First Financial Bankshares (FFIN) 8-K Results of Operations and Financial Condition

Exhibit 99.1

For immediate release	For More Information:
	J. Bruce Hildebrand, Executive Vice President
	325.627.7155

FIRST FINANCIAL BANKSHARES ANNOUNCES
FOURTH QUARTER RESULTS
AND 23^RD YEAR OF CONSECUTIVE EARNINGS GROWTH

ABILENE, Texas, January 28, 2010 — First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the fourth quarter of 2009 of $12.54 million, down 3.8 percent compared with earnings of $13.04 million in the same quarter last year. For the year, net income increased 1.19 percent to $53.80 million in 2009 from $53.16 million the previous year, making 2009 the Company’s 23^rd consecutive year of earnings growth.

Basic earnings per share were $0.60 for the fourth quarter of 2009 compared with $0.63 a year ago. For the year, basic earnings per share were $2.58, compared with $2.56 in the previous year.

Net interest income for the fourth quarter of 2009 was $32.54 million compared with $32.65 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.74 percent for the fourth quarter of 2009 compared with 4.77 percent in the same period a year ago and 4.92 percent for the quarter ended September 30, 2009. The provision for loan losses was $4.37 million in the fourth quarter of 2009, up from $3.68 million in the same quarter last year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.46 percent at December 31, 2009, compared with 1.30 basis points at September 30, 2009, and 80 basis points at December 31, 2008.

Noninterest income in the fourth quarter of 2009 was $12.06 million compared with $11.40 million in the same quarter a year earlier. Trust fees increased to $2.51 million in the fourth quarter of 2009 compared with $2.21 million in the same quarter last year. Service charges on deposit accounts were $5.66 million compared with $5.59 million a year ago. Real estate mortgage fees increased to $732,000 from $518,000 in the same quarter last year. ATM and debit card fees increased to $2.48 million from $2.28 million a year ago.

Noninterest expense rose 5.1 percent in the fourth quarter of 2009 to $23.68 million from $22.53 million in the same quarter last year. FDIC insurance premiums were $819,000 during the fourth quarter, compared with $214,000 in the same quarter last year. The Company’s efficiency ratio in the fourth quarter of 2009 was 50.18 percent compared with 48.88 percent in the same quarter a year ago. Salaries and employee benefits increased to $13.05 million from $11.74 million a year ago primarily due to increased pension plan expense, which was frozen in 2003, and the opportunity to hire additional high quality and experienced bankers.

As previously noted, the Company reported its 23^rd consecutive year of earnings growth in 2009, with net income of $53.80 million in 2009 compared with $53.16 million the previous year. Net interest income increased 4.3 percent to $129.17 million from $123.90 million last year. Noninterest income decreased 1.73 percent from $49.45 million to $48.60 million primarily due to less usage of overdraft privilege and a $692,000 decline in income from student loan sales as the Company exited the student loan program. Noninterest expense was $94.00 million in 2009, up 2.6 percent from $91.59 million a year ago. Salaries and employee benefits increased to $49.49 million from $45.29 million a year ago. The largest increase in noninterest expenses was FDIC insurance premiums which increased $4.24 million over the prior year.

As of December 31, 2009, consolidated assets for the Company totaled $3.28 billion compared with $3.21 billion a year ago. Loans totaled $1.51 billion at quarter end, compared with loans of $1.57 billion a year ago. Total deposits were $2.68 billion as of December 31, 2009, compared with $2.58 billion a year earlier. Shareholders’ equity rose to $415.70 million as of December 31, 2009, compared with $368.78 million the prior year.

“We are extremely pleased to report another year of earnings growth, especially in light of the challenges of the national recession, low interest rates, higher loan loss provisions and a significant increase in FDIC insurance premiums,” said F. Scott Dueser, Chairman, President and Chief Executive Officer. “Throughout the year, our bank presidents did an exceptional job of managing their net interest margin, improving their efficiencies and minimizing credit losses. We continue to aggressively address our nonperforming assets and are committed to the highest performance and service for our shareholders and customers.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 48 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Albany, Clyde and Moran; First Financial Bank, N.A., Eastland, Ranger and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado and Midlothian; First Financial Bank, Hereford; First Financial Bank, N.A., Mineral Wells; First Financial Bank, N.A., San Angelo; First Financial Bank, N.A., Southlake, Bridgeport, Boyd, Decatur, Keller and Trophy Club; First Financial Bank, N.A., Stephenville, Granbury, Glen Rose and Acton; First Financial Bank, N.A., Sweetwater, Roby, Trent and Merkel; and First Financial Bank, N.A., Weatherford, Willow Park, Aledo and Brock. The Company also operates First Financial Trust & Asset Management Company, N.A., with six 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 Bankshares, please visit our Web site at http://www.ffin.com.

