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

ABILENE, Texas, April 18, 2019—The Board of Directors ofFirst Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the first quarter of 2019 of $38.25 million, up $3.73 million when compared with earnings of $34.52 million in the same quarter last year. Basic earnings per share were $0.56 for the first quarter of 2019 compared with $0.51 in the same quarter a year ago.

Net interest income for the first quarter of 2019 was $69.51 million compared with $65.45 million in the same quarter of 2018. The net interest margin, on a taxable equivalent basis, was 4.00 percent for the first quarter of 2019 compared to 4.02 percent in the fourth quarter of 2018 and 3.88 percent in the first quarter of 2018. Included in interest income for the first quarter of 2019 was $466 thousand, or two basis points in net interest margin, related to discount accretion from fair value accounting related to the Kingwood and Orange acquisitions.

The provision for loan losses was $965 thousand in the first quarter of 2019 compared with $1.80 million in the fourth quarter of 2018 and $1.31 million in the first quarter of 2018. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.74 percent at March 31, 2019, compared with 0.75 percent at December 31, 2018, and 0.66 percent at March 31, 2018. Classified loans totaled $118.43 million at March 31, 2019, compared to $126.30 million at December 31, 2018, and $124.06 million at March 31, 2018.

Noninterest income in the first quarter of 2019 rose to $24.44 million compared with $24.42 million in the same quarter a year ago. Trust fees increased $75 thousand to $6.98 million in the first quarter of 2019 compared with $6.90 million in the same quarter last year, primarily due to continued growth in the fair value of Trust assets managed to $6.06 billion from $5.23 billion a year ago. Service charges on deposits increased 5.98 percent to $5.18 million compared with $4.88 million in the same quarter a year ago due to continued growth in net new accounts. Real estate mortgage fees increased 18.45 percent in the first quarter of 2019 to $3.47 million compared with $2.93 million in the same quarter a year ago. Offsetting these increases in the first quarter of 2019 was a decrease in gain on sale of securities of $1.22 million when compared to the same quarter of 2018.

Noninterest expense for the first quarter of 2019 totaled $47.37 million compared to $47.80 million in the first quarter of 2018. The Company’s efficiency ratio in the first quarter of 2019 was 49.46 percent compared with 51.76 percent in the same quarter last year. The decrease in noninterest expense in the first quarter of 2019 when compared to the same quarter a year ago was primarily related to the Company recording $1.55 million in the first quarter of 2018 related to contract termination and conversion costs associated with the Kingwood acquisition. During the first quarter of 2019, salary and employee benefit costs rose to $27.42 million compared to $26.20 million in the same quarter a year ago, primarily driven by annual merit-based pay increases and the recognition of $900 thousand resulting from the Company’s continued efforts to terminate its frozen defined benefit pension plan.

As of March 31, 2019, consolidated assets for the Company totaled $7.95 billion compared to $7.73 billion at December 31, 2018 and $7.57 billion at March 31, 2018. Loans totaled $4.00 billion at quarter end compared with loans of $3.98 billion at December 31, 2018, and $3.75 billion at March 31, 2018. Deposits totaled $6.35 billion at March 31, 2019, compared to $6.18 billion at December 31, 2018, and $6.19 billion at March 31, 2018. Shareholders’ equity rose to $1.11 billion as of March 31, 2019, compared with $1.05 billion at December 31, 2018, and $969.81 million at March 31, 2018.

