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Midwestone Financial Group2 0 1 2 A N N U A L R E P O R T THE MORETHINGSCHANGETHE MOREWESTAYTHE SAME • ATM Locator • Deposit Checks • Photo Bill Payment • Transfer Funds • Customizable Security • Account Activity Alerts Putting You First with Putting You First with the latest technology. the latest technology. First Financial Bank has made great strides in 2012, especially in the area of technology. And while our capabilities have expanded, our priorities remain the same. First Financial will continue to put You First. Always. Our new services and technology only enhance our customers’ experience, making banking easier than ever. Customers can access their accounts instantly via the mobile app or online banking. Have a bill you want to pay at 2 a.m.? No problem. Use Photo Bill Pay. Point. Click. Paid. Running late and need to make a deposit? Try our new Deposit taking ATMs or mobile check deposit. And for businesses, Remote Deposit will save time, expense and trips to the bank. Banking with First Financial may look a little different this year. But at our core, we’re still the same. You’ll find the same friendly bankers at each location eager to help any way they can. From mortgage advice to a hot cup of coffee. Because whether you’re in the bank or on your phone, we have one priority – You First. Welcome to the Welcome to the future. Your bank future. Your bank is already here. is already here. In our quest to provide outstanding customer service, First Financial Bank has developed new, intuitive technologies to make banking simpler. Online banking, new Deposit taking ATMs and Remote Deposit for businesses allow customers to bank where they want, when they want. One exciting new innovation puts your accounts at your fingertips. The First Financial mobile banking app offers all the banking basics you could need and several capabilities that no other banks offer. Mobile banking aPP Features Photo bill Pay First Financial is the first bank in the country to offer a new and simple way to pay bills. Pay any bill or invoice with the snap of a photo. That’s it. There’s no setup required. Take a picture and we’ll process the payment for you. Need it paid quickly? We’ll expedite the payment. Mobile Check Deposit Need to deposit a check? Take a picture. Now it’s in your account. Just like that. Debit Card Management Manage funds. Monitor card activity. Add additional security. Don’t worry about others illicitly using your debit card again. transaction alerts If you’re interested in precise records of your banking, we can send SMS text messages every time a specific debit card transaction takes place. Our dedication to our customers will never change so as technology advances, we will continue to provide state-of-the art customer service options. These new mobile banking options which provide our clients 24/7 convenience are just one example of putting You First. a letter to our shareholders. “Putting customers first has always been part of our culture. It is one of the traits that we believe distinguish us within the banking industry.” – F. Scott Dueser, Chairman, President and CEOx The more things change, the more First Financial Yet with all this technology, we are still the bank stays the same. While we must always adjust that you can call your banker directly without our strategies and technologies to keep pace getting voice mail or an automated telephone with an ever-evolving world, the one thing we prompt that leaves you frustrated. When our will never change is our commitment to putting customers call, they reach a member of our our shareholders and customers first. That friendly team who is ready and prepared to meet commitment—a tradition we have upheld their financial needs. throughout our 122-year history—is what enables us to consistently produce solid financial results and outperform our peers. Last year was no different. Our goal is to “WOW” our customers. You can go to our website and read about the “WOWs” that happen every day. We are proud of our outstanding employees who eat, sleep and We continued perfecting our Customer Service breathe Customer Service First. First initiative to ensure that our customers receive the most outstanding service and products. We accomplishments look through our customers’ eyes to see how they Last year was the 26th consecutive year our company produced higher earnings, proving once again that doing what is right for our customers and communities is the right formula for serving our shareholders. Throughout the year, we received many different awards, but the one that makes us most proud was our selection by Bank Director magazine as the #2 top-performing publicly traded bank in the nation in the $1 billion to $5 billion asset category. We accepted this honor with great humility and are extremely gratified to have been placed in either the #1 or #2 