*****

Certain statements contained herein may be considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon the belief of the Company’s management, as well as assumptions made beyond information currently available to the Company’s management, and may be, but not necessarily are, identified by such words as “expect”, “plan”, “anticipate”, “target”, “forecast” and “goal”. Because such “forward-looking statements” are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations include competition from other financial institutions and financial holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses, and similar variables. Other key risks are described in the Company’s reports filed with the Securities and Exchange Commission, which may be obtained under “Investor Relations-Documents/Filings” on the Company’s Web site or by writing or calling the Company at 325.627.7155. Except as otherwise stated in this news announcement, the Company does not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.

FIRST FINANCIAL BANKSHARES, INC.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except share and per share data)

	December 31,
	2009			2008
ASSETS:
Cash and due from banks	$	139,917		$	137,570
Interest bearing deposits in banks		167,336			3,658
Fed funds sold		14,290			27,660
Investment securities		1,285,377			1,318,406
Loans		1,514,368			1,566,143
Allowance for loan losses		(27,612	)		(21,529	)
Net loans		1,486,756			1,544,614
Premises and equipment		64,363			65,675
Goodwill		62,112			62,112
Other intangible assets		1,040			1,891
Other assets		58,265			50,799
Total assets	$	3,279,456		$	3,212,385
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	836,323		$	797,077
Interest-bearing deposits		1,848,434			1,785,676
Total deposits		2,684,757			2,582,753
Short-term borrowings		146,094			235,598
Other liabilities		32,903			25,252
Shareholders’ equity		415,702			368,782
Total liabilities and shareholders’ equity	$	3,279,456		$	3,212,385

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009			2008			2009			2008
INCOME STATEMENTS
Interest income	$	36,417		$	39,239		$	146,445		$	159,154
Interest expense		3,872			6,593			17,274			35,259
Net interest income		32,545			32,646			129,171			123,895
Provision for loan losses		4,365			3,683			11,419			7,957
Net interest income after provision for loan losses		28,180			28,963			117,752			115,938
Noninterest income		12,061			11,395			48,598			49,453
Noninterest expense		23,675			22,532			94,000			91,587
Net income before income taxes		16,566			17,826			72,350			73,804
Income tax expense		4,025			4,787			18,553			20,640
Net income	$	12,541		$	13,039		$	53,797		$	53,164
PER COMMON SHARE DATA
Net income — basic	$	0.60		$	0.63		$	2.58		$	2.56
Net income — diluted		0.60			0.62			2.58			2.55
Cash dividends		0.34			0.34			1.36			1.34
Book value								19.96			17.73
Market value								54.23			55.21
Shares outstanding — end of period		20,826,431			20,799,198			20,826,431			20,799,198
Average outstanding shares — basic		20,823,913			20,794,783			20,813,590			20,787,243
Average outstanding shares — diluted		20,851,925			20,863,659			20,837,457			20,841,363
PERFORMANCE RATIOS
Return on average assets		1.56	%		1.64	%		1.72	%		1.74	%
Return on average equity		12.07			14.79			13.63			15.27
Net interest margin (tax equivalent)		4.74			4.77			4.80			4.67
Efficiency ratio		50.18			48.88			50.11			50.76

FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)