“We are pleased to report a good first quarter for 2019 with solid earnings performance, as well as growth in loans and deposits,” said F. Scott Dueser, Chairman, President and CEO. “We continue to work diligently to reduce expenses to improve our bottom line while looking for acquisition opportunities to better utilize our strong capital position and increase our return to our shareholders.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares, Inc. is a financial holding company that through its subsidiary, First Financial Bank, N.A., operates multiple banking regions with 73 locations in Texas, including Abilene, Acton, Albany, Aledo, Alvarado, Beaumont, Boyd, Bridgeport, Brock, Burleson, Cisco, Cleburne, Clyde, Conroe, Cut and Shoot, Decatur, Eastland, El Campo, Fort Worth, Fulshear, Glen Rose, Granbury, Grapevine, Hereford, Huntsville, Keller, Kingwood, Magnolia, Mauriceville, Merkel, Midlothian, Mineral Wells, Montgomery, Moran, New Waverly, Newton, Odessa, Orange, Palacios, Port Arthur, Ranger, Rising Star, Roby, San Angelo, Southlake, Spring, Stephenville, Sweetwater, Tomball, Trent, Trophy Club, Vidor, Waxahachie, Weatherford, Willis, and Willow Park. The Company also operates First Financial Trust & Asset Management Company, N.A., with eight 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
	2019			2018
	Mar. 31,			Dec. 31,			Sept. 30,			June 30,			Mar. 31,
ASSETS
Cash and due from banks	$	176,278		$	207,835		$	164,998		$	178,217		$	130,979
Interest-bearing deposits in banks		197,758			40,812			34,511			99,499			67,060
Interest-bearing time deposits in banks		1,458			1,458			1,458			1,458			1,458
Fed funds sold		12,825			—			—			8,450			—
Investment securities		3,212,812			3,158,777			3,144,367			3,197,567			3,276,193
Loans		4,003,606			3,975,308			3,885,536			3,855,769			3,747,081
Allowance for loan losses		(51,585	)		(51,202	)		(50,871	)		(49,951	)		(49,499	)
Net loans		3,952,021			3,924,106			3,834,665			3,805,818			3,697,582
Premises and equipment		135,321			133,421			130,815			130,366			126,446
Goodwill		171,565			171,565			171,565			171,565			171,565
Other intangible assets		2,850			3,118			3,342			3,620			4,004
Other assets		83,007			90,762			85,510			88,910			92,162
Total assets	$	7,945,895		$	7,731,854		$	7,571,231		$	7,685,470		$	7,567,449
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits	$	2,165,745		$	2,116,107		$	2,146,984		$	2,105,953		$	2,111,116
Interest-bearing deposits		4,184,996			4,064,282			3,998,298			4,104,654			4,079,647
Total deposits		6,350,741			6,180,389			6,145,282			6,210,607			6,190,763
Borrowings		382,711			468,706			380,760			456,935			372,155
Other liabilities		104,921			29,464			49,450			32,300			34,717
Shareholders' equity		1,107,522			1,053,295			995,739			985,628			969,814
Total liabilities and shareholders' equity	$	7,945,895		$	7,731,854		$	7,571,231		$	7,685,470		$	7,567,449
	Quarter Ended
	2019			2018
	Mar. 31,			Dec. 31,			Sept. 30,			June 30,			Mar. 31,
INCOME STATEMENTS
Interest income	$	76,901		$	76,481		$	74,049		$	72,078		$	69,082
Interest expense		7,387			6,207			4,623			4,467			3,633
Net interest income		69,514			70,274			69,426			67,611			65,449
Provision for loan losses		965			1,800			1,450			1,105			1,310
Net interest income after provision for loan losses		68,549			68,474			67,976			66,506			64,139
Noninterest income		24,437			24,797			27,055			25,488			24,423
Noninterest expense		47,367			48,235			47,506			47,144			47,798
Net income before income taxes		45,619			45,036			47,525			44,850			40,764
Income tax expense		7,367			6,599			7,475			7,217			6,245
Net income	$	38,252		$	38,437		$	40,050		$	37,633		$	34,519
PER COMMON SHARE DATA
Net income—basic	$	0.56		$	0.57		$	0.59		$	0.56		$	0.51
Net income—diluted		0.56			0.56			0.59			0.55			0.51
Cash dividends declared		0.21			0.21			0.21			0.21			0.19
Book Value		16.33			15.55			14.71			14.57			14.34
Market Value	$	57.78		$	57.69		$	59.10		$	50.90		$	46.30
Shares outstanding—end of period		67,840,210			67,753,133			67,693,586			67,669,658			67,612,760
Average outstanding shares—basic		67,747,127			67,676,204			67,635,058			67,597,275			67,527,010
Average outstanding shares—diluted		68,143,431			68,095,612			68,053,724			67,924,168			67,799,545
PERFORMANCE RATIOS
Return on average assets		2.00	%		2.00	%		2.10	%		1.98	%		1.84	%
Return on average equity		14.51			15.18			16.00			15.53			14.74
Return on average tangible equity		17.34			18.38			19.42			18.94			17.82
Net interest margin (tax equivalent)		4.00			4.02			4.01			3.92			3.88
Efficiency ratio		49.46			49.69			48.12			49.42			51.76

