $26.82 million of classified loans including $6.80 million in nonaccrual loans. At September 30, 2020, the Company's allowance for loan loss specific reserves on its oil and gas loan portfolio totaled 8.01 percent of total oil and gas loans, excluding PPP loans, and had net charge-offs totaling $801 thousand for the nine months ended September 30, 2020, respectively. There were no charge-offs associated with oil and gas loans during the third quarter of 2020.

In addition, at September 30, 2020, loans in the retail/restaurant/hospitality industries, excluding PPP loans, totaled $359.02 million or 7.82 percent of the Company's outstanding loans, excluding PPP loans. These loans comprised $28.17 million of classified loans including $5.69 million in nonaccrual loans. Net charge-offs related to this portfolio totaled $26 thousand and $334 thousand for the three and nine months ended September 30, 2020, respectively.

Noninterest income in the third quarter of 2020 rose to $38.58 million from $28.67 million for the third quarter of 2019, as a result of the following:

* Trust fees increased to $7.46 million in the third quarter of 2020 from $7.05 million in the third quarter of 2019. The fair value of trust assets managed increased to $6.95 billion, up 9.36 percent at September 30, 2020 from $6.36 billion at September 30, 2019. * Service charges on deposits were $5.01 million in the third quarter of 2020 compared with $5.63 million in the third quarter of 2019. The decline in service charge revenue in 2020 when compared to 2019 has primarily been driven by lower overdraft fees in the current year related to the effects of the pandemic and related stimulus programs, although service charge income increased $691 thousand in the third quarter over the second quarter of 2020. * ATM, interchange and credit card fees increased to $8.64 million in the third quarter of 2020 from $7.73 million in the third quarter of 2019, driven by continued growth in the number of debit cards issued as well as our Bryan/College Station acquisition. * Mortgage income increased to $15.23 million compared with $5.73 million in the third quarter of 2019 due to a significant increase in the volume of loans originated driven by the lower rate environment and the strong housing market in Texas. The Company's mortgage pipeline increased to $235.63 million as of September 30, 2020, when compared to $62.79 million at September 30, 2019.

Noninterest expense for the third quarter of 2020 totaled $55.59 million compared to $48.91 million in the third quarter of 2019, as a result of the following:

* Salary, commissions and employee benefit costs totaled $33.65 million for the third quarter of 2020, compared to $28.55 million in the third quarter of 2019. The increase over the prior year was primarily driven by the Bryan/College Station acquisition, annual merit-based pay increases and higher mortgage related commissions and incentives. The $2.84 million increase in the third quarter of 2020 when compared to the second quarter of 2020 primarily resulted from the $3.62 million one-time deferral of salaries related to PPP loans in the second quarter of 2020 and a $1.30 million increase in mortgage related commissions and incentives partially offset by a decrease in other employee costs. * Noninterest expense in the second quarter of 2020 included conversion related costs totaling $583 thousand as a result of the Bryan/College Station acquisition, while no significant conversion related costs were incurred in the third quarters of 2020 and 2019.

The Company's efficiency ratio in the third quarter of 2020 was 42.45 percent compared with 47.54 percent in the third quarter of 2019.

As of September 30, 2020, consolidated assets for the Company totaled $10.57 billion compared to $8.11 billion at September 30, 2019. Loans totaled $5.29 billion at September 30, 2020, compared with loans of $4.10 billion at September 30, 2019, representing approximately 29 percent growth driven by the Bryan/College Station acquisition, PPP loans and organic growth. Deposits totaled $8.29 billion at September 30, 2020, compared to $6.40 billion at September 30, 2019, representing approximately 30 percent growth driven by organic growth and the acquisition. Noninterest-bearing deposits increased to 35.6 percent of total deposits at September 30, 2020 compared to 34.6 percent at September 30, 2019.

Shareholders' equity rose to $1.62 billion as of September 30, 2020, compared to $1.21 billion at September 30, 2019, primarily from the Bryan/College Station acquisition, undistributed earnings and the net increase in the net unrealized gain on investment securities. At September 30, 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.

