First Financial Bankshares(FFIN) - 2025 Q2 - Quarterly Results

markdown [Financial Highlights](index=1&type=section&id=Financial%20Highlights) First Financial Bankshares reported strong Q2 2025 results, driven by significant net earnings growth and improved margins Q2 2025 Key Earnings Metrics | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Net Earnings | $66.66 M | $52.49 M | $61.35 M | | Diluted EPS | $0.47 | $0.37 | $0.43 | - CEO F. Scott Dueser attributed the positive results to **healthy loan and deposit growth**, **improved margin**, and **increased trust revenue**, expressing a **good outlook** for the rest of the year[2](index=2&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) Q2 2025 financial performance was strong, marked by net interest income growth, margin expansion, and improved efficiency [Net Interest Income and Margin](index=1&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income for Q2 2025 rose significantly, with tax-equivalent net interest margin expanding to **3.81%** Net Interest Income and Margin Performance | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Net Interest Income | $123.73 M | $103.27 M | $118.79 M | | Net Interest Margin (Tax Equiv.) | 3.81% | 3.48% | 3.74% | - Average interest-earning assets grew to **$13.34 billion**, up from **$12.23 billion** in the same quarter a year ago[2](index=2&type=chunk) [Credit Quality and Provision for Credit Losses](index=1&type=section&id=Credit%20Quality%20and%20Provision%20for%20Credit%20Losses) Credit quality showed decreased provisions for credit losses, despite an increase in net charge-offs and classified loans Credit Quality Indicators (Q2 2025 vs. Q2 2024) | Indicator | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Provision for Credit Losses | $3.13 M | $5.89 M | | Allowance for Credit Losses | $102.79 M | $95.17 M | | Allowance / Loans | 1.27% | 1.27% | | Net Charge-offs | $720 K | $302 K | | Nonperforming Assets / Loans & Foreclosed Assets | 0.79% | 0.81% | [Noninterest Income](index=1&type=section&id=Noninterest%20Income) Noninterest income grew modestly, primarily driven by increased trust fee income and improved mortgage income - Trust fee income increased to **$12.75 million** from **$11.71 million** YoY, as trust assets managed grew to **$11.46 billion**[5](index=5&type=chunk) - Mortgage income rose to **$4.13 million** from **$3.69 million** YoY due to improved origination volume and margins[10](index=10&type=chunk) - Other noninterest income decreased due to a one-time **$723 thousand** BOLI settlement payment recognized in Q2 2024[10](index=10&type=chunk) [Noninterest Expense and Efficiency](index=2&type=section&id=Noninterest%20Expense%20and%20Efficiency) Noninterest expense increased due to higher personnel and technology costs, yet the efficiency ratio improved significantly Expense and Efficiency (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Noninterest Expense | $71.74 M | $65.01 M | | Salary, Commissions, & Benefits | $42.58 M | $37.47 M | | Efficiency Ratio | 44.97% | 47.41% | - The increase in salary costs was driven by merit-based pay increases, higher profit sharing, and incentive accruals tied to increased net income[10](index=10&type=chunk) - Other expense increases were noted in software amortization due to investments in new loan origination and account opening platforms[10](index=10&type=chunk) [Balance Sheet and Capital Position](index=2&type=section&id=Balance%20Sheet%20and%20Capital%20Position) The company's balance sheet expanded, with total assets, loans, and deposits showing healthy growth [Asset, Loan, and Deposit Growth](index=2&type=section&id=Asset,%20Loan,%20and%20Deposit%20Growth) Total assets, loans, and deposits all grew significantly year-over-year, reflecting robust balance sheet expansion Balance Sheet Growth (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Assets | $14.38 B | $13.16 B | | Total Loans | $8.07 B | $7.52 B | | Deposits & Repurchase Agreements | $12.50 B | $11.55 B | [Shareholders' Equity and Capital Ratios](index=2&type=section&id=Shareholders'%20Equity%20and%20Capital%20Ratios) Shareholders' equity increased, benefiting from reduced unrealized losses on securities, maintaining strong capital ratios - Shareholders' equity grew to **$1.74 billion** at June 30, 2025, from **$1.52 billion** at June 30, 2024[8](index=8&type=chunk) - The unrealized loss on the securities portfolio (net of tax) decreased to **$373.46 million** from **$441.56 million** YoY[8](index=8&type=chunk) Key Capital Ratios (as of June 30, 2025) | Ratio | Value | | :--- | :--- | | Common equity Tier 1 capital ratio | 19.16% | | Tier 1 capital ratio | 19.16% | | Total capital ratio | 20.35% | | Tier 1 leverage ratio | 12.61% | [Consolidated Financial Statements and Selected Data](index=5&type=section&id=Consolidated%20Financial%20Statements%20and%20Selected%20Data) This section provides detailed unaudited consolidated financial statements and supplementary data tables for analysis [Consolidated Financial Summary (Quarterly)](index=5&type=section&id=Consolidated%20Financial%20Summary%20(Quarterly)) Presents key unaudited consolidated financial data for Q2 2025 and preceding quarters, including balance sheet and income statement Q2 2025 Financial Summary | Metric | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | :--- | | **Balance Sheet** | | | | | Total Assets | $14,376,841 | $14,312,114 | $13,164,075 | | Net Loans | $7,972,152 | $7,844,531 | $7,424,563 | | Total Deposits | $12,448,416 | $12,466,771 | $11,409,157 | | Shareholders' Equity | $1,737,352 | $1,680,261 | $1,519,026 | | **Income Statement** | | | | | Net Interest Income | $123,730 | $118,789 | $103,273 | | Net Income | $66,658 | $61,346 | $52,485 | | **Per Share Data** | | | | | Diluted EPS | $0.47 | $0.43 | $0.37 | | Book Value | $12.14 | $11.75 | $10.63 | | **Performance Ratios** | | | | | Return on Average Assets | 1.89% | 1.78% | 1.61% | | Net Interest Margin (TE) | 3.81% | 3.74% | 3.48% | [Consolidated Financial Summary (Year-to-Date)](index=6&type=section&id=Consolidated%20Financial%20Summary%20(Year-to-Date)) Presents unaudited consolidated income statement and performance ratios for the six months ended June 30, 2025 and 2024 Six Months Ended June 30 Financial Summary | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net Interest Income | $242,519 | $203,514 | | Net Income | $128,004 | $105,882 | | Diluted EPS | $0.89 | $0.74 | | Return on Average Assets | 1.83% | 1.62% | | Net Interest Margin (TE) | 3.78% | 3.41% | | Efficiency Ratio | 45.65% | 47.88% | [Selected Financial Data (Credit & Loans)](index=7&type=section&id=Selected%20Financial%20Data%20(Credit%20%26%20Loans)) Provides detailed breakdowns of credit quality, loan composition, and nonperforming asset trends over recent quarters Loan Portfolio Composition (June 30, 2025) | Loan Category | Amount (in thousands) | % of Total | | :--- | :--- | :--- | | Commercial | $1,508,291 | 18.7% | | Real Estate | $5,632,974 | 69.8% | | Consumer | $847,546 | 10.5% | | Agricultural | $86,133 | 1.1% | | **Total Loans** | **$8,074,944** | **100.0%** | Nonperforming Assets (June 30, 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Nonaccrual loans | $63,142 | | Total nonperforming loans | $63,219 | | Foreclosed assets | $489 | | **Total nonperforming assets** | **$63,708** | | As a % of loans and foreclosed assets | 0.79% | [Selected Financial Data (Capital & Operations)](index=8&type=section&id=Selected%20Financial%20Data%20(Capital%20%26%20Operations)) Details capital ratios and granular breakdowns of noninterest income and expense components for various periods Noninterest Income Breakdown (Q2 2025) | Category | Amount (in thousands) | | :--- | :--- | | Trust fees | $12,746 | | Service charges on deposits | $6,126 | | Debit card fees | $5,218 | | Gain on sale and fees on mortgage loans | $4,126 | | Other | $4,657 | | **Total Noninterest Income** | **$32,873** | Noninterest Expense Breakdown (Q2 2025) | Category | Amount (in thousands) | | :--- | :--- | | Salaries, commissions and employee benefits | $42,575 | | Software amortization and expense | $4,020 | | Net occupancy expense | $3,600 | | Debit card expense | $3,308 | | Other | $18,232 | | **Total Noninterest Expense** | **$71,735** | [Average Balances and Net Interest Margin Analysis](index=10&type=section&id=Average%20Balances%20and%20Net%20Interest%20Margin%20Analysis) Contains detailed tables analyzing average asset and liability balances, interest income/expense, and net interest margin calculations Six Months Ended June 30, 2025 vs 2024 - Average Balances | Metric | 2025 (Avg. Balance) (in thousands) | 2024 (Avg. Balance) (in thousands) | | :--- | :--- | :--- | | Total Interest-Earning Assets | $13,249,332 | $12,295,350 | | Total Interest-Bearing Liabilities | $9,007,633 | $8,292,131 | | Net Interest Margin (TE) | 3.78% | 3.41% | [Company Information and Disclosures](index=2&type=section&id=Company%20Information%20and%20Disclosures) This section provides background on First Financial Bankshares, Inc. and standard forward-looking statements disclaimer [About First Financial Bankshares, Inc.](index=2&type=section&id=About%20First%20Financial%20Bankshares,%20Inc.) First Financial Bankshares, Inc. is a Texas-based financial holding company operating 79 banking locations and other subsidiaries - The company is a Texas-based financial holding company with **79 banking locations**, a trust company, and a technology services subsidiary[9](index=9&type=chunk) - The company's stock trades on The NASDAQ Global Select Market under the ticker symbol FFIN[11](index=11&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing materially - The report includes forward-looking statements that are subject to risks and uncertainties, meaning actual results could differ materially[13](index=13&type=chunk) - Key risks include competition, interest rate policies, economic changes, and other factors described in SEC filings[13](index=13&type=chunk)