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 24^TH YEAR OF CONSECUTIVE
EARNINGS GROWTH

ABILENE, Texas, January 27, 2011 — First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the fourth quarter of 2010 of $15.51 million, up 23.7 percent compared with earnings of $12.54 million in the same quarter last year. Basic earnings per share were $0.74 for the fourth quarter of 2010 compared with $0.60 in the same quarter of 2009.

For the year, net income increased 10.9 percent to $59.66 million compared with $53.80 million in 2009, making 2010 the Company’s 24^th consecutive year of earnings growth. Basic earnings per share for the year were $2.86 compared with $2.58 in the previous year. Results for the year included net proceeds after income tax of $1.30 million, reported in the 2010 third quarter, from the expropriation of company-owned property in Southlake, Texas, by the Texas Department of Transportation. Excluding this extraordinary item, net income for the year would have been $58.36 million, an 8.5 percent increase compared with 2009.

Net interest income for the fourth quarter of 2010 increased 11.1 percent to $36.15 million compared with $32.55 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.69 percent for the fourth quarter of 2010 compared with 4.74 percent in the same period a year ago and 4.67 percent in the third quarter of 2010.

The provision for loan losses was $1.99 million in the fourth quarter of 2010, down from $4.37 million in the same quarter last year and unchanged from the third quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.53 percent at December 31, 2010, compared with 1.45 percent at September 30, 2010. Subsequent to December 31, 2010, a loan totaling $2.1 million, which was past due 90 days and still accruing paid off. The continued provision for loan losses in the fourth quarter of 2010 reflects the growth in loans and higher levels of nonperforming assets.

Noninterest income in the fourth quarter of 2010 was $12.87 million compared with $12.06 million in the same quarter a year earlier. Trust fees increased to $2.91 million in the fourth quarter of 2010 compared with $2.51 million in the same quarter last year. Real estate mortgage fees increased to $1.24 million in the fourth quarter of 2010 compared with $732,000 a year ago. Service charges on deposit accounts decreased to $4.85 million during the fourth quarter of 2010 compared with $5.66 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services. ATM and credit card fees increased to $3.02 million from $2.48 million in the fourth quarter last year.

Noninterest expense increased in the fourth quarter of 2010 to $26.26 million from $23.68 million in the same quarter last year, primarily from a $711,000 increase in profit sharing expense, a $306,000 increase in ATM and credit card expenses and a $283,000 increase in legal, tax and professional expense. The Company’s efficiency ratio in the fourth quarter of 2010 was 50.53 percent compared with 50.18 in the same quarter last year.

All amounts for the 2010 fourth quarter include the results of the Company’s acquisition of First State Bank, Huntsville, Texas, which was effective November 1, 2010. As of December 31, 2010, Huntsville had total loans of $90.4 million and total deposits of $158.9 million.

For the year, net interest income increased 5.4 percent for the year to $136.17 million from $129.17 million a year ago. The provision for loan losses totaled $8.96 million for 2010 compared to $11.42 million in the previous year. Noninterest income for 2010 was $49.48 million compared with $48.60 million a year ago. Noninterest expense was $98.26 million for the year compared with $94.00 million in 2009.

As of December 31, 2010, consolidated assets for the Company totaled $3.78 billion compared with $3.28 billion a year ago. Loans totaled $1.69 billion at year end compared with loans of $1.51 billion a year ago. Total deposits were $3.11 billion as of December 31, 2010, compared with $2.68 billion a year earlier. Shareholders’ equity rose to $441.69 million as of December 31, 2010, compared with $415.70 million the prior year.

