First Financial Bankshares (FFIN) 8-K First Financial Bankshares Announces Third Quarter Earnings Results

Exhibit 99.1

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

FIRST FINANCIAL BANKSHARES ANNOUNCES
THIRD QUARTER EARNINGS RESULTS

ABILENE, Texas, October 21, 2010 — First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2010 of $16.23 million compared with earnings of $13.99 million in the same quarter last year. Basic earnings per share were $0.78 for the third quarter of 2010 compared with $0.67 in the third quarter of 2009. Third quarter 2010 earnings included net proceeds after income tax of $1.30 million from the expropriation of company-owned property in Southlake, Texas, by the Texas Department of Transportation. Excluding this extraordinary item, net income would have been $14.93 million in the third quarter of 2010, a 6.77 per cent increase over the 2009 third quarter, or $0.72 per share.

Net interest income for the third quarter of 2010 increased 4.1 percent to $33.91 million compared with $32.58 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.67 percent for the third quarter of 2010 compared with 4.92 percent in the same period a year ago and 4.69 percent in the second quarter of 2010.

The provision for loan losses was $1.99 million in the third quarter of 2010, down from $3.71 million in the same quarter last year and $2.97 million in the quarter ended June 30, 2010. Nonperforming assets as a percentage of loans and foreclosed assets held steady at 1.45 percent at September 30, 2010, compared with 1.48 percent at June 30, 2010. The decrease in the provision for loan losses reflects stability in the level of nonperforming assets and a decrease in net charge-offs.

Noninterest income in the third quarter of 2010 was $12.93 million compared with $12.88 million in the same quarter a year earlier. Trust fees increased to $2.71 million in the third quarter of 2010 compared with $2.33 million in the same quarter last year. Real estate mortgage fees increased $423,000 in the third quarter of 2010 over the same period in 2009 due to refinancing activity as a result of the favorable rate environment. Service charges on deposit accounts decreased to $5.10 million during the third quarter of 2010 compared with $5.73 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services and changes in overdraft regulations.

Noninterest expense increased in the third quarter of 2010 to $24.71 million from $23.02 million in the same quarter last year, primarily from a $459,000 increase in profit sharing expense, a $262,000 increase in other real estate expenses and a $226,000 increase in legal, tax and professional expense, mostly related to the acquisition of First State Bank, Huntsville, Texas, announced on September 9, 2010. The Company’s efficiency ratio in the third quarter of 2010 was 47.92 percent, unchanged from the same quarter a year ago. The 2010 ratio includes the income from the extraordinary item.

For the first nine months of 2010, net income increased 7.0 percent to $44.14 million from $41.26 million a year ago. Basic earnings per share rose to $2.12 in the first nine months of 2010 from $1.98 in the same period last year. Excluding the extraordinary item during the third quarter of 2010 described above, net income would have been $42.85 million for the nine months ended September 30, 2010, a 3.86 per cent increase over the 2010 nine month-period, or $2.06 per share. Net interest income increased 3.51 percent in the first nine months of 2010 to $100.02 million from $96.63 million a year ago. The provision for loan losses totaled $6.97 million compared to $7.05 million in the first nine months of 2009. Noninterest income was $36.61 million compared with $36.54 million in the same period a year ago. Noninterest expense was $72.00 million in the first nine months of 2010 compared with $70.33 million a year ago.

As of September 30, 2010, consolidated assets for the Company increased 12.07 percent to $3.45 billion compared with $3.08 billion a year ago. Loans totaled $1.54 billion at quarter end compared with loans of $1.45 billion a year ago. Total deposits were $2.74 billion as of September 30, 2010, compared with $2.46 billion a year earlier. Shareholders’ equity rose to $450.93 million as of September 30, 2010, compared with $415.53 million the prior year.