position for the past four consecutive years. want to bank, rather than focusing on how we want them to bank. So we give our customers the choice of using phone center banking, mobile banking, online banking or Deposit taking ATMs. Our business customers have a complete menu of treasury management products, including Remote Deposit and bill pay. Or our customers may come into one of our inviting facilities to enjoy a cup of coffee and receive first-class service from a professional who is delighted to help them. Our new mobile banking product was a major success in 2012. It includes Remote Deposit and Picture Pay, which are free services that allow customers to take a picture of a check and make a deposit or take a picture of a bill and pay the vendor. We are proud to say that we are the first bank in the country to offer Picture Pay. A Letter To Our Shareholders :: Page 5 Financial results for 2012 Net income grew 8.6 percent to $74.2 million from $68.4 million in 2011. Basic earnings per share rose to $2.36 from $2.17 in the previous year. Net interest income, our largest source of $2.09 billion versus $1.79 billion at the end of 2011. Deposits totaled $3.63 billion,up 8.9 percent from $3.33 billion a year earlier. Shareholders’ equity at year-end was $557.0 million, up 9.5 percent from $508.5 million. revenue, grew 1.8 percent to $154.7 million from Our First Financial Trust & Asset Management $152.0 million, despite another year of extremely subsidiary experienced strong growth in 2012 as low interest rates. The low-interest-rate scenario it had for the previous several years. Total assets put pressure on our net interest margin, a key under management at year-end had a book value profitability metric that expresses net interest of $2.23 billion, a 16.8 percent increase from income as a percentage of average interest- $1.91 billion at the end of 2011. During the year, earning assets. Our net interest margin for the trust company’s fee income increased 14.2 2012 declined to 4.28 percent from 4.62 percent to $14.5 million from $12.7 million. percent for 2011. For the third consecutive year, the provision for loan losses declined, decreasing $3.1 million from 2011. This decline reflected a lower level of net charge-offs, nonperforming assets and classified loans. Noninterest income grew 11.3 percent to $57.2 million from $51.4 million in 2011. Noninterest expense rose 4.2 percent to $109.0 million from $104.6 million; part of that increase came from a $718,000 expense related to the Company’s consolidation of its charters and databases. strategic initiatives At the end of 2012, we consolidated our 11 bank charters into one charter. Due to the regulatory, compliance and technology complexities posed by the multiple charters, and to the opportunity for cost savings that consolidation offered, it was certainly time to make this change. Apart from the database consolidation, our banks will continue to operate as regional banks, with local management and decisions to benefit the customers and communities each bank serves. We look forward to realizing the cost savings and efficiencies of running just one database and the heightened As we have consistently done for many years, customer service that will come from these our company again outperformed its peer group backroom enhancements. of banks on several key financial metrics. Our return on average assets was 1.75 percent compared with 1.05 percent for our peers. Return on average equity was 13.85 percent compared to our peers’ ROE of 9.16 percent. Our net interest margin of 4.28 percent surpassed our peer group’s 3.66 percent, and our efficiency ratio (expenses as a proportion of revenues) of 48.14 percent beat the peer group’s 65.16 percent. In March of last year, Tom O’Neil was named Chairman and Chief Executive Officer of First Financial Bank, Cleburne, to strengthen our management team so that we would be able to take advantage of the growth potential in the Cleburne-area markets. Trent Swearengin was promoted to Chief Executive Officer and President of First Financial Bank, Eastland, to replace O’Neil. In September, Ron Butler was named Consolidated assets totaled $4.50 billion, an Executive Vice President and Chief Administrative increase of 9.3 percent from $4.12 billion at the Officer of First Financial Bankshares and was end of 2011. We achieved loan growth of 16.9 promoted to Chairman of the Board of Directors percent for the year, which better deployed our of First Financial Bank, Abilene. Marelyn Shedd lower-interest-rate assets and increased our net was also promoted, to President of First Financial interest income. Loans at year-end totaled Bank, Abilene. We are delighted to have these rising stars assume additional responsibilities with is that many community banks are seriously our company. With Ron moving up to the holding considering selling because they have doubts company, Bruce