FIRST FINANCIAL BANKSHARES INC (Form: 8-K, Received: 01/29/2021 06:07:27)

FIRST FINANCIAL BANKSHARES INC false 0000036029 0000036029 2021-01-28 2021-01-28

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 28, 2021

FIRST FINANCIAL BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas

0-7674

75-0944023

(State or other Jurisdiction

of Incorporation)

(Commission

File No.)

(IRS Employer

Identification No.)

400 Pine Street, Abilene, Texas 79601

(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 203.425)

☐	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 240.13 e-4 (c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, $0.01 par value

FFIN

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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, 2020 of First Financial Bankshares, Inc.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS


99.1		Press Release dated January 28, 2021

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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: January 28, 2021	By:	/S/ F. Scott Dueser
		F. SCOTT DUESER
		President and Chief Executive Officer

Exhibit 99.1

For immediate release

For More Information:

James R. Gordon, EVP & Chief Financial Officer

325.627.7155

FIRST FINANCIAL BANKSHARES ANNOUNCES FOURTH QUARTER 2020 EARNINGS

AND 34^TH YEAR OF CONSECUTIVE ANNUAL EARNINGS GROWTH

ABILENE, Texas, January 28, 2021 - 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 34^th 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 during the quarter and 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. At December 31, 2020, the Company’s net charge-offs 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 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
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
ASSETS
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
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
INCOME STATEMENTS
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,
	2020			2019
INCOME STATEMENTS
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
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
ALLOWANCE FOR LOAN LOSSES
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
	Dec. 31,			Sept. 30,			June 30,			Mar. 31,			Dec. 31,
NONINTEREST INCOME
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,
	2020		2019
NONINTEREST INCOME
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 Dec. 31, 2020							Three Months Ended Sept. 30, 2020
	Average Balance		Tax Equivalent Interest		Yield / Rate			Average Balance		Tax Equivalent Interest		Yield / 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 liabilities		3,093,637							3,122,995
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 June 30, 2020							Three Months Ended Mar. 31, 2020
	Average Balance		Tax Equivalent Interest		Yield / Rate			Average Balance		Tax Equivalent Interest		Yield / 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 liabilities		2,915,461							2,348,485
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 Balance		Tax Equivalent Interest		Yield / 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 liabilities		2,207,508
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 Dec. 31, 2020							Year Ended Dec. 31, 2019
	Average Balance		Tax Equivalent Interest		Yield / Rate			Average Balance		Tax Equivalent Interest		Yield / 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 liabilities		2,871,446							2,185,747
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	%