“Our company again performed well for the fourth quarter and the full year, despite another challenging year for the economy and the banking industry,” said F. Scott Dueser, Chairman, President and CEO. “This was a year of exceptional progress for First Financial, as we grew both through acquisition and organically. While in the short-term the national economy remains flat, as we begin the new year, we remain optimistic about the long-term outlook for our company and are fully committed to providing excellent results for our customers and shareholders.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 11 separately chartered banks with 52 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 State Bank, Huntsville; 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)

	December 31,
	2010			2009
ASSETS:
Cash and due from banks	$	124,177		$	139,917
Interest-bearing deposits in banks		243,776			167,336
Fed funds sold		—			14,290
Investment securities		1,546,242			1,285,377
Loans		1,690,346			1,514,368
Allowance for loan losses		(31,106	)		(27,612	)
Net loans		1,659,240			1,486,756
Premises and equipment		70,162			64,363
Goodwill		71,865			62,112
Other intangible assets		659			1,040
Other assets		60,246			58,265
Total assets	$	3,776,367		$	3,279,456
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	959,473		$	836,323
Interest-bearing deposits		2,153,828			1,848,434
Total deposits		3,113,301			2,684,757
Short-term borrowings		178,356			146,094
Other liabilities		43,022			32,903
Shareholders’ equity		441,688			415,702
Total liabilities and shareholders’ equity	$	3,776,367		$	3,279,456

	Three Months Ended						Year Ended
	December 31,						December 31,
	2010			2009			2010			2009
INCOME STATEMENTS
Interest income	$	39,041		$	36,417		$	149,699		$	146,445
Interest expense		2,887			3,872			13,528			17,274
Net interest income		36,154			32,545			136,171			129,171
Provision for loan losses		1,992			4,365			8,962			11,419
Net interest income after provision for loan losses		34,162			28,180			127,209			117,752
Noninterest income		12,870			12,061			49,478			48,598
Noninterest expense		26,261			23,675			98,256			94,000
Net income before income taxes and extraordinary item		20,771			16,566			78,431			72,350
Income tax expense		5,256			4,025			20,068			18,553
Net income before extraordinary item		15,515			12,541			58,363			53,797
Extraordinary item — expropriation of property, net of income tax		—			—			1,296			—
Net income	$	15,515		$	12,541		$	59,659		$	53,797
PER COMMON SHARE DATA
Net income before extraordinary item — basic	$	0.74		$	0.60		$	2.80		$	2.58
Net income before extraordinary item — diluted		0.74			0.60			2.80			2.58
Net income — basic		0.74			0.60			2.86			2.58
Net income — diluted		0.74			0.60			2.86			2.58
Cash dividends		0.34			0.34			1.36			1.36
Book value								21.09			19.96
Market value								51.25			54.23
Shares outstanding — end of period		20,942,141			20,826,431			20,942,141			20,826,431
Average outstanding shares — basic		20,910,645			20,823,913			20,860,991			20,813,590
Average outstanding shares — diluted		20,921,732			20,851,925			20,879,709			20,837,457
PERFORMANCE RATIOS
Return on average assets		1.71	%		1.56	%		1.75	%		1.72	%
Return on average equity		13.63			12.07			13.74			13.63
Net interest margin (tax equivalent)		4.69			4.74			4.68			4.80
Efficiency ratio		50.53			50.18			49.49			50.11

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

	Quarter Ended
	2010												2009
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	30,013		$	28,954		$	28,750		$	27,612		$	25,532
Loans charged off		(1,240	)		(1,178	)		(2,970	)		(1,059	)		(2,430	)
Loan recoveries		341			249			201			187			145
Net charge-offs		(899	)		(929	)		(2,769	)		(872	)		(2,285	)
Provision for loan losses		1,992			1,988			2,973			2,010			4,365
Balance at end of period	$	31,106		$	30,013		$	28,954		$	28,750		$	27,612
Allowance for loan losses / period-end loans		1.84	%		1.95	%		1.91	%		1.92	%		1.82
Allowance for loan losses / nonperforming loans		176.3			211.7			203.3			159.1			148.8
Net charge-offs / average loans (annualized)		0.22			0.24			0.73			0.24			0.62
NONPERFORMING ASSETS
Nonaccrual loans	$	15,445		$	14,110		$	14,240		$	17,775		$	18,540
Accruing loans 90 days past due		2,196			69			1			290			15
Total nonperforming loans		17,641			14,179			14,241			18,065			18,555
Foreclosed assets		8,309			8,217			8,306			4,444			3,533
Total nonperforming assets	$	25,950		$	22,396		$	22,547		$	22,509		$	22,088
As a % of loans and foreclosed assets		1.53	%		1.45	%		1.48	%		1.50	%		1.46
As a % of end of period total assets		0.69			0.65			0.68			0.67			0.67
*     In January 2011, a loan totaling $2.1 million accruing past due 90 days paid off
CAPITAL RATIOS
Tier 1 Risk-based		17.01	%		18.19	%		18.22	%		18.02	%		17.73
Total Risk-based		18.26			19.45			19.48			19.28			18.99
Tier 1 Leverage		10.28			10.89			10.63			10.50			10.69
Equity to assets		11.70			13.08			12.92			12.64			12.68