“This was another excellent quarter for us, even after adjusting for the extraordinary item related to the state government’s expropriation of a portion of our land in Southlake,” said F. Scott Dueser, Chairman, President and CEO. “Our bank presidents continue to do an excellent job of managing their banks and their net interest margins, despite the sluggish economy, increased government regulation and low interest rates. We remain committed to successfully managing our credit quality and expenses, while seeking the highest customer service levels for our customers and shareholders.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 51 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Albany, Clyde, Moran and Odessa; First Financial Bank, N.A., Eastland, Ranger and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado, Midlothian and Crowley; 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, Brock and Fort Worth. 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 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; 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)

	September 30,
	2010			2009
ASSETS:
Cash and due from banks	$	91,492		$	89,326
Interest-bearing deposits at banks		231,532			23,884
Fed funds sold		6,135			38,045
Investment securities		1,421,402			1,323,451
Loans		1,537,708			1,454,397
Allowance for loan losses		(30,013	)		(25,532	)
Net loans		1,507,695			1,428,865
Premises and equipment		67,387			63,659
Goodwill		62,112			62,112
Other intangible assets		578			1,239
Other assets		59,150			45,612
Total assets	$	3,447,483		$	3,076,193
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	781,228		$	719,266
Interest-bearing deposits		1,957,417			1,739,637
Total deposits		2,738,645			2,458,903
Short-term borrowings		178,097			160,401
Other liabilities		79,810			41,355
Shareholders’ equity		450,931			415,534
Total liabilities and shareholders’ equity	$	3,447,483		$	3,076,193

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2010			2009			2010			2009
INCOME STATEMENTS
Interest income	$	37,259		$	36,598		$	110,658		$	110,028
Interest expense		3,345			4,015			10,641			13,401
Net interest income		33,914			32,583			100,017			96,627
Provision for loan losses		1,988			3,706			6,971			7,054
Net interest income after provision for loan losses		31,926			28,877			93,046			89,573
Noninterest income		12,926			12,879			36,608			36,536
Noninterest expense		24,706			23,018			71,995			70,325
Net income before income taxes and extraordinary item		20,146			18,738			57,659			55,784
Income tax expense		5,213			4,752			14,811			14,528
Net income before extraordinary item	$	14,933		$	13,986		$	42,848		$	41,256
Extraordinary item — expropriation of property, net of income tax		1,296			—			1,296			—
Net income		16,229			13,986			44,144			41,256
PER COMMON SHARE DATA
Net income before extraordinary item — basic	$	0.72		$	0.67		$	2.06		$	1.98
Net income before extraordinary item — diluted		0.72			0.67			2.05			1.98
Net income — basic		0.78			0.67			2.12			1.98
Net income — diluted		0.78			0.67			2.12			1.98
Cash dividends		0.34			0.34			1.02			1.02
Book value								21.63			19.96
Market value								46.99			49.46
Shares outstanding — end of period		20,852,152			20,822,396			20,852,152			20,822,396
Average outstanding shares — basic		20,849,902			20,819,398			20,844,258			20,810,112
Average outstanding shares — diluted		20,854,489			20,844,567			20,863,935			20,830,932
PERFORMANCE RATIOS
Return on average assets		1.91	%		1.81	%		1.77	%		1.78	%
Return on average equity		14.62			13.99			13.78			14.18
Net interest margin (tax equivalent)		4.67			4.92			4.68			4.85
Efficiency ratio		47.92			47.92			49.12			50.08

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

	Quarter Ended
	2010									2009
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	28,954		$	28,750		$	27,612		$	25,532		$	23,247
Loans charged off		(1,178	)		(2,970	)		(1,059	)		(2,430	)		(1,662	)
Loan recoveries		249			201			187			145			241
Net charge-offs		(929	)		(2,769	)		(872	)		(2,285	)		(1,421	)
Provision for loan losses		1,988			2,973			2,010			4,365			3,706
Balance at end of period	$	30,013		$	28,954		$	28,750		$	27,612		$	25,532
Allowance for loan losses / period-end loans		1.95	%		1.91	%		1.92	%		1.82	%		1.76	%
Allowance for loan losses / nonperforming loans		211.7			203.3			159.1			148.8			174.4
Net charge-offs / average loans (annualized)		0.24			0.73			0.24			0.62			0.38
NONPERFORMING ASSETS
Nonaccrual loans	$	14,110		$	14,240		$	17,775		$	18,540		$	14,585
Accruing loans 90 days past due		69			1			290			15			56
Total nonperforming loans		14,179			14,241			18,065			18,555			14,641
Foreclosed assets		8,217			8,306			4,444			3,533			4,367
Total nonperforming assets	$	22,396		$	22,547		$	22,509		$	22,088		$	19,008
As a % of loans and foreclosed assets		1.45	%		1.48	%		1.50	%		1.46	%		1.30	%
As a % of end of period total assets		0.65			0.68			0.67			0.67			0.62
CAPITAL RATIOS
Tier 1 Risk-based		18.19	%		18.22	%		18.02	%		17.73	%		18.12	%
Total Risk-based		19.45			19.48			19.28			18.99			19.37
Tier 1 Leverage		10.89			10.63			10.50			10.69			10.83
Equity to assets		13.08			12.92			12.64			12.68			13.51