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Quarter Ended
	2019			2018
	Mar. 31,			Dec. 31,			Sept. 30,			June 30,			Mar. 31,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	51,202		$	50,871		$	49,951		$	49,499		$	48,156
Loans charged off		(1,464	)		(2,081	)		(945	)		(949	)		(471	)
Loan recoveries		882			612			415			296			504
Net recoveries (charge-offs)		(582	)		(1,469	)		(530	)		(653	)		33
Provision for loan losses		965			1,800			1,450			1,105			1,310
Balance at end of period	$	51,585		$	51,202		$	50,871		$	49,951		$	49,499
Allowance for loan losses / period-end loans		1.29	%		1.29	%		1.31	%		1.30	%		1.32	%
Allowance for loan losses / nonperforming loans		177.41			176.22			194.25			182.31			209.80
Net charge-offs / average loans (annualized)		0.06			0.15			0.05			0.07			—
SUMMARY OF LOAN CLASSIFICATION
Special Mention	$	45,275		$	50,379		$	36,450		$	34,557		$	40,079
Substandard		73,158			75,919			81,073			79,170			83,976
Doubtful		—			—			—			—			—
Total classified loans	$	118,433		$	126,298		$	117,523		$	113,727		$	124,055
NONPERFORMING ASSETS
Nonaccrual loans	$	28,508		$	27,534		$	25,587		$	26,685		$	22,752
Accruing troubled debt restructured loans		472			513			513			514			514
Accruing loans 90 days past due		97			1,008			88			200			327
Total nonperforming loans		29,077			29,055			26,188			27,399			23,593
Foreclosed assets		647			577			671			705			1,276
Total nonperforming assets	$	29,724		$	29,632		$	26,859		$	28,104		$	24,869
As a % of loans and foreclosed assets		0.74	%		0.75	%		0.69	%		0.73	%		0.66	%
As a % of end of period total assets		0.37			0.38			0.35			0.37			0.33
OIL AND GAS PORTFOLIO INFORMATION
Oil and gas loans	$	107,335		$	113,536		$	112,039		$	103,381		$	86,218
Oil and gas loans as a % of total loans		2.68	%		2.86	%		2.88	%		2.68	%		2.30	%
Classified oil and gas loans		4,255			3,894			4,861			5,001			10,485
Nonaccrual oil and gas loans		669			1,048			1,825			1,629			1,460
Net charge-offs for oil and gas loans		—			—			—			—			—
Allowance for oil and gas loans as a % of oil and gas loans		3.22	%		3.23	%		3.28	%		3.48	%		3.64	%
CAPITAL RATIOS
Common equity Tier 1 capital ratio		19.86	%		19.47	%		19.19	%		18.68	%		18.43	%
Tier 1 capital ratio		19.86			19.47			19.19			18.68			18.43
Total capital ratio		21.00			20.61			20.34			19.81			19.58
Tier 1 leverage		12.08			11.85			11.57			11.14			10.90
Equity to assets		13.94			13.62			13.15			12.82			12.82

	Quarter Ended
	2019		2018
	Mar. 31,		Dec. 31,			Sept. 30,			June 30,		Mar. 31,
NONINTEREST INCOME
Trust fees	$	6,979	$	6,915		$	7,291		$	7,070	$	6,904
Service charges on deposits		5,176		5,713			5,690			5,375		4,884
ATM, interchange and credit card fees		6,840		6,962			7,533			7,041		6,996
Real estate mortgage fees		3,474		3,439			4,834			3,951		2,933
Net gain on sale of available-for-sale securities		—		8			58			67		1,221
Net gain (loss) on sale of foreclosed assets		69		(85	)		84			19		99
Net gain (loss) on sale of assets		—		5			(61	)		—		(91	)
Interest on loan recoveries		338		332			199			289		119
Other noninterest income		1,561		1,508			1,427			1,676		1,358
Total noninterest income	$	24,437	$	24,797		$	27,055		$	25,488	$	24,423
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	25,033	$	23,908		$	24,693		$	24,545	$	24,994
Loss from partial settlement of pension plan		900		1,546			—			—		—
Profit sharing expense		1,491		1,839			1,684			2,317		1,209
Net occupancy expense		2,763		2,583			2,900			2,806		2,883
Equipment expense		3,127		3,403			3,482			3,440		3,516
FDIC insurance premiums		538		565			570			632		566
ATM, interchange and credit card expenses		2,383		2,589			2,344			2,205		2,143
Legal, tax and professional fees		2,154		2,609			2,417			2,308		2,807
Audit fees		417		291			382			439		411
Printing, stationery and supplies		366		513			387			612		486
Amortization of intangible assets		269		223			279			384		387
Advertising and public relations		1,648		1,805			1,709			1,576		1,575
Operational and other losses		266		337			981			305		566
Software amortization and expense		923		755			540			479		524
Other noninterest expense		5,089		5,269			5,138			5,096		5,731
Total noninterest expense	$	47,367	$	48,235		$	47,506		$	47,144	$	47,798
TAX EQUIVALENT YIELD ADJUSTMENT	$	1,819	$	1,996		$	2,242		$	2,289	$	2,467