	Quarter Ended
	2009												2008
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	25,532		$	23,247		$	22,652		$	21,529		$	20,048
Loans charged off		(2,430	)		(1,662	)		(1,225	)		(893	)		(2,406	)
Loan recoveries		145			241			232			255			204
Net charge-offs		(2,285	)		(1,421	)		(993	)		(638	)		(2,202	)
Provision for loan losses		4,365			3,706			1,588			1,761			3,683
Balance at end of period	$	27,612		$	25,532		$	23,247		$	22,652		$	21,529
Allowance for loan losses / period-end loans		1.82	%		1.76	%		1.57	%		1.53	%		1.37	%
Allowance for loan losses / nonperforming loans		148.8			174.4			225.4			233.5			216.8
Net charge-offs / average loans (annualized)		0.62			0.38			0.27			0.17			0.56
NONPERFORMING ASSETS
Nonaccrual loans	$	18,540		$	14,585		$	10,242		$	9,606		$	9,893
Accruing loans 90 days past due		15			56			72			94			36
Total nonperforming loans		18,555			14,641			10,314			9,700			9,929
Foreclosed assets		3,533			4,367			3,755			4,415			2,602
Total nonperforming assets	$	22,088		$	19,008		$	14,069		$	14,115		$	12,531
As a % of loans and foreclosed assets		1.46	%		1.30	%		0.95	%		0.95	%		0.80	%
As a % of end of period total assets		0.67			0.62			0.46			0.45			0.39
CAPITAL RATIOS
Tier 1 Risk-based		17.73	%		18.12	%		17.36	%		16.80	%		15.89	%
Total Risk-based		18.99			19.37			18.61			18.05			17.04
Tier 1 Leverage		10.69			10.83			10.53			10.01			9.68
Equity to assets		12.68			13.51			12.64			12.22			11.48

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009			2008			2009			2008
NONINTEREST INCOME
Gain (loss) on sale of student loans, net	$	94		$	(42	)	$	983		$	1,675
Gain on securities transactions, net		206			346			1,851			1,052
Trust fees		2,513			2,211			9,083			9,441
Service charges on deposits		5,662			5,591			21,956			22,597
Real estate mortgage fees		732			518			2,909			2,536
Net gain (loss) on sale of foreclosed assets		(361	)		(111	)		(548	)		5
ATM and credit card fees		2,484			2,281			9,546			8,904
Other noninterest income		731			601			2,818			3,243
Total Noninterest Income	$	12,061		$	11,395		$	48,598		$	49,453
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	12,431		$	11,291		$	47,126		$	45,879
Profit sharing expense		621			449			2,360			3,406
Net occupancy expense		1,508			1,670			6,293			6,735
Equipment expense		1,915			1,941			7,743			7,547
Printing, stationery and supplies		486			458			1,892			1,891
ATM and credit card expenses		738			1,172			3,200			4,443
Audit fees		224			310			1,063			1,194
Legal, tax and professional fees		782			769			3,253			2,977
FDIC Insurance premiums		819			214			4,893			652
Correspondent bank service charges		193			300			1,032			1,169
Advertising and public relations		783			655			2,566			2,590
Amortization of intangible assets		199			287			851			1,204
Other noninterest expense		2,976			3,016			11,728			11,900
Total Noninterest Expense	$	23,675		$	22,532		$	94,000		$	91,587
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,575		$	2,060		$	9,832		$	7,087

FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)

	Three Months Ended
	December 31, 2009
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	21,507	$	7		0.13	%
Interest-bearing deposits in nonaffiliated banks		142,242		198		0.55	%
Taxable securities		852,384		9,013		4.23	%
Tax exempt securities		455,022		6,992		6.15	%
Loans		1,466,614		22,782		6.16	%
Total interest-earning assets		2,937,769		38,992		5.27	%
Noninterest-earning assets		243,379
Total assets	$	3,181,148
Interest-bearing liabilities:
Deposits	$	1,787,736	$	3,706		0.82	%
Fed funds purchased and other short term borrowings		159,052		166		0.41	%
Total interest-bearing liabilities		1,946,788		3,872		0.79	%
Noninterest-bearing liabilities		822,065
Shareholders’ equity		412,295
Total liabilities and shareholders’ equity	$	3,181,148
Net interest income and margin (tax equivalent)			$	35,120		4.74	%

	Year Ended
	December 31, 2009
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	33,527	$	74		0.22	%
Interest-bearing deposits in nonaffiliated banks		58,227		341		0.59	%
Taxable securities		874,331		37,115		4.24	%
Tax exempt securities		433,780		26,950		6.21	%
Loans		1,494,876		91,797		6.14	%
Total interest-earning assets		2,894,741		156,277		5.40	%
Noninterest-earning assets		230,811
Total assets	$	3,125,552
Interest-bearing liabilities:
Deposits	$	1,755,275	$	16,474		0.94	%
Fed funds purchased and other short term borrowings		183,228		800		0.44	%
Total interest-bearing liabilities		1,938,503		17,274		0.89	%
Noninterest-bearing liabilities		792,237
Shareholders’ equity		394,812
Total liabilities and shareholders’ equity	$	3,125,552
Net interest income and margin (tax equivalent)			$	139,003		4.80	%