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

Cash and due from $ 175,088 $ 188,373 $ 191,486 $ 231,534 $ 198,855banks

Interest-bearing 58,933 196,426 76,378 47,920 31,410deposits in banks

Federal funds sold - - - 3,150 -

Investment securities 4,431,280 4,118,863 4,107,069 3,413,317 3,397,156

Loans, 5,293,679 5,253,067 4,639,389 4,194,969 4,100,316held-for-investment

Allowance for loan (76,038) (68,947) (60,440) (52,499) (51,889)losses

Net loans, 5,217,641 5,184,120 4,578,949 4,142,470 4,048,427held-for-investment

Loans, held-for-sale 101,055 66,370 42,034 28,228 40,499

Premises and 141,002 138,933 139,554 131,022 132,367equipment, net

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

Other intangible 5,394 5,884 6,392 2,102 2,340assets

Other assets 123,778 127,367 246,387 90,919 91,220

Total assets $ 10,567,652 $ 10,339,817 $ 9,701,091 $ 8,262,227 $ 8,113,839

LIABILITIES ANDSHAREHOLDERS' EQUITY

Noninterest-bearing $ 2,950,407 $ 2,941,679 $ 2,288,597 $ 2,065,128 $ 2,210,997deposits

Interest-bearing 5,344,481 5,215,963 4,921,869 4,538,678 4,186,686deposits

Total deposits 8,294,888 8,157,642 7,210,466 6,603,806 6,397,683

Borrowings 503,163 449,224 857,871 381,356 400,155

Other liabilities 150,100 150,502 106,392 49,868 110,903

Shareholders' equity 1,619,501 1,582,449 1,526,362 1,227,197 1,205,098

Total liabilities and $ 10,567,652 $ 10,339,817 $ 9,701,091 $ 8,262,227 $ 8,113,839shareholders' equity

Quarter Ended

2020 2019

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

Interest income $ 91,373 $ 92,197 $ 88,100 $ 82,123 $ 80,591

Interest expense 2,163 2,962 7,198 6,801 7,953

Net interest income 89,210 89,235 80,902 75,322 72,638

Provision for loan 7,500 8,700 9,850 950 450losses

Provision for 1,500 - - - -unfunded commitments

Net interest incomeafter provisions for 80,210 80,535 71,052 74,372 72,188credit losses

Noninterest income 38,575 36,919 28,732 27,347 28,669

Noninterest expense 55,593 53,321 55,318 51,938 48,910

Net income before 63,192 64,133 44,466 49,781 51,947income taxes

Income tax expense 10,335 10,663 7,234 8,393 8,867

Net income $ 52,857 $ 53,470 $ 37,232 $ 41,388 $ 43,080

PER COMMON SHAREDATA

Net income - basic $ 0.37 $ 0.38 $ 0.26 $ 0.30 $ 0.32

Net income - diluted 0.37 0.38 0.26 0.30 0.32

Cash dividends 0.13 0.13 0.12 0.12 0.12declared

Book value 11.40 11.14 10.73 9.03 8.87

Tangible book value 9.15 8.89 8.48 7.75 7.59

Market value $ 27.91 $ 28.89 $ 26.84 $ 35.10 $ 33.33

Shares outstanding - 142,121,595 142,035,396 142,314,930 135,891,755 135,822,456end of period

Average outstanding 141,980,707 141,973,522 142,118,864 135,747,381 135,693,901shares - basic

Average outstanding 142,529,242 142,454,083 142,735,208 136,539,286 136,369,328shares - diluted

PERFORMANCE RATIOS

Return on average 2.01 % 2.06 % 1.63 % 2.01 % 2.15 %assets

Return on average 13.14 14.00 10.11 13.56 14.46equity

Return on average 16.41 17.67 12.89 15.83 16.96tangible equity

Net interest margin 3.75 3.78 3.91 3.99 3.94(tax equivalent)

Efficiency ratio 42.45 41.32 49.63 49.75 47.54

Nine Months Ended

Sept. 30,

INCOME STATEMENTS 2020 2019

Interest income $ 271,671 $ 237,069

Interest expense 12,323 23,301

Net interest income 259,348 213,768

Provision for loan 26,050 2,015losses

Provision for 1,500 -unfunded commitments

Net interest incomeafter provisions for 231,798 211,753credit losses

Noninterest income 104,226 81,081

Noninterest expense 164,233 144,583

Net income before 171,791 148,251income taxes

Income tax expense 28,233 24,827

Net income $ 143,558 $ 123,424

PER COMMON SHAREDATA

Net income - basic $ 1.01 $ 0.91

Net income - diluted 1.01 0.91

Cash dividends 0.38 0.35declared

Book value 11.40 8.87

Tangible book value 9.15 7.59

Market value $ 27.91 $ 33.33

Shares outstanding - 142,121,595 135,822,456end of period

Average outstanding 142,023,930 135,613,646shares - basic

Average outstanding 142,519,448 136,274,342shares - diluted

PERFORMANCE RATIOS

Return on average 1.91 % 2.10 %assets

Return on average 12.46 14.67equity

Return on average 15.71 17.36tangible equity

Net interest margin 3.81 3.97(tax equivalent)

