First Financial Bankshares (FFIN) 8-K 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 18, 2013 –First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2013 of $19.49 million, up 6.21 percent compared with earnings of $18.35 million in the same quarter last year. Basic earnings per share were $0.62 for the second quarter of 2013 compared with $0.58 in the same quarter a year ago.

All amounts for the second quarter of 2013 include the results of the Company’s acquisition of Orange Savings Bank, SSB, Orange, Texas, which was effective on May 31, 2013. As of May 31, 2013, Orange had total loans of $293.29 million and total deposits of $385.95 million.

Net interest income increased 7.64 percent to $41.50 million compared with $38.56 million in 2012. The net interest margin, on a taxable equivalent basis, was 4.18 percent compared with 4.33 percent in the same quarter last year and 4.19 percent in the first quarter of this year.

The provision for loan losses was $832 thousand in the second quarter of 2013 compared with $759 thousand in the same quarter last year and $401 thousand in the first quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.20 percent at June 30, 2013, compared with 1.20 percent at March 31, 2013, and 1.76 percent at June 30, 2012. Classified loans totaled $87.83 million at June 30, 2013, compared to $70.18 million at March 31, 2013, and $80.86 million at June 30, 2012. The increase in dollar amount of nonperforming assets and classified loans was primarily from the Orange Savings Bank, SSB acquisition.

Noninterest income increased 12.54 percent in the second quarter of 2013 to $15.15 million compared with $13.46 million in the same quarter a year ago. Trust fees increased to $3.95 million in the second quarter of 2013 compared with $3.67 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $3.05 billion from $2.65 billion a year ago. ATM, interchange and credit card fees increased 10.49 percent to $4.18 million compared with $3.78 million in the same quarter last year. Real estate mortgage income increased to $1.69 million in the second quarter of 2013 compared with $1.22 million in the same quarter a year ago.

Noninterest expense increased in the second quarter of 2013 to $29.91 million from $26.75 million in the same quarter last year. The Company’s efficiency ratio in the second quarter of 2013 was 49.25 percent compared with 48.02 percent in the same quarter last year. Healthcare expenses for the second quarter of 2013 totaled $1.28 million compared to $833 thousand in the same quarter a year ago. Also included in noninterest expense in the second quarter of 2013 was $232 thousand and $226 thousand related to the acquisition of Orange Savings Bank, SSB and database consolidation technology costs, respectively.

For the first half of 2013, net income increased 5.43 percent to $38.07 million from $36.11 million a year ago. Basic earnings per share rose to $1.20 in the first half of 2013 from $1.15 in the same period last year. Net interest income increased 4.37 percent to $80.17 million in the first half of 2013 from $76.81 million in the same period a year ago. The provision for loan losses totaled $1.23 million compared with $2.06 million in the first half of the previous year. Noninterest income was $29.11 million in the first half of 2013 compared with $26.76 million a year ago. Noninterest expense rose to $57.38 million in the first half of 2013 compared with $53.21 million last year.

As of June 30, 2013, consolidated assets for the Company totaled $4.98 billion compared with $4.29 billion a year ago. Loans totaled $2.58 billion at quarter end compared to $1.92 billion a year ago. Total deposits were $3.92 billion as of June 30, 2013, versus $3.39 billion a year earlier. Shareholders’ equity rose to $575.86 million as of June 30, 2013, compared with $534.26 million at June 30, 2012.