Hildebrand and I will have more about the ability of smaller banks like themselves time to focus on acquisitions. to overcome such challenges. We do think there Last year, we opened new branches in Grapevine, Abilene and Waxahachie, which took our company’s total locations up to 55. We are pleased with our new locations and the additional business that these expansions have brought. will be considerable consolidation in the industry, and we foresee many opportunities to grow our company by acquiring well-managed banks that have grown weary of the meaningless regulatory burdens created by our federal government. During 2013, we will open a new branch in the I am very encouraged by the resiliency of our H-E-B grocery store in San Angelo, as well as a people, who face these challenges with a positive new branch on I-20 in Weatherford. attitude and seek ways to make our company new Director We are pleased to announce that Tim Lancaster, President and Chief Executive Officer of Hendrick Health System, has accepted nomination for election as a director of the Company at our better. I am also encouraged by the large number of young professionals in the company who are shining stars moving into important positions and who will be able to take the Company to the next level in the years to come. I am honored to work with the outstanding professionals who comprise Annual Shareholders’ Meeting in April. Tim very this fine company and who embrace Customer capably manages a 525-bed hospital that employs Service First on a daily basis. I thank you, our shareholders, for your continued loyalty and support. As the world continues to change, you can remember that we stay the same by putting You First. F. Scott Dueser Chairman, President and CEO 2,800 people and serves a 29-county area of central and west Texas. He is a 1976 graduate of Texas Tech University with a degree in finance and a 1992 graduate of Texas Woman’s University with an M.S. degree in health care administration. Tim is an outstanding civic and professional leader and has been Chairman of the Board of the Texas Hospital Association, the Abilene Chamber of Commerce and the Texas Association of Voluntary Hospitals. He is on the board of Boy Scouts of America, Abilene Industrial Foundation and First Financial Bank, Abilene. Tim and his wife, Regina, are active members of First Baptist Church and live in Abilene. looking ahead Despite the near-term challenges of a stagnant national economy, an inept federal government, low interest rates that hurt our customers and reduce our net interest margin, and costly additional compliance burdens from new federal banking regulations, we do have a bright future and believe we can steer the Company through these challenges. If there is a silver lining, it A Letter To Our Shareholders :: Page 7 SELECTED FINANCIAL DATA IN THOUSANDS (except for share data) YEAR-END TOTAL ASSETS SHAREHOLDERS’ EQUITY NET INCOME BASIC EARNINGS (PER SHARE) CASH DIVIDENDS (PER SHARE) STOCK DIVIDENDS AND SPLITS YEAR-END BOOK VALUE (PER SHARE) YEAR-END MARKET VALUE (PER SHARE) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $2,092,571 $251,487 $35,305 $1.14 $0.61 5/4 split $8.13 $20.56 $2,315,224 $265,545 $39,171 $1.27 $0.67 – $8.56 $22.41 $2,733,827 $276,276 $44,023 $1.42 $0.73 4/3 split $8.89 $23.37 $2,850,165 $300,901 $46,029 $1.48 $3,070,309 $335,495 $49,490 $1.59 $3,212,385 $368,782 $53,164 $1.71 $3,279,456 $415,702 $53,797 $1.72 $3,776,367 $441,688 $59,659 $1.91 $0.79 $0.84 $0.89 $0.91 $0.91 – – – – – $9.67 $27.91 $10.77 $25.10 $11.82 $36.81 $13.31 $36.15 $14.06 $34.17 $4,120,531 $508,537 $68,369 $2.17 $0.95 3/2 split $16.16 $33.43 $4,502,012 $556,963 $74,225 $2.36 $0.99 Ten-Year Compound Growth Rate Adjusted for stock dividends and splits 8.49% 8.84% 8.14% 7.93% 6.25% FINANCIAL HIGHLIGHTS – – $17.68 $39.01 8.64% 9.89% IN THOUSANDS (except for share data) NET INCOME GROWTH (IN THOUSANDS) FOR THE YEAR 2011 2012 % INCREASE NeT INCome $68,369 $74,225 Basic Earnings (PER SHARE) $2.17 $2.36 Dividends Declared $29,790 $31,169 Dividends (PER SHARE) $0.95 $0.99 8.56% 8.76% 4.63% 4.21% 2008 $53,164 2009 $53,797 2010 $59,659 2011 $68,369 2012 $74,225 AVeRAGeS Assets Securities Loans Deposits $3,848,327 $4,237,917 10.12% $1,675,251 $1,907,517 13.86% $1,715,266 $1,909,890 11.35% $3,139,338 $3,388,101 7.92% Shareholders’ Equity $ 473,405 $ 535,932 13.21% RETURN ON AVERAGE EQUITY 2008 15.27% 2009 13.63% 2010 13.74% 2011 14.44% 2012 13.85% 2011 COMMON STOCK MARKET VALUE AND DIVIDEND DATA NET INTEREST MARGIN QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $34.19 $25.01 $33.43 Third $34.90 $24.56 $26.16 Second $37.16 $32.16 $34.45 First $35.55 $32.00 $34.25 $0.24 $0.24 $0.24 $0.23 2008 4.67% 2009 4.80% 2010 4.68% 2011 4.62% 2012 4.28% 2012 COMMON STOCK MARKET VALUE AND DIVIDEND DATA RETURN ON AVERAGE ASSETS QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $41.45 $34.66 $39.01 