Efficiency ratio 44.21 48.21

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Quarter Ended

2020 2019

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

Balance at beginning $ 68,947 $ 60,440 $ 52,499 $ 51,889 $ 51,820of period

Loans charged off (853) (894) (2,227) (834) (767)

Loan recoveries 444 701 318 494 386

Net recoveries (409) (193) (1,909) (340) (381)(charge-offs)

Provision for loan 7,500 8,700 9,850 950 450losses

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

Allowance for loanlosses / period-end 1.44 % 1.31 % 1.30 % 1.25 % 1.27 %loansheld-for-investment

Allowance for loanlosses / nonperforming 177.99 174.83 153.16 212.02 200.75loans

Net charge-offs /average total loans 0.03 0.01 0.16 0.03 0.04(annualized)

SUMMARY OF LOANCLASSIFICATION

Special Mention $ 66,033 $ 63,489 $ 87,099 $ 63,371 $ 46,300

Substandard 136,010 137,408 103,249 77,284 72,904

Doubtful - - - - -

Total classified loans $ 202,043 $ 200,897 $ 190,348 $ 140,655 $ 119,204

NONPERFORMING ASSETS

Nonaccrual loans $ 42,673 $ 39,320 $ 39,226 $ 24,582 $ 25,717

Accruing troubled debt 25 25 26 26 27restructured loans

Accruing loans 90 days 23 92 209 153 104past due

Total nonperforming 42,721 39,437 39,461 24,761 25,848loans

Foreclosed assets 331 287 983 1,009 1,364

Total nonperforming $ 43,052 $ 39,724 $ 40,444 $ 25,770 $ 27,212assets

As a % of loansheld-for-investment 0.81 % 0.76 % 0.87 % 0.61 % 0.66 %and foreclosed assets

As a % of end of 0.41 0.38 0.42 0.31 0.34period total assets

OIL AND GAS PORTFOLIOINFORMATION *

Oil and gas loans $ 118,567 $ 128,143 $ 117,223 $ 119,789 $ 122,908

Oil and gas loans as a% of total loans 2.58 % 2.82 % 2.53 % 2.86 % 3.00 %held-for-investment

Classified oil and gas 26,823 28,366 22,032 7,041 7,953loans

Nonaccrual oil and gas 6,800 3,702 3,477 481 519loans

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

Allowance for oil andgas loans as a % of 8.01 % 4.17 % 4.46 % 2.54 % 2.87 %oil and gas loans

* ExcludingPPP loans

RETAIL/RESTAURANT/HOSPITALITY PORTFOLIOINFORMATION *

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

Restaurant loans 39,523 46,418 25,570

Hotel loans 63,273 51,957 46,690

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

Travel loans 801 908 937

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

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

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

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

Net Charge-offs forRetail/Restaurant/ 26 178 130Hospitality loans

* ExcludingPPP loans

CAPITAL RATIOS

Common equity Tier 1 20.56 % 20.78 % 19.55 % 20.06 % 20.05 %capital ratio

Tier 1 capital ratio 20.56 20.78 19.55 20.06 20.05

Total capital ratio 21.82 22.03 20.65 21.13 21.14

Tier 1 leverage ratio 11.65 11.25 12.49 12.60 12.58

Tangible common equity 12.61 12.00 13.09 12.43 12.94ratio

Equity/Assets ratio 15.33 15.30 15.73 14.85 14.85

Quarter Ended

2020 2019

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

Trust fees $ 7,461 $ 6,961 $ 7,437 $ 7,344 $ 7,051

Service charges on 5,009 4,318 5,915 5,861 5,629deposits

ATM, interchange and 8,644 8,049 7,400 7,943 7,728credit card fees

Gain on sale and fees 15,228 13,676 3,852 4,216 5,733on mortgage loans

Net gain on sale ofavailable-for-sale 36 1,512 2,062 5 52securities

Net gain (loss) onsale of foreclosed 19 52 1 81 71assets

Net gain (loss) on (2) (24) 116 78 235sale of assets

Interest on loan 202 154 265 277 575recoveries

Other noninterest 1,978 2,221 1,684 1,542 1,595income

Total noninterest $ 38,575 $ 36,919 $ 28,732 $ 27,347 $ 28,669income

NONINTEREST EXPENSE

Salaries, commissionsand employee benefits, $ 32,104 $ 28,836 $ 28,670 $ 27,175 $ 27,030excluding profitsharing