“We are pleased to report another positive quarter and are excited about our Orange acquisition and welcome their employees and customers to First Financial,” said F. Scott Dueser, Chairman, President and CEO. “In the second half of the year, we will continue to pursue opportunities for acquisitions and for internal growth while remaining vigilant over expenses and loan quality.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 12 banking regions with 61 locations in Texas including Abilene, Acton, Albany, Aledo, Alvarado, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Decatur, Eastland, Fort Worth, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Mauriceville, McLewis, Merkel, Midlothian, Mineral Wells, Moran, Newton, Odessa, Orange, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Stephenville, Sweetwater, Trent, Trophy Club, Vidor, Waxahachie, Weatherford and Willow Park. 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 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)

	As of
	2013						2012
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
ASSETS:
Cash and due from banks	$	138,087		$	113,958		$	207,018		$	128,606		$	122,534
Interest-bearing deposits in banks		6,624			20,065			139,676			25,633			25,794
Interest-bearing time deposits in banks		39,350			45,172			49,005			67,506			74,594
Fed funds sold		16,025			3,175			14,045			23,400			10,100
Investment securities		1,975,490			1,959,054			1,820,096			1,883,864			1,963,367
Loans		2,578,883			2,138,137			2,088,623			2,003,854			1,918,292
Allowance for loan losses		(34,099	)		(34,672	)		(34,839	)		(34,932	)		(34,747	)
Net loans		2,544,784			2,103,465			2,053,784			1,968,922			1,883,545
Premises and equipment		94,808			86,265			84,122			80,580			80,404
Goodwill		94,882			71,865			71,865			71,865			71,865
Other intangible assets		2,366			98			108			136			175
Other assets		70,189			52,863			62,293			60,035			59,426
Total assets	$	4,982,605		$	4,455,980		$	4,502,012		$	4,310,547		$	4,291,804
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	1,305,049		$	1,237,840		$	1,311,708		$	1,200,154		$	1,156,238
Interest-bearing deposits		2,612,540			2,312,286			2,320,876			2,244,244			2,235,942
Total deposits		3,917,589			3,550,126			3,632,584			3,444,398			3,392,180
Short-term borrowings		431,575			263,345			259,697			254,480			251,428
Other liabilities		57,577			78,257			52,768			61,757			113,933
Shareholders’ equity		575,864			564,252			556,963			549,912			534,263
Total liabilities and shareholders’ equity	$	4,982,605		$	4,455,980		$	4,502,012		$	4,310,547		$	4,291,804
	Quarter Ended
	2013						2012
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
INCOME STATEMENTS
Interest income	$	42,446		$	39,575		$	39,801		$	40,287		$	39,911
Interest expense		946			904			1,049			1,168			1,355
Net interest income		41,500			38,671			38,752			39,119			38,556
Provision for loan losses		832			401			642			787			759
Net interest income after provision for loan losses		40,668			38,270			38,110			38,332			37,797
Noninterest income		15,153			13,960			14,948			15,499			13,464
Noninterest expense		29,911			27,471			28,633			27,203			26,745
Net income before income taxes		25,910			24,759			24,425			26,628			24,516
Income tax expense		6,420			6,182			6,107			6,828			6,165
Net income	$	19,490		$	18,577		$	18,318		$	19,800		$	18,351
PER COMMON SHARE DATA
Net income - basic	$	0.62		$	0.59		$	0.58		$	0.63		$	0.58
Net income - diluted		0.61			0.59			0.58			0.63			0.58
Cash dividends declared		0.26			0.25			0.25			0.25			0.25
Shares outstanding - end of period		31,967,424			31,519,973			31,496,881			31,488,530			31,481,747
Average outstanding shares - basic		31,683,355			31,507,975			31,490,402			31,484,375			31,478,980
Average outstanding shares - diluted		31,809,840			31,601,364			31,530,907			31,502,172			31,497,241
PERFORMANCE RATIOS
Return on average assets		1.67	%		1.71	%		1.68	%		1.84	%		1.75	%
Return on average equity		13.53			13.41			13.09			14.53			14.01
Net interest margin (tax equivalent)		4.18			4.19			4.17			4.26			4.33
Efficiency ratio		49.25			48.68			49.86			46.61			48.02

