First Financial Bankshares (FFIN) 8-K First Financial Bankshares Announces Second 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
SECOND QUARTER EARNINGS RESULTS

ABILENE, Texas, July 17, 2008 — First Financial Bankshares, Inc. today reported earnings for the second quarter of 2008 of $13.60 million, up 2.5 percent from $13.27 million in the same quarter last year. Basic earnings per share were $0.65 per share for the second quarter, compared with $0.64 for the same quarter last year.

Net interest income for the second quarter of 2008 increased 10.2 percent to $30.02 million compared with $27.25 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.61 percent for the second quarter of 2008 compared with 4.38 percent in the same period a year ago and 4.58 percent for the quarter ended March 31, 2008.

Noninterest income in the second quarter of 2008 was $13.46 million compared with $12.97 million in the same quarter a year earlier. Trust fees increased 3.8 percent to $2.36 million compared with $2.27 million in the second quarter last year. Service charges on deposit accounts increased 2.1 percent to $5.67 million compared with $5.55 million a year ago. The gain from sale of student loans totaled $1.42 million for the 2008 second quarter compared with $1.62 million for the same quarter in 2007. Real estate mortgage fees decreased 11.5 percent to $765,000 from $864,000 in the same quarter last year. ATM and debit card fees increased 21.8 percent to $2.26 million from $1.86 million a year ago.

Noninterest expense increased 8.3 percent in the second quarter of 2008 to $23.01 million from $21.25 million in the same quarter last year. The Company’s efficiency ratio in the second quarter improved to 50.95 percent compared with 51.19 percent in the same quarter a year ago.

The provision for loan losses increased to $1.44 million in the second quarter of 2008, up from $238,000 in the same quarter last year and $1.07 million in the first quarter of 2008. This increase is reflective of the Company’s growth in loans, concern for a slowing economy and the increase in nonperforming loans. Nonperforming assets as a percentage of loans and foreclosed assets totaled 71 basis points at June 30, 2008, compared with 38 basis points at March 31, 2008, and 46 basis points at June 30, 2007.

“We are pleased to report another quarter of earnings growth and improved net interest margins, especially in light of the slowing economy and credit problems that have impacted consumers and businesses nationwide,” said F. Scott Dueser, President and

Chief Executive Officer. “The Texas economy remains relatively strong compared with many other regions, but Texas is not immune to the slowing national economy.”

For the first half of 2008, net income increased 8.2 percent to $26.76 million from $24.73 million a year ago. Basic earnings per share rose to $1.29 in the first half of 2008 from $1.19 in the same period last year. Net interest income increased 11.2 percent in the first half to $59.85 million compared with $53.82 million a year ago. Noninterest income was $25.77 million in the first half of 2008, up 7.8 percent from $23.89 million a year ago.

As of June 30, 2008, consolidated assets for the Company totaled $3.08 billion compared with $2.85 billion a year ago. Loans totaled $1.51 billion at quarter end, compared with loans of $1.39 billion a year ago. Total deposits were $2.57 billion as of June 30, 2008, compared with $2.38 billion a year earlier. Noninterest-bearing deposits grew $142.7 million from a year ago. Shareholders’ equity increased $37.4 million to $343.9 million as of June 30, 2008.

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 47 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; Hereford State Bank, Hereford; First Financial Bank, N.A., Mineral Wells; San Angelo National Bank, 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, and Trent; and Weatherford National Bank, Weatherford, Willow Park, Aledo and Brock. The Company also operates First Financial Trust and Asset Management Company, N.A., with five 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 athttp://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)

	June 30,
	2008			2007
ASSETS:
Cash and due from banks	$	156,220		$	113,794
Fed funds sold		107,920			54,760
Investment securities		1,153,902			1,127,344
Loans		1,512,542			1,391,984
Allowance for loan losses		(18,677	)		(16,425	)
Net loans		1,493,865			1,375,559
Premises and equipment		63,514			61,204
Goodwill		62,112			62,112
Other intangible assets		2,480			3,829
Other assets		44,652			51,850
Total assets	$	3,084,665		$	2,850,452
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	807,681		$	664,952
Interest-bearing deposits		1,760,940			1,711,799
Total deposits		2,568,621			2,376,751
Short-term borrowings		149,895			147,110
Other liabilities		22,238			20,075
Shareholders’ equity		343,911			306,516
Total liabilities and shareholders’ equity	$	3,084,665		$	2,850,452

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
INCOME STATEMENTS
Interest income	$	38,951		$	42,259		$	80,697		$	83,331
Interest expense		8,931			15,013			20,847			29,512
Net interest income		30,020			27,246			59,850			53,819
Provision for loan losses		1,441			238			2,509			479
Net interest income after provision for loan losses		28,579			27,008			57,341			53,340
Noninterest income		13,455			12,972			25,767			23,892
Noninterest expense		23,009			21,247			45,670			42,114
Net income before income taxes		19,025			18,733			37,438			35,118
Income tax expense		5,423			5,463			10,674			10,385
Net income	$	13,602		$	13,270		$	26,764		$	24,733
PER COMMON SHARE DATA
Net income — basic	$	0.65		$	0.64		$	1.29		$	1.19
Net income — diluted		0.65			0.64			1.29			1.18
Cash dividends		0.34			0.32			0.66			0.62
Book value								16.54			14.76
Market value								45.81			38.81
Shares outstanding — end of period		20,792,309			20,760,116			20,792,309			20,760,116
Average outstanding shares — basic		20,786,902			20,756,846			20,780,421			20,752,044
Average outstanding shares — diluted		20,833,048			20,888,879			20,816,219			20,872,613
PERFORMANCE RATIOS
Return on average assets		1.81	%		1.86	%		1.78	%		1.75	%
Return on average equity		15.55			17.25			15.48			16.35
Net interest margin (tax equivalent)		4.61			4.38			4.59			4.38
Efficiency ratio		50.95			51.19			51.40			52.50