Third $37.00 $33.49 $36.03 Second $36.18 $30.50 $34.56 First $37.25 $33.07 $35.21 $0.25 $0.25 $0.25 $0.24 2008 1.74% 2009 1.72% 2010 1.75% 2011 1.78% 2012 1.75% IN THOUSANDS (except for share data) EFFICIENCY RATIO 2008 50.76% 2009 50.11% 2010 49.49% 2011 48.37% 2012 48.14% FOR THE YEAR 2011 2012 % INCREASE AT YeAR-eND Assets Securities Loans Deposits $4,120,531 $4,502,012 9.26% $1,844,998 $1,820,096 (1.35%) $1,786,544 $2,088,623 16.91% $3,334,798 $3,632,584 8.93% Shareholders’ Equity $ 508,537 $ 556,963 9.52% Book Value Per Share $16.16 $17.68 9.41% Trust Assets $1,911,682 $2,233,129 16.81% KeY RATIoS Return On Avg. Assets 1.78% 1.75% Return On Avg. Equity 14.44% 13.85% Year-End Equity/Assets 12.34% 12.37% Efficiency 48.37% 48.14% Selected Financial Data // Financial Highlights :: Page 9 ABILENE | CLYDE | MORAN | ALBANY | ODESSA SENIOR OFFICERS DIRECTORS DIRECTORS (continued) Ronald D. Butler II Chairman and CEO Marelyn Shedd President Tim Collard Executive Vice President Commercial Lending Ben McAnally Executive Vice President Treasury Management Charles E. Tennesson Executive Vice President CFO and Cashier Rick Waldraff Executive Vice President Senior Lender / Commercial Loans Michael Wolverton Executive Vice President Consumer Lending Ronald D. Butler II Chairman and CEO Marelyn Shedd President J. Michael Alexander President James M. Alexander & Co. Tucker S. Bridwell President Mansefeldt Investment Corp. Paul Cannon McMahon, Surovik, Suttle, P.C. Joe E. Canon, J.D. Executive Director Dodge Jones Foundation David Copeland President Shelton Family Foundation Joe Crawford President Abilene Aero, Inc. Mike Denny President Batjer and Associates Murray Edwards Principal The Edwards Group Allan D. Frizzell Executive Vice President Enrich Oil Corporation Tim Lancaster President and CEO Hendrick Health System Kirk Massey Investments Stanley Morris, Jr. Investments Mike Parsons Partner Momentum Operating Co. Leigh Taliaferro, M.D. Physician RONALD D. BuTLER II Chairman and CEO MAREYLN ShEDD President MAIN OFFICE 400 Pine St. Abilene, TX 79601 325.627.7200 CLEBURNE | BURLESON | ALVARADO | MIDLOTHIAN | CROWLEY | WAXAHACHIE SENIOR OFFICERS Tom O’Neil Chairman and CEO Matt Reynolds President Craig Beskow Executive Vice President and Cashier Jeffrey W. Taylor Executive Vice President Cynthia Allen Senior Vice President Lisa Roye Senior Vice President Darlene Walker Senior Vice President DIRECTORS Tom O’Neil Chairman and CEO Matt Reynolds President Albert A. Archer Vice Chairman Walls Industries, Inc. Ray Beavers General Manager and CEO United Cooperative Services Byron Black Investments Ronald D. Butler II First Financial Bankshares, Inc. Tim Lyness Lyness Construction, LP George Marti Marti Enterprises Dr. Joe Martin Cleburne Eye Clinic TOM O’NEIL Chairman and CEO MATT REYNOLDS President MAIN OFFICE 403 N. Main St. Cleburne, TX 76033 817.774.5100 CLEBURNE | BURLESON | ALVARADO | MIDLOTHIAN | CROWLEY | WAXAHACHIE IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $1,415,041 $473,985 $1,104,451 $128,428 $23,046 Dec. 31, 2012 $1.595,492 $607,501 $1,239,096 $137,000 $24,529 1.83% 1.68% 42.53% 42.83% 43% TAYLOR, CALLAHAN & SHACKELFORD COUNTIES DEPOSIT MARKET SHARE Abilene Clyde Moran Albany Odessa LoCATIoNS 400 Pine St., Abilene, TX 79601 1801 Antilley Rd., Abilene, TX 79606 4400 Buffalo Gap Rd., Abilene, TX 79606 4350 Southwest Dr., Abilene, TX 79606 920 N. Willis St., Abilene, TX 79603 3300 S. 14th St., Abilene, TX 79605 1010 N. Judge Ely Blvd., Abilene, TX 79601 701 Pine St., Abilene, TX 79601 1345 Barrow St., Abilene, TX 79605 2617 Antilley Rd., Abilene, TX 79606 1650 State Hwy. 351, Abilene, TX 79601 718 Elm St., Clyde, TX 79510 400 Ground St., Moran, TX 76464 232 N. Main St., Albany, TX 76430 2651 JBS Pkwy., Bldg. 4, Ste. F, Odessa, TX 79762 IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $308,584 $154,125 $278,334 $28,990 $3,954 Dec. 31, 2012 $336,050 $166,001 $300,104 $31,338 $4,396 1.37% 1.38% 56.20% 58.26% Cleburne Burleson Alvarado Midlothian Crowley Waxahachie 22% JOHNSON COUNTY & CITY OF MIDLOTHIAN DEPOSIT MARKET SHARE LoCATIoNS 403 N. Main St., Cleburne, TX 76033 200 N. Ridgeway Dr., Cleburne, TX 76033 1900 SW Wilshire Blvd., Burleson, TX 76028 201 E. Hwy. 67, Alvarado, TX 76009 1490 E. Main St., Midlothian, TX 76065 816 S. Crowley Rd., Crowley, TX 76036 101 Northgate Dr., Waxahachie, TX 75165 Bank Information :: Page 11 EASTLAND | RANGER | RISING STAR | CISCO SENIOR OFFICERS DIRECTORS DIRECTORS (continued) Trent B. Swearengin President and CEO David Bailey Executive Vice President Steve Simmel Senior Vice President Operations Terry Trout Senior Vice President and Cashier Dale Squiers, RPh Owner Eastland Drug Company Tommy Warford Turner, Seaberry and Warford Attorneys M.D. White, Jr. President and Owner Ace Hardware Store Eastland/Cisco Ronald D. Butler II Chairman Trent B. Swearengin President and CEO Doug Crawley Rancher, Real