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2010		2009			2010		2009
NONINTEREST INCOME
Gain on sale of student loans, net	$	—	$	273		$	—	$	889
Gain on securities transactions, net		7		897			79		1,645
Trust fees		2,706		2,328			7,904		6,570
Service charges on deposits		5,100		5,732			15,252		16,294
Real estate mortgage fees		1,154		731			2,571		2,177
Net gain (loss) on sale of foreclosed assets		313		(128	)		383		(187	)
ATM and credit card fees		2,915		2,427			8,255		7,063
Other noninterest income		731		619			2,164		2,085
Total Noninterest Income	$	12,926	$	12,879		$	36,608	$	36,536
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	11,978	$	11,512		$	35,657	$	34,695
Profit sharing expense		1,148		689			2,967		1,739
Net occupancy expense		1,654		1,599			4,793		4,785
Equipment expense		1,851		1,920			5,542		5,828
Printing, stationery and supplies		425		508			1,283		1,406
ATM and credit card expenses		985		810			2,735		2,462
Audit fees		246		292			742		840
Legal, tax and professional fees		1,004		778			2,758		2,470
FDIC Insurance premiums		975		818			2,953		4,074
Correspondent bank service charges		192		204			564		839
Advertising and public relations		803		661			2,288		1,783
Amortization of intangible assets		151		214			463		652
Other noninterest expense		3,294		3,013			9,250		8,752
Total Noninterest Expense	$	24,706	$	23,018		$	71,995	$	70,325
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,718	$	2,570		$	7,953	$	7,256

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

	Three Months Ended
	September 30, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Short-term investments	$	168,709	$	381		0.90	%
Taxable securities		933,394		9,026		3.87	%
Tax exempt securities		476,889		7,182		6.02	%
Loans		1,533,624		23,389		6.05	%
Total interest-earning assets		3,112,616		39,978		5.10	%
Noninterest-earning assets		251,616
Total assets	$	3,364,232
Interest-bearing liabilities:
Deposits	$	1,939,078	$	3,249		0.66	%
Fed funds purchased and other short term borrowings		158,051		97		0.24	%
Total interest-bearing liabilities		2,097,129		3,346		0.63	%
Noninterest-bearing liabilities		826,824
Shareholders’ equity		440,279
Total liabilities and shareholders’ equity	$	3,364,232
Net interest income and margin (tax equivalent)			$	36,632		4.67	%

	Nine Months Ended
	September 30, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Short-term investments	$	186,560	$	1,102		0.79	%
Taxable securities		920,279		27,229		3.95	%
Tax exempt securities		463,508		21,209		6.10	%
Loans		1,512,992		69,070		6.10	%
Total interest-earning assets		3,083,339		118,610		5.14	%
Noninterest-earning assets		254,084
Total assets	$	3,337,423
Interest-bearing liabilities:
Deposits	$	1,912,051	$	10,247		0.72	%
Fed funds purchased and other short term borrowings		169,692		393		0.31	%
Total interest-bearing liabilities		2,081,743		10,640		0.68	%
Noninterest-bearing liabilities		827,421
Shareholders’ equity		428,259
Total liabilities and shareholders’ equity	$	3,337,423
Net interest income and margin (tax equivalent)			$	107,970		4.68	%