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

	Quarter Ended
	2008						2007
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	18,377		$	17,462		$	16,728		$	16,425		$	16,458
Loans charged off		(1,374	)		(288	)		(803	)		(342	)		(505	)
Loan recoveries		233			135			160			170			234
Net (charge-offs) recoveries		(1,141	)		(153	)		(643	)		(172	)		(271	)
Provision for loan losses		1,441			1,068			1,377			475			238
Balance at end of period	$	18,677		$	18,377		$	17,462		$	16,728		$	16,425
Allowance for loan losses/period-end loans		1.23	%		1.20	%		1.14	%		1.15	%		1.18	%
Allowance for loan losses/nonperforming loans		208.4			465.0			541.5			395.6			387.4
Net charge-offs (recoveries)/average loans (annualized)		0.30			0.04			0.17			0.05			0.08
NONPERFORMING ASSETS
Nonaccrual loans	$	8,963		$	3,933		$	3,189		$	4,023		$	4,179
Accruing loans 90 days past due		0			19			36			206			61
Total nonperforming loans		8,963			3,952			3,225			4,229			4,240
Foreclosed assets		1,792			1,908			1,506			2,594			2,174
Total nonperforming assets	$	10,755		$	5,860		$	4,731		$	6,823		$	6,414
As a % of loans and foreclosed assets		0.71	%		0.38	%		0.31	%		0.47	%		0.46	%
CAPITAL RATIOS
Tier 1 Risk-based		15.25	%		15.08	%		14.65	%		14.81	%		14.85	%
Total Risk-based		16.27			16.09			15.62			15.76			15.81
Tier 1 Leverage		9.55			9.34			9.23			9.31			9.05
Equity to assets		11.15			11.49			10.93			11.12			10.75

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2008			2007		2008		2007
NONINTEREST INCOME
Gain on sale of student loans, net	$	1,432		$	1,616	$	1,715	$	1,780
Gain on securities transactions, net		166			0		559		85
Trust fees		2,359			2,272		4,731		4,372
Service charges on deposits		5,671			5,553		11,196		10,692
Real estate mortgage operations		765			864		1,369		1,602
Net gain (loss) on sale of foreclosed assets		(15	)		22		89		35
ATM and credit card fees		2,264			1,859		4,295		3,578
Other noninterest income		813			786		1,813		1,748
Total Noninterest Income	$	13,455		$	12,972	$	25,767	$	23,892
NONINTEREST EXPENSE
Salaries and employee benefits	$	12,545		$	11,448	$	25,093	$	22,887
Net occupancy expense		1,652			1,445		3,243		2,854
Equipment expense		1,865			1,812		3,712		3,557
Printing, stationery and supplies		441			520		951		992
ATM and credit card expenses		1,115			964		2,117		1,893
Audit fees		334			256		596		505
Legal, tax and professional fees		733			631		1,475		1,303
Correspondent bank service charges		299			293		565		618
Advertising and public relations		656			603		1,300		1,162
Amortization of intangible assets		304			377		615		760
Other noninterest expense		3,065			2,898		6,003		5,583
Total Noninterest Expense	$	23,009		$	21,247	$	45,670	$	42,114
TAX EQUIVALENT YIELD ADJUSTMENT	$	1,687		$	1,286	$	3,242	$	2,512

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

	Three Months Ended June 30, 2008
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	92,042	$	469		2.05	%
Interest bearing deposits in nonaffiliated banks		4,452		37		3.31	%
Taxable securities		827,589		9,376		4.53	%
Tax exempt securities		324,551		4,952		6.10	%
Loans		1,520,043		25,804		6.83	%
Total interest earning assets		2,768,677		40,638		5.90	%
Noninterest earning assets		258,663
Total assets	$	3,027,340
Interest bearing liabilities:
Deposits	$	1,757,120	$	8,491		1.94	%
Fed funds purchased and other short term borrowings		156,849		440		1.13	%
Total interest bearing liabilities		1,913,969		8,931		1.88	%
Noninterest bearing liabilities		761,462
Shareholders’ equity		351,909
Total liabilities and shareholders’ equity	$	3,027,340
Net interest income and margin (tax equivalent)			$	31,707		4.61	%

	Six Months Ended June 30, 2008
	Average		Tax Equivalent		Yield/
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	102,435	$	1,320		2.59	%
Interest bearing deposits in nonaffiliated banks		3,270		56		3.46	%
Taxable securities		806,059		18,493		4.59	%
Tax exempt securities		322,517		9,772		6.06	%
Loans		1,527,593		54,298		7.15	%
Total interest earning assets		2,761,874		83,939		6.11	%
Noninterest earning assets		257,913
Total assets	$	3,019,787
Interest bearing liabilities:
Deposits	$	1,776,471	$	19,579		2.22	%
Fed funds purchased and other short term borrowings		160,559		1,268		1.59	%
Total interest bearing liabilities		1,937,030		20,847		2.16	%
Noninterest bearing liabilities		735,119
Shareholders’ equity		347,638
Total liabilities and shareholders’ equity	$	3,019,787
Net interest income and margin (tax equivalent)			$	63,092		4.59	%