	Six Months Ended
	June 30,
	2013			2012
INCOME STATEMENTS
Interest income	$	82,022		$	79,708
Interest expense		1,851			2,895
Net interest income		80,171			76,813
Provision for loan losses		1,233			2,055
Net interest income after provision for loan losses		78,938			74,758
Noninterest income		29,113			26,762
Noninterest expense		57,382			53,213
Net income before income taxes		50,669			48,307
Income tax expense		12,602			12,200
Net income	$	38,067		$	36,107
PER COMMON SHARE DATA
Net income - basic	$	1.20		$	1.15
Net income - diluted		1.20			1.15
Cash dividends		0.51			0.49
Book Value		18.01			16.97
Market Value		55.66			34.56
Shares outstanding - end of period		31,967,424			31,481,747
Average outstanding shares - basic		31,596,150			31,472,843
Average outstanding shares - diluted		31,709,971			31,474,653
PERFORMANCE RATIOS
Return on average assets		1.69	%		1.74	%
Return on average equity		13.47			13.90
Net interest margin (tax equivalent)		4.18			4.36
Efficiency ratio		48.98			48.05

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Quarter Ended
	2013						2012
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	34,672		$	34,839		$	34,932		$	34,747		$	34,529
Loans charged off		(1,570	)		(823	)		(1,119	)		(1,064	)		(766	)
Loan recoveries		165			255			384			462			225
Net charge-offs		(1,405	)		(568	)		(735	)		(602	)		(541	)
Provision for loan losses		832			401			642			787			759
Balance at end of period	$	34,099		$	34,672		$	34,839		$	34,932		$	34,747
Allowance for loan losses / period-end loans		*1.32	%		1.62	%		1.67	%		1.74	%		1.81	%
Allowance for loan losses / nonperforming loans		128.75			153.87			159.10			143.45			130.08
Net charge-offs / average loans (annualized)		0.24			0.11			0.14			0.12			0.12

* Reflects the impact of loans acquired in the Orange Savings Bank, SSB acquisition, which were initially recorded at fair value with no allocated allowance for loan losses

NONPERFORMING ASSETS
Nonaccrual loans	$	26,297		$	22,509		$	21,800		$	24,283		$	26,606
Accruing loans 90 days past due		187			24			97			69			105
Total nonperforming loans		26,484			22,533			21,897			24,352			26,711
Foreclosed assets		4,589			3,185			3,565			6,373			7,149
Total nonperforming assets	$	31,073		$	25,718		$	25,462		$	30,725		$	33,860
As a % of loans and foreclosed assets		1.20	%		1.20	%		1.22	%		1.53	%		1.76	%
As a % of end of period total assets		0.62			0.58			0.57			0.71			0.79
CAPITAL RATIOS
Tier 1 risk-based		15.20	%		17.54	%		17.43	%		17.66	%		17.23	%
Total risk-based		16.31			18.80			18.68			18.92			18.48
Tier 1 leverage		10.32			10.69			10.60			10.49			10.36
Equity to assets		11.56			12.66			12.37			12.76			12.45

	Quarter Ended
	2013					2012
	June 30,		Mar. 31,			Dec. 31,		Sept. 30,			June 30,
NONINTEREST INCOME
Trust fees	$	3,953	$	3,793		$	3,616	$	3,723		$	3,670
Service charges on deposits		4,316		3,895			4,432		4,337			4,042
ATM, interchange and credit card fees		4,181		3,729			3,961		3,767			3,784
Real estate mortgage fees		1,686		1,384			1,331		1,495			1,218
Net gain on sale of available-for-sale securities		33		222			565		1,479			382
Net gain (loss) on sale of foreclosed assets		17		(316	)		162		(106	)		(404	)
Net gain (loss) on sale of assets		1		168			5		(32	)		105
Other noninterest income		966		1,085			876		836			667
Total noninterest income	$	15,153	$	13,960		$	14,948	$	15,499		$	13,464
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	14,968	$	14,101		$	13,565	$	13,502		$	13,304
Profit sharing expense		1,183		1,079			1,441		1,343			885
Net occupancy expense		2,064		1,766			1,790		1,806			1,743
Equipment expense		2,380		2,281			2,269		2,269			2,144
FDIC insurance premiums		568		572			565		563			565
ATM, interchange and credit card expenses		1,347		1,340			1,432		1,317			1,450
Legal, tax and professional fees		1,272		993			1,162		1,019			968
Audit fees		351		334			323		311			283
Printing, stationery and supplies		498		472			487		468			511
Amortization of intangible assets		33		10			28		38			38
Advertising and public relations		1,100		994			1,085		998			953
Correspondent bank service charges		222		202			220		220			216
Other noninterest expense		3,925		3,327			4,266		3,349			3,685
Total noninterest expense	$	29,911	$	27,471		$	28,633	$	27,203		$	26,745
TAX EQUIVALENT YIELD ADJUSTMENT	$	4,082	$	3,795		$	3,727	$	3,743		$	3,673

