First Financial Bankshares(FFIN) - 2024 Q4 - Annual Report

Workforce and Employee Benefits - The company employed approximately 1,500 employees as of December 31, 2024, with 1,400 full-time and 100 part-time[40]. - The company incurred expenses totaling approximately $30.00 million for employee benefits in 2024, compared to$ 19.19 million in 2023, reflecting a significant increase[46]. - The company has a diverse workforce, with 70% of employees being female and 46% identifying as minorities, veterans, or disabled[44]. - The average tenure of employees with the company is approximately seven years, indicating strong employee retention[45]. - The company has a board of directors comprising twelve members, including one Hispanic, one African-American, and three females, reflecting its commitment to diversity[48]. Community Engagement - The company has a strong focus on community involvement, contributing approximately 5,000 hours of community service in 2024[47]. - The company operates under a community banking model, emphasizing personal relationships with customers, which is critical for its strategy execution[39]. Financial Performance and Capital Management - Interest income for Q4 2024 was $165,792,000, an increase from$ 142,207,000 in Q4 2023, representing a growth of 16.6% year-over-year[372]. - Net interest income after provision for credit losses in Q4 2024 was $115,114,000, compared to$ 97,508,000 in Q4 2023, reflecting a year-over-year increase of 17.9%[372]. - Noninterest income for Q4 2024 was $30,977,000, slightly down from$ 21,979,000 in Q4 2023, indicating a decrease of 40.9%[372]. - Net earnings for Q4 2024 reached $62,321,000, up from$ 45,982,000 in Q4 2023, marking an increase of 35.4%[372]. - Earnings per share (diluted) for Q4 2024 was $0.43, compared to$ 0.32 in Q4 2023, which is a growth of 34.4%[372]. - The provision for credit losses in Q4 2024 was $1,003,000, significantly lower than$ 2,276,000 in Q4 2023, indicating improved credit quality[372]. - Total interest expense in Q4 2024 was $49,675,000, compared to$ 44,699,000 in Q4 2023, reflecting an increase of 11.1%[372]. - Cash dividends declared in Q4 2024 remained stable at $0.18 per share, consistent with Q4 2023[372]. - The book value at period-end for Q4 2024 was$ 11.24, an increase from $10.50 in Q4 2023, representing a growth of 7.0%[372]. - The common stock sales price closed at$ 36.05 in Q4 2024, up from $30.30 in Q4 2023, indicating a year-over-year increase of 19.1%[372]. Regulatory Compliance and Assessments - First Financial Bank is subject to a risk-based assessment system for FDIC deposit insurance, with higher premiums for institutions classified as higher risk[61]. - The Dodd-Frank Act requires that institutions with over$ 10 billion in assets, like First Financial Bank, cannot utilize future credits to offset FDIC assessments[65]. - The Basel III Rules established minimum capital ratios, and failure to meet these ratios can limit activities such as dividend payments and share repurchases[85]. - First Financial Bank's subsidiary bank must maintain adequate capital above regulatory guidelines to pay dividends, and cannot pay dividends if it would become undercapitalized[71]. - The FDIC uses performance and loss severity scores to calculate initial assessment rates for institutions with $10 billion or more in assets[66]. - The subsidiary bank was classified as "well capitalized" as of December 31, 2024, meeting all regulatory capital requirements[89]. - The minimum CET1 ratio to risk-weighted assets is 7.0%, with a capital conservation buffer of 2.5%[89]. - The minimum Tier 1 capital ratio is 8.5%, which includes the capital conservation buffer[89]. - The total capital ratio must be at least 10.5%, combining Tier 1 and Tier 2 capital[89]. - The bank is subject to regulatory assessments under the Community Reinvestment Act, receiving an "Outstanding" rating in its most recent evaluation[99]. - The Consumer Financial Protection Bureau regulates the subsidiary bank due to its assets exceeding$ 10 billion, ensuring compliance with consumer protection laws[110]. - The bank must comply with various federal and state consumer laws, which include the Truth in Lending Act and the Equal Credit Opportunity Act[109]. - The Federal Reserve Board has the authority to prohibit unsafe banking practices and can impose civil money penalties of up to $1 million per day for violations[94]. - The bank is required to monitor and report suspicious activities under the Bank Secrecy Act, which includes enhanced due diligence measures[100]. Special Assessments and Capital Structure - In Q4 2023, the FDIC imposed a special assessment of$ 1.75 million on First Financial Bank, which was updated to $2.06 million in Q1 2024, to be paid over ten quarters starting Q2 2024[64]. - As of December 31, 2024, First Financial Bank had a total risk-based capital ratio of 20.00%, a tier 1 capital to risk-weighted asset ratio of 18.83%, and a CET1 to risk-weighted assets ratio of 18.83%[87]. - The subsidiaries paid aggregate dividends of$ 55.50 million in 2024 and $133.50 million in 2023, with the potential to declare an additional$ 428.66 million from retained net profits without regulatory approvals as of December 31, 2024[76]. - As of December 31, 2024, First Financial Bank had no non-cumulative perpetual preferred stock or subordinated notes[83]. - The Basel III Rules allow for a one-time election to exclude certain accumulated other comprehensive income items from capital calculations, which First Financial Bank has utilized[84]. Accounting and Financial Disclosure - No changes or disagreements with accountants on accounting and financial disclosure reported[374].