Estate Jim Farrar Attorney Jim Keffer President EBAA Iron Sales, Inc. Ronnie Ledbetter Owner Ledbetter Insurance Agency Mike T. Perry President Kinnaird, Rossander & Perry Agency, Inc. DIRECTORS (continued) Jerry Stevens Vice President and General Manager, Stevens 5-Star Car and Truck Center Johnny E. Trotter President and CEO Livestock Investors, Ltd. SENIOR OFFICERS DIRECTORS Mike Mauldin Chairman, President and CEO Mike Mauldin Chairman, President and CEO Kent Jackson Executive Vice President and Chief Credit Officer Adrian Alejandre Vice President and Cashier Ronald D. Butler II First Financial Bankshares, Inc. Steve Lewis, D.V.M. Manager and Sr. Partner Hereford Veterinary Clinic Kade Matthews Ranching and Investments Garth Merrick Board Member and Founder Merrick Pet Care, Inc. Sally Noyce Human Resources Manager Quality Distillers Grain Panhandle Express Craig Smith Rancher and Retired Chairman of the Board, President and CEO First Financial Bank, Hereford TRENT B. SWEARENGIN President and CEO MAIN OFFICE 201 E. Main St. Eastland, TX 76448 254.629.6100 HEREFORD MIKE MAuLDIN Chairman, President and CEO MAIN OFFICE 212 E. Third St. Hereford, TX 79045 806.363.8200 HEREFORD IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $189,317 $68,787 $164,643 $20,204 $2,963 Dec. 31, 2012 $223,340 $77,688 $196,595 $22,294 $3,033 1.64% 1.48% 47.36% 47.88% 58% EASTLAND COUNTY DEPOSIT MARKET SHARE LoCATIoNS 201 E. Main St., Eastland, TX 76448 106 W. Main St., Ranger, TX 76470 206 W. College St., Rising Star, TX 76471 2107 Conrad Hilton Blvd., Cisco, TX 76437 Eastland Ranger Rising Star Cisco IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $164,773 $104,069 $138,670 $15,249 $2,459 Dec. 31, 2012 $184,203 $114,116 $152,608 $16,194 $2,696 1.55% 1.63% 45.09% 46.72% 43% DEAF SMITH COUNTY DEPOSIT MARKET SHARE LoCATIoN 212 E. Third St., Hereford, TX 79045 Hereford Bank Information :: Page 13 HUNTSVILLE ROBERT PATE CEO FRED WREN President MAIN OFFICE 33 SH 75 North Huntsville, TX 77320 936.295.2224 MINERAL WELLS KENNETh A. WILLIAMSON Chairman, President and CEO MAIN OFFICE 1900 E. Hubbard St. Mineral Wells, TX 76067 940.327.5400 SENIOR OFFICERS DIRECTORS DIRECTORS (continued) Robert Pate CEO Fred Wren President Michelle Murray Executive Vice President and Cashier Renee N. Davis Investments Chris de Milliano Operations Manager Steely Lumber Company Robert C. Ernst, Jr. Owner Ernst Jewelers Morris V. Johnson Retired Educator Huntsville I.S.D. Curtis Montgomery, M.D. Physician Walter G. Nelson Chairman Robert Pate CEO Fred Wren President James E. Baine Investments Ronald D. Butler II First Financial Bankshares, Inc. Paul E. Cameron, Jr. Petroleum Engineer John J. Certa, Jr. Owner Collateral Protection, Inc. and Team Auto Group Casey Collum Owner Empire Truss, Ltd. SENIOR OFFICERS DIRECTORS Kenneth A. Williamson Chairman, President and CEO Kenneth A. Williamson Chairman, President and CEO Brad Seay Executive Vice President Lending Eddie Gregory Senior Vice President and Cashier Mike Mearse Senior Vice President Lending Spencer Baum, D.D.S. Baum Dental Clinic Ronald D. Butler II First Financial Bankshares, Inc. George Gault Attorney Gault & Gault Paul McGettes Chief Financial Officer Upham Oil & Gas Co., L.P. Terry L. Murphy President and CEO Murphy and Murphy, Inc. David Ramsey, M.D. Family Practice Center Albert Rincon Vice President of Operations Texas Packaging Company, Inc. MINERAL WELLS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO $154,731 $24,758 $2,191 $153,096 $25,814 $2,548 1.25% 1.43% 44.61% 46.43% Huntsville IN THOUSANDS ASSETS Dec. 31, 2011 $181,196 Dec. 31, 2012 $182,203 LOANS $88,380 $92,506 20% WALKER COUNTY DEPOSIT MARKET SHARE LoCATIoN 33 SH 75 North, Huntsville, TX 77320 IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $205,143 $110,073 $161,126 $24,024 $4,107 Dec. 31, 2012 $212,934 $113,732 $170,374 $26,464 $4,405 2.04% 2.04% 41.66% 39.67% 34% PALO PINTO COUNTY DEPOSIT MARKET SHARE LoCATIoN 1900 E. Hubbard St., Mineral Wells, TX 76067 Mineral Wells Bank Information :: Page 15 SAN ANGELO MIChAEL L. BOYD Chairman, President and CEO MAIN OFFICE 301 W. Beauregard Ave. San Angelo, TX 76903 325.659.5900 SENIOR OFFICERS DIRECTORS Michael L. Boyd Chairman, President and CEO Michael L. Boyd Chairman, President and CEO Jim Davidson Executive Vice President and Cashier Chuck Shore Executive Vice President Pat Cottle Senior Vice President Stephen Franco Senior Vice President Cindy George Senior Vice President Wes Masters Senior Vice President Reba Priddy Senior Vice President Ruth Wheeler Senior Vice President Bill Wiedenfeld Senior Vice President Ronald D. Butler II First Financial Bankshares, Inc. honorable Marilyn Aboussie Chief Justice, Retired W. Dan Cravy, M.D. Physician Rick Dehoyos Attorney Rick DeHoyos Law Firm Doug Eakman Owner Pecos Street Pharmacy Steve Eustis Commercial Real Estate Ron Giddiens Investments Partner, D&G