	Six Months Ended
	June 30,
	2013			2012
NONINTEREST INCO ME
Trust fees	$	7,746		$	7,124
Service charges on deposits		8,211			7,924
ATM, interchange and credit card fees		7,910			7,460
Real estate mortgage fees		3,069			2,268
Net gain on sale of available-for-sale securities		255			728
Net gain (loss) on sale of foreclosed assets		(299	)		(406	)
Net gain (loss) on sale of assets		169			235
Other noninterest income		2,052			1,429
Total Noninterest Income	$	29,113		$	26,762
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	29,069		$	26,491
Profit sharing expense		2,262			1,927
Net occupancy expense		3,831			3,480
Equipment expense		4,661			4,252
FDIC Insurance premiums		1,141			1,093
ATM, interchange and credit card expenses		2,687			2,699
Legal, tax and professional fees		2,265			2,002
Audit fees		685			578
Printing, stationery and supplies		970			1,015
Amortization of intangible assets		43			82
Advertising and public relations		2,094			1,894
Correspondent bank service charges		424			416
Other noninterest expense		7,250			7,284
Total Noninterest Expense	$	57,382		$	53,213
TAX EQUIVALENT YIELD ADJUSTMENT	$	7,877		$	7,167

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Three Months Ended
	June 30, 2013
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	5,918	$	9		0.58	%
Interest-bearing deposits in nonaffiliated banks		59,333		111		0.75	%
Taxable securities		1,066,586		6,313		2.37	%
Tax exempt securities		917,460		10,813		4.71	%
Loans		2,324,268		29,282		5.05	%
Total interest-earning assets		4,373,565		46,528		4.27	%
Noninterest-earning assets		305,201
Total assets	$	4,678,766
Interest-bearing liabilities:
Deposits	$	2,403,899	$	853		0.14	%
Fed funds purchased and other short term borrowings		405,438		93		0.09	%
Total interest-bearing liabilities		2,809,337		946		0.14	%
Noninterest-bearing liabilities		1,291,602
Shareholders’ equity		577,827
Total liabilities and shareholders’ equity	$	4,678,766
Net interest income and margin (tax equivalent)			$	45,582		4.18	%
	Six Months Ended
	June 30, 2013
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	9,570	$	14		0.30	%
Interest-bearing deposits in nonaffiliated banks		91,830		281		0.62	%
Taxable securities		1,052,723		12,688		2.41	%
Tax exempt securities		871,459		20,886		4.79	%
Loans		2,218,292		56,030		5.09	%
Total interest-earning assets		4,243,874		89,899		4.27	%
Noninterest-earning assets		302,071
Total assets	$	4,545,945
Interest-bearing liabilities:
Deposits	$	2,362,645	$	1,721		0.15	%
Fed funds purchased and other short term borrowings		338,549		130		0.08	%
Total interest-bearing liabilities		2,701,194		1,851		0.14	%
Noninterest-bearing liabilities		1,274,970
Shareholders’ equity		569,781
Total liabilities and shareholders’ equity	$	4,545,945
Net interest income and margin (tax equivalent)			$	88,048		4.18	%