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Three Months Ended Mar. 31, 2019							Three Months Ended Dec. 31, 2018
	Average Balance		Tax Equivalent Interest		Yield / Rate			Average Balance		Tax Equivalent Interest		Yield / Rate
Interest-earning assets:
Fed funds sold	$	4,894	$	34		2.79	%	$	1,620	$	10		2.54	%
Interest-bearing deposits in nonaffiliated banks		100,258		585		2.36			41,511		240		2.30
Taxable securities		1,924,863		13,289		2.76			1,957,638		13,384		2.73
Tax exempt securities		1,226,457		11,279		3.68			1,206,728		11,482		3.81
Loans		3,973,108		53,534		5.46			3,918,360		53,361		5.40
Total interest-earning assets		7,229,580	$	78,721		4.42	%		7,125,857	$	78,477		4.37	%
Noninterest-earning assets		508,368							493,244
Total assets	$	7,737,948						$	7,619,101
Interest-bearing liabilities:
Deposits	$	4,144,091	$	6,662		0.65	%	$	3,961,582	$	5,092		0.51	%
Fed funds purchased and other borrowings		408,641		726		0.72			484,054		1,115		0.91
Total interest-bearing liabilities		4,552,732	$	7,388		0.66	%		4,445,636	$	6,207		0.55	%
Noninterest-bearing liabilities		2,116,080							2,169,069
Shareholders' equity		1,069,136							1,004,396
Total liabilities and shareholders' equity	$	7,737,948						$	7,619,101
Net interest income and margin (tax equivalent)			$	71,333		4.00	%			$	72,270		4.02	%
	Three Months Ended Sept. 30, 2018							Three Months Ended June 30, 2018
	Average Balance		Tax Equivalent Interest		Yield / Rate			Average Balance		Tax Equivalent Interest		Yield / Rate
Interest-earning assets:
Fed funds sold	$	3,377	$	19		2.29	%	$	2,228	$	13		2.32	%
Interest-bearing deposits in nonaffiliated banks		88,118		450		2.03			59,373		258		1.74
Taxable securities		1,943,125		12,594		2.59			2,007,949		12,719		2.53
Tax exempt securities		1,213,212		11,459		3.78			1,281,757		12,001		3.75
Loans		3,845,836		51,769		5.34			3,797,341		49,376		5.22
Total interest-earning assets		7,093,668	$	76,291		4.27	%		7,148,648	$	74,367		4.17	%
Noninterest-earning assets		490,155							486,837
Total assets	$	7,583,823						$	7,635,485
Interest-bearing liabilities:
Deposits	$	4,035,174	$	4,329		0.43	%	$	4,076,522	$	4,005		0.39	%
Fed funds purchased and other borrowings		399,026		294		0.29			434,239		462		0.43
Total interest-bearing liabilities		4,434,200	$	4,623		0.41	%		4,510,761	$	4,467		0.40	%
Noninterest-bearing liabilities		2,156,258							2,152,451
Shareholders' equity		993,365							972,273
Total liabilities and shareholders' equity	$	7,583,823						$	7,635,485
Net interest income and margin (tax equivalent)			$	71,668		4.01	%			$	69,900		3.92	%
	Three Months Ended Mar. 31, 2018
	Average Balance		Tax Equivalent Interest		Yield / Rate
Interest-earning assets:
Fed funds sold	$	6,215	$	27		1.78	%
Interest-bearing deposits in nonaffiliated banks		160,399		613		1.55
Taxable securities		1,826,391		11,354		2.49
Tax exempt securities		1,352,235		12,559		3.72
Loans		3,748,561		46,995		5.08
Total interest-earning assets		7,093,801	$	71,548		4.09	%
Noninterest-earning assets		497,049
Total assets	$	7,590,850
Interest-bearing liabilities:
Deposits	$	4,139,324	$	3,519		0.34	%
Fed funds purchased and other borrowings		357,414		113		0.13
Total interest-bearing liabilities		4,496,738	$	3,632		0.33	%
Noninterest-bearing liabilities		2,144,065
Shareholders' equity		950,047
Total liabilities and shareholders' equity	$	7,590,850
Net interest income and margin (tax equivalent)			$	67,916		3.88	%