Cost related totermination of pension - - - 1,700 -plan

Profit sharing expense 1,545 1,978 972 2,766 1,520

Net occupancy expense 3,193 3,101 3,027 2,784 2,830

Equipment expense 2,157 2,010 2,075 2,043 2,225

FDIC insurance 587 463 45 - 15premiums

ATM, interchange and 2,829 2,610 2,985 2,419 2,627credit card expenses

Legal, tax and 2,615 2,931 2,921 2,353 2,274professional fees

Audit fees 526 739 411 233 341

Printing, stationery 615 533 566 465 480and supplies

Amortization of 490 508 509 238 246intangible assets

Advertising and public 797 1,011 1,195 1,791 1,745relations

Operational and other 621 728 576 626 507losses

Software amortization 2,265 2,010 2,024 2,158 1,767and expense

Other noninterest 5,249 5,863 9,342 5,187 5,303expense

Total noninterest $ 55,593 $ 53,321 $ 55,318 $ 51,938 $ 48,910expense

TAX EQUIVALENT YIELD $ 3,170 $ 2,902 $ 1,834 $ 1,732 $ 1,575ADJUSTMENT

Nine Months Ended

Sept. 30,

NONINTEREST INCOME 2020 2019

Trust fees $ 21,859 $ 21,057

Service charges on 15,242 16,179deposits

ATM, interchange and 24,093 21,920credit card fees

Gain on sale and fees 32,756 13,928on mortgage loans

Net gain (loss) onsale of 3,610 728available-for-salesecurities

Net gain (loss) onsale of foreclosed 72 193assets

Net gain (loss) on 90 241sale of assets

Interest on loan 621 1,815recoveries

Other noninterest 5,883 5,020income

Total noninterest $ 104,226 $ 81,081income

NONINTEREST EXPENSE

Salaries, commissionsand employee benefits, $ 89,610 $ 77,573excluding profitsharing

Cost related totermination of pension - 900plan

Profit sharing expense 4,495 4,895

Net occupancy expense 9,321 8,372

Equipment expense 6,242 7,009

FDIC insurance 1,095 1,091premiums

ATM, interchange and 8,424 7,437credit card expenses

Legal, tax and 8,467 6,729professional fees

Audit fees 1,676 1,212

Printing, stationery 1,714 1,348and supplies

Amortization of 1,507 778intangible assets

Advertising and public 3,003 5,022relations

Operational and other 1,925 1,253losses

Software amortization 6,299 5,147and expense

Other noninterest 20,455 15,817expense

Total noninterest $ 164,233 $ 144,583expense

TAX EQUIVALENT YIELD $ 7,905 $ 5,058ADJUSTMENT

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

Three Months Ended Three Months Ended

Sept. 30, 2020 June 30, 2020

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earningassets:

Federal funds $ 2,009 $ 3 0.51 % $ 840 $ 1 0.51 %sold

Interest-bearingdeposits in 223,104 59 0.10 352,628 86 0.10nonaffiliated banks

Taxable 2,187,547 12,063 2.21 2,399,364 14,030 2.34securities

Tax exempt 2,058,032 15,737 3.06 1,800,339 14,733 3.27securities

Loans 5,334,174 66,681 4.97 5,248,052 66,249 5.08

Totalinterest-earning 9,804,866 $ 94,543 3.84 % 9,801,223 $ 95,099 3.90 %assets

Noninterest-earning 671,374 663,595assets

Total assets $ 10,476,240 $ 10,464,818

Interest-bearingliabilities:

Deposits $ 5,270,600 $ 2,064 0.16 % $ 5,135,772 $ 2,550 0.20 %

Borrowings 482,555 99 0.08 877,076 412 0.19

Totalinterest-bearing 5,753,155 $ 2,163 0.15 % 6,012,848 $ 2,962 0.20 %liabilities