	Three Months Ended					Year Ended
	December 31,					December 31,
	2010		2009			2010		2009
NONINTEREST INCOME
Gain (loss) on sale of student loans, net	$	—	$	94		$	—	$	983
Gain on securities transactions, net		284		206			363		1,851
Trust fees		2,905		2,513			10,809		9,083
Service charges on deposits		4,852		5,662			20,104		21,956
Real estate mortgage fees		1,241		732			3,812		2,909
Net gain (loss) on sale of foreclosed assets		74		(361	)		457		(548	)
ATM and credit card fees		3,020		2,484			11,276		9,546
Other noninterest income		494		731			2,657		2,818
Total Noninterest Income	$	12,870	$	12,061		$	49,478	$	48,598
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	12,686	$	12,431		$	48,342	$	47,126
Profit sharing expense		1,332		621			4,299		2,360
Net occupancy expense		1,649		1,508			6,442		6,293
Equipment expense		1,935		1,915			7,476		7,743
Printing, stationery and supplies		435		486			1,717		1,892
ATM and credit card expenses		1,044		738			3,779		3,200
Audit fees		271		224			1,014		1,063
Legal, tax and professional fees		1,065		782			3,824		3,253
FDIC Insurance premiums		1,047		819			4,000		4,893
Correspondent bank service charges		204		193			767		1,032
Advertising and public relations		832		783			3,120		2,566
Amortization of intangible assets		146		199			609		851
Other noninterest expense		3,615		2,976			12,867		11,728
Total Noninterest Expense	$	26,261	$	23,675		$	98,256	$	94,000
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,947	$	2,575		$	10,899	$	9,832

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

	Three Months Ended
	December 31, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	3,202	$	—		0.00	%
Interest-bearing deposits in nonaffiliated banks		193,199		440		0.90	%
Taxable securities		961,748		8,998		3.74	%
Tax exempt securities		518,452		7,796		6.01	%
Loans		1,634,175		24,754		6.01	%
Total interest-earning assets		3,310,776		41,988		5.03	%
Noninterest-earning assets		283,937
Total assets	$	3,594,713
Interest-bearing liabilities:
Deposits	$	2,051,184	$	2,824		0.55	%
Fed funds purchased and other short term borrowings		180,974		63		0.14	%
Total interest-bearing liabilities		2,232,158		2,887		0.51	%
Noninterest-bearing liabilities		910,915
Shareholders’ equity		451,640
Total liabilities and shareholders’ equity	$	3,594,713
Net interest income and margin (tax equivalent)			$	39,101		4.69	%

	Year Ended
	December 31, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	3,232	$	2		0.07	%
Interest-bearing deposits in nonaffiliated banks		185,809		1,539		0.83	%
Taxable securities		930,731		36,227		3.89	%
Tax exempt securities		477,357		29,005		6.08	%
Loans		1,543,537		93,825		6.08	%
Total interest-earning assets		3,140,666		160,598		5.11	%
Noninterest-earning assets		261,608
Total assets	$	3,402,274
Interest-bearing liabilities:
Deposits	$	1,947,120	$	13,071		0.67	%
Fed funds purchased and other short term borrowings		172,536		457		0.26	%
Total interest-bearing liabilities		2,119,656		13,528		0.64	%
Noninterest-bearing liabilities		848,466
Shareholders’ equity		434,152
Total liabilities and shareholders’ equity	$	3,402,274
Net interest income and margin (tax equivalent)			$	147,070		4.68	%