Consulting DIRECTORS (continued) Joey henderson Past President Porter Henderson Implement Company, Inc. Robert D. housley President and Owner Housley Communications David F. Lupton President Angelo Glass & Mirror Company, Inc. Mary Jane Steadman Attorney Real Estate Investment Management SOUTHLAKE | TROPHY CLUB | KELLER | BRIDGEPORT | BOYD | DECATUR | GRAPEVINE SENIOR OFFICERS DIRECTORS DIRECTORS (continued) Mark L. Jones Chairman, President and CEO Mark L. Jones Chairman, President and CEO F. Mills Shallene Wise County Market President Les Mariotti Senior Vice President and Chief Financial Officer Ronald D. Butler II First Financial Bankshares, Inc. William Ray Cook, Jr., CPA Cook McDonald & Co. J. Sean Shope Senior Vice President Steve Sims Senior Vice President Ryan Wall Senior Vice President Jack Dortch Jack Dortch Farmers Insurance Agency K. Wayne Lee President DDFW Properties Martin Schelling Conifer Real Estate J. Gary Shelton Chain Supermarket Owner Real Estate Investor Terry Wilkinson Wyndham Properties, Ltd. DIRECTOR EMERITuS Derrell E. Johnson Former President and CEO Rady Associates Consulting Engineers MARK L. JONES Chairman, President and CEO MAIN OFFICE 151 W. Southlake Blvd. Southlake, TX 76092 817.410.2915 IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $419,866 $144,279 $355,955 $51,520 $7,718 Dec. 31, 2012 $468,287 $165,673 $406,830 $51,867 $8,285 1.95% 1.90% 40.78% 39.81% 19% TOM GREEN COUNTY DEPOSIT MARKET SHARE LoCATIoNS 301 W. Beauregard Ave., San Angelo, TX 76903 3471 Knickerbocker Rd., San Angelo, TX 76904 San Angelo IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $317,455 $191,362 $268,996 $41,299 $4,481 Dec. 31, 2012 $348,055 $232,205 $298,701 $41,637 $4,409 1.45% 1.34% 56.54% 60.17% Southlake Trophy Club Keller Bridgeport Boyd Decatur Grapevine WISE COUNTY DEPOSIT MARKET SHARE 16% 7% CITIES OF SOUTHLAKE, TROPHY CLUB, KELLER & GRAPEVINE DEPOSIT MARKET SHARE. LoCATIoNS 151 W. Southlake Blvd., Southlake, TX 76092 95 Trophy Club Dr., Trophy Club, TX 76262 891 Keller Parkway, Keller, TX 76248 909 Stevens St., Bridgeport, TX 76426 609 Rock Island Ave., Boyd, TX 76023 608 W. Hale Ave., Decatur, TX 76234 1015 NW Hwy., Grapevine, TX 76051 Bank Information :: Page 17 STEPHENVILLE | GRANBURY | GLEN ROSE | ACTON SENIOR OFFICERS DIRECTORS Ron N. Mullins Chairman, President and CEO Ron N. Mullins Chairman, President and CEO John Power Glen Rose Market President Bart Rodgers Granbury Market President Derecce howell Executive Vice President and Cashier Robert Lemons Executive Vice President Donna Feller Senior Vice President Mark Jackson Senior Vice President Vickie Pettit Senior Vice President Larry upshaw Senior Vice President Keith Brown Prime Building Components, LLC Ronald D. Butler II First Financial Bankshares, Inc. Bill hooks Autos – Real Estate John Moore Craft Associates, Inc. Ron Pack Ranching and Investments Bill Parham Boucher Morgan & Young CPAs Jerry Parham Parham’s Garage & Wrecker Service John Terrill Attorney Michael B. Williams MW Supply, Inc. RON N. MuLLINS Chairman, President and CEO MAIN OFFICE 2201 W. South Loop Stephenville, TX 76401 254.965.5036 SWEETWATER | ROBY | TRENT | MERKEL SENIOR OFFICERS DIRECTORS Kirby N. Andrews President and CEO Donnie Ruppert Executive Vice President and Cashier Rodney Foster Executive Vice President and Senior Lending Officer Debbie Anthony Senior Vice President Retail Operations Britt Stuart Senior Vice President and Roby Branch Manager J.V. Martin Chairman Kirby N. Andrews President and CEO Jeff Branson General Partner Williamsom-Branson Real Estate Louis Brooks, Jr. Rancher Ronald D. Butler II First Financial Bankshares, Inc. Ronnie Cox Investments Jay Lawrence President MAL Enterprises, Inc. Larry May May & Hrbacek CPAs Thomas L. Rees, Jr. Rees, Rees & Fuller Attorneys KIRBY N. ANDREWS President and CEO MAIN OFFICE 201 Elm St. Sweetwater, TX 79556 325.235.6600 STEPHENVILLE | GRANBURY | GLEN ROSE | ACTON SWEETWATER | ROBY | TRENT | MERKEL IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $361,579 $217,264 $307,551 $46,346 $6,354 Dec. 31, 2012 $378,355 $224,732 $325,384 $45,966 $6,752 1.84% 1.80% 49.44% 47.50% 22% ERATH, HOOD & SOMERVELL COUNTIES DEPOSIT MARKET SHARE LoCATIoNS 2201 W. South Loop, Stephenville, TX 76401 1875 Lingleville Rd., Stephenville, TX 76401 2007 East Highway 377, Granbury, TX 76049 1600 S. Morgan St., Granbury, TX 76048 400 NE Big Bend Trail, Glen Rose, TX 76043 2915 Fall Creek Highway, Acton, TX 76049 Stephenville Granbury Glen Rose Acton IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $174,065 $79,074 $157,494 $15,249 $2,688 Dec. 31, 2012 $211,053 $124,899 $165,840 $16,397 $3,108 1.62% 1.63% 49.74% 46.67% 34% NOLAN & FISHER COUNTIES DEPOSIT MARKET SHARE LoCATIoNS 201 Elm St., Sweetwater, TX 79556 123 N. Concho St., Roby, TX 79543 117 N. Main St., Trent, TX 79561 301 Edwards St., Merkel, TX 79536 Sweetwater Roby Trent Merkel Bank Information :: Page 19 WEATHERFORD | ALEDO | WILLOW PARK | BROCK | FORT WORTH SENIOR OFFICERS DIRECTORS Jay Gibbs Chairman, President and CEO Jay Gibbs Chairman, President and CEO Justin hooper Executive Vice President Mike Carter Senior Vice President Lori hill Senior Vice President Kent hudson Senior Vice President Jimmie Sue Lawson Senior Vice President David Milhollon Senior Vice President Toby Spivey Assistant Vice President and Cashier Jaime Adams Senior Vice President Briggs Freeman Sotheby’s Realty Greg L. Barron President G.L. Barron Company, Inc. Ronald D. Butler II First Financial Bankshares, Inc. Dal DeWees Hirschfeld Holdings, LP Clay hicks Oil and Gas Investments Nan Kingsley President Bluestem Studios, Inc. Stephen E. Milliken C.D. Hartnett Company Mike White, O.D. Therapeutic Optometrist JAY GIBBS Chairman, President and CEO MAIN OFFICE 101 N. Main St. Weatherford, TX 76086 817.596.0307 IN THOUSANDS ASSETS LOANS DEPOSITS EQUITY NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2011 $403,252 $155,146 $342,739 $40,449 $5,807 Dec. 31, 2012 $421,584 $169,530 $354,719 $42,411 $6,375 1.53% 1.61% 52.20% 52.67% 24% PARKER COUNTY DEPOSIT MARKET SHARE LoCATIoNS 101 N. Main St., Weatherford, TX 76086 101 College Park Dr., Weatherford, TX 76086 1214 N. Main St., Weatherford, TX 76086 505 FM 1187 N., Aledo, TX 76008 4100 E. I-20, Willow Park, TX 76087 1100 FM 1189, Brock, TX 76066 550 Bailey Ave., Ste. 300, Fort Worth, TX 76107 Weatherford Aledo Willow Park Brock Fort Worth Bank Information :: Page 21 Clay Trumble, Dennis Steckly, Kay Berry, Larry Williams, Gary D. Tucker – First Technology Services – SENIOR OFFICERS DIRECTORS (continued) Michael L. Boyd Chairman, President and CEO First Financial Bank, San Angelo Jay Gibbs Chairman, President and CEO First Financial Bank, Weatherford Mike Mauldin Chairman, President and CEO First Financial Bank, Hereford Trent B. Swearengin President and CEO First Financial Bank, Eastland Les Mariotti Senior Vice President and Chief Financial Officer First Financial Bank, Southlake Murray Edwards Principal The Edwards Group Ron Giddiens Investments Partner, D&G Consulting Main Office: Abilene 400 Pine St., Abilene, TX 79601 325.627.7195 Gary D. Tucker President and CEO Kay Berry Senior Vice President Deposit Operations Dennis Steckly Senior Vice President Production Services Clay Trumble Senior Vice President Credit Administration Larry Williams Senior Vice President Infrastructure Services First Technology Services, Inc. (FTS) is the shared services company for First Financial Bankshares, Inc. The Company’s mission is to maximize efficiencies and control costs for common functions within the banks while providing the best possible customer service to our internal and external customers. FTS plays a key role in customer service functions within the banks through the customer call center and innovative technology for online banking, mobile banking, automatic bill pay services, DIRECTORS backroom operations and other technology-based banking services. FTS also supports employees with classroom and online technology training and a responsive technology help desk. FTS provides more than 100 technology applications to the Company and its family of 11 regions and the Trust Company. Services include check processing, deposit operations, a help desk, desktop support, network services, server support, software support, information security, computer operations, business continuity planning, loan and credit operations, loan document preparation and the corporate call center. Gary L. Webb Chairman of the Board First Technology Services, Inc. Executive Vice President Operations First Financial Bankshares, Inc. Gary D. Tucker President and CEO First Technology Services, Inc. F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. Ronald D. Butler II Executive Vice President and Chief Administrative Officer First Financial Bankshares, Inc. J. Bruce hildebrand Executive Vice President and Chief Financial Officer First Financial Bankshares, Inc. Wayne Chowning, Richard Young, David Castleberry, Barbara Hill, David Byrd, Konrad S. Halbert, Kirk W. Thaxton – First Financial Trust & Asset Management Company – Locations Abilene 400 Pine St. 325.627.7100 Fort Worth 550 Bailey Ave., Ste. 300 817.410.4970 San Angelo 301 W. Beauregard 325.659.5987 Stephenville 2201 W. South Loop 254.918.6262 Odessa 2651 JBS Parkway, Bldg. 4, Ste. E 432.367.8900 Sweetwater 201 Elm St. 325.235.6640 Trust Assets (in millions) 2008 $1,631 2009 $1,664 2010 $1,783 2011 $1,912 2012 $2,233 $0 Trust Fees (in millions) 2008 $9.44 2009 $9.08 2010 $10.81 2011 $12.67 2012 $14.46 $0 $1,000 $2,000 $7 $14 Trust Net Income (in millions) 2008 $2.810 2009 $2.631 2010 $3.254 2011 $4.176 2012 $5.183 $0 SENIOR OFFICERS DIRECTORS Kirk W. Thaxton Chairman, President and CEO David Byrd Executive Vice President Manager, San Angelo David Castleberry Executive Vice President Manager, Stephenville Konrad S. halbert Executive Vice President Manager, Fort Worth Barbara hill Executive Vice President Manager, Odessa Richard Young Executive Vice President Manager, Abilene Wayne Chowning Senior Vice President Manager, Sweetwater Larry Cleveland Senior Vice President Manager, Operations David B. Pitzer Senior Vice President Manager, Real Property Randy Spiva Senior Vice President Manager, Oil & Gas Kirk W. Thaxton Chairman, President and CEO First Financial Trust & Asset Management Company, N.A. Sarah Campbell Portfolio Manager Joe E. Canon, J.D. Executive Director Dodge Jones Foundation David Copeland President Shelton Family Foundation Ronnie Cox Investments F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. David F. Lupton President Angelo Glass & Mirror Company. Inc. Bill Parham Boucher Morgan & Young CPAs Robert S. Patterson Former President and CEO First Financial Trust & Asset Management Company, N.A. Advisory Director John L. Beckham Beckham Rector & Eargle LLP $3 $6 First Technology Services // Trust & Asset Management :: Page 23 Front Row - Johnny E. Trotter, F. Scott Dueser, Steven L. Beal Back Row - Kade Matthews, Murray Edwards, Joe E. Canon, David Copeland, Tucker S. Bridwell, Ron Giddiens – Board Of Directors – COMMITTEES Board Member Year Committee 1. Executive Committee: F. Scott Dueser, Chairman 2. Audit Committee: David Copeland, Chairman 3. Compensation Committee: Steven Beal, Chairman 4. Nominating/Corporate Governance Committee: Tucker S. Bridwell, Chairman 5. Asset and Liability Committee F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. Steven L. Beal Retired President and COO Concho Resources Inc. Tucker S. Bridwell, CPA* President Mansefeldt Investment Corp. Joe E. Canon, J.D. Executive Director Dodge Jones Foundation David Copeland, CPA President, SIPCO, Inc. and Shelton Family Foundation Murray Edwards Principal, The Edwards Group Ron Giddiens Investments Partner, D&G Consulting Kade Matthews Ranching and Investments Johnny E. Trotter President and CEO Livestock Investors, Ltd. * Lead Director 1991 1 2010 1, 2, 3, 4 2007 1, 2, 4 1996 3, 5 1998 1, 2, 4, 5 2006 1, 2, 4 2009 2, 5 1998 3 2003 1, 3, 4 Front Row - F. Scott Dueser, Gary S. Gragg, Gary L. Webb, J. Bruce Hildebrand, CPA Back Row - Ronald D. Butler II, Luke Longhofer, Kirk W. Thaxton, Michele P. Stevens, Courtney Jordan, MarnaYerigan, Brandon Harris, Bob Goodner – Corporate Information – Officers F. Scott Dueser Chairman of the Board, President and CEO Ronald D. Butler II Executive Vice President and Chief Administrative Officer J. Bruce hildebrand, CPA Executive Vice President and Chief Financial Officer Gary S. Gragg Executive Vice President Lending Gary L. Webb Executive Vice President Operations Marna Yerigan Executive Vice President Lending Bob Goodner Senior Vice President Compliance Officer Brandon harris Senior Vice President Appraisal Services Courtney Jordan Senior Vice President Training and Education Luke Longhofer Senior Vice President Loan Review Officer Michele P. Stevens Senior Vice President Advertising and Marketing Annual Meeting Tuesday, April 23, 2013 Abilene Civic Center 1100 N. Sixth St. Abilene, TX 79601 10:30 a.m. Corporate Office 400 Pine St. Abilene, TX 79601 325.627.7155 800.588.7000 www.ffin.com Corporate Mailing Address P.O. Box 701 Abilene, TX 79604 Common Stock Listing The NASDAQ Global Select Market Symbol: FFIN Independent Public Auditors Ernst & Young LLP Registrar and Transfer Company Website www.rtco.com For Financial and Investor Information: J. Bruce hildebrand Executive Vice President and Chief Financial Officer 325.627.7155 Send Certificates for Transfer and Address Changes to: Registrar and Transfer Company 10 Commerce Dr. Cranford, NJ 07016–3572 Transfer Agent Registrar and Transfer Company 800.368.5948 Address Shareholder Inquiries to: Registrar and Transfer Company Investor Relations Department 10 Commerce Dr. Cranford, NJ 07016 info@rtco.com www.ffin.com Certain statements contained in this annual report 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 or saving 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 and Filings” on the Company’s website or by writing or calling the Company at 325.627.7155. Except as otherwise stated in this annual report, the Company does not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise. Note: Market share data is calculated from June 30, 2012, deposit information compiled by the Federal Deposit Insurance Corporation. Board Of Directors // Corporate Information :: Page 25 – First Financial Bankshares Locations – Abilene* ...............325.627.7200 Fort Worth* .........817.596.0307 San Angelo* .........325.659.5900 Acton ..................817.573.6900 Glen Rose ...........254.897.4808 Southlake ............817.410.2915 Albany ..................325.627.7200 Granbury ............817.573.6900 Stephenville* .......254.965.5036