Noninterest-bearing 3,122,995 2,915,461liabilities

Shareholders' 1,600,090 1,536,509equity

Total liabilitiesand shareholders' $ 10,476,240 $ 10,464,818equity

Net interest incomeand margin (tax $ 92,380 3.75 % $ 92,137 3.78 %equivalent)

Three Months Ended Three Months Ended

Mar. 31 2020 Dec. 31, 2019

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earningassets:

Federal funds $ 2,712 $ 10 1.50 % $ 1,198 $ 6 2.03 %sold

Interest-bearingdeposits in 220,906 745 1.36 54,841 218 1.58nonaffiliated banks

Taxable 2,263,329 14,655 2.59 2,185,777 14,165 2.59securities

Tax exempt 1,346,842 11,200 3.33 1,243,487 10,695 3.44securities

Loans 4,667,436 63,323 5.46 4,185,716 58,771 5.57

Totalinterest-earning 8,501,225 $ 89,933 4.25 % 7,671,019 $ 83,855 4.34 %assets

Noninterest-earning 692,432 500,924assets

Total assets $ 9,193,657 $ 8,171,943

Interest-bearingliabilities:

Deposits $ 4,904,087 $ 6,680 0.55 % $ 4,336,063 $ 6,052 0.55 %

Borrowings 460,605 517 0.45 417,316 749 0.71

Totalinterest-bearing 5,364,692 $ 7,197 0.54 % 4,753,379 $ 6,801 0.57 %liabilities

Noninterest-bearing 2,348,485 2,207,508liabilities

Shareholders' 1,480,480 1,211,056equity

Total liabilitiesand shareholders' $ 9,193,657 $ 8,171,943equity

Net interest incomeand margin (tax $ 82,736 3.91 % $ 77,054 3.99 %equivalent)

Three Months Ended

Sept. 30, 2019

Average Tax Equivalent Yield /

Balance Interest Rate

Interest-earningassets:

Federal funds $ 3,006 $ 19 2.52 %sold

Interest-bearingdeposits in 61,465 363 2.34nonaffiliated banks

Taxable 2,183,930 14,292 2.62securities

Tax exempt 1,132,279 10,075 3.56securities

Loans 4,094,235 57,417 5.56

Totalinterest-earning 7,474,915 $ 82,166 4.36 %assets

Noninterest-earning 489,446assets

Total assets $ 7,964,361

Interest-bearingliabilities:

Deposits $ 4,156,850 $ 7,123 0.68 %

Borrowings 388,235 830 0.85

Totalinterest-bearing 4,545,085 $ 7,953 0.69 %liabilities

Noninterest-bearing 2,237,462liabilities

Shareholders' 1,181,814equity

Total liabilitiesand shareholders' $ 7,964,361equity

Net interest incomeand margin (tax $ 74,213 3.94 %equivalent)

Nine Months Ended Nine Months Ended

Sept. 30, 2020 Sept. 30, 2019

Average Tax Equivalent Yield / Average Tax Equivalent Yield /

Balance Interest Rate Balance Interest Rate

Interest-earningassets:

Federal funds $ 1,854 $ 14 0.99 % $ 4,438 $ 92 2.76 %sold

Interest-bearingdeposits in 267,850 889 0.44 89,559 1,575 2.35nonaffiliated banks

Taxable 2,283,064 40,748 2.38 2,058,380 41,505 2.69securities

Tax exempt 1,736,250 41,670 3.20 1,175,863 31,968 3.62securities

Loans 5,084,136 196,255 5.16 4,037,243 166,987 5.53

Totalinterest-earning 9,373,154 $ 279,576 3.98 % 7,365,483 $ 242,127 4.40 %assets

Noninterest-earning 673,325 495,179assets

Total assets $ 10,046,479 $ 7,860,662

Interest-bearingliabilities:

Deposits $ 5,104,096 $ 11,293 0.30 % $ 4,165,735 $ 21,071 0.68 %

Borrowings 606,291 1,030 0.23 391,680 2,230 0.76

Totalinterest-bearing 5,710,387 $ 12,323 0.29 % 4,557,415 $ 23,301 0.68 %liabilities

Noninterest-bearing 2,796,843 2,178,412liabilities

Shareholders' 1,539,249 1,124,835equity

Total liabilitiesand shareholders' $ 10,046,479 $ 7,860,662equity

Net interest incomeand margin (tax $ 267,253 3.81 % $ 218,826 3.97 %equivalent)

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SOURCE First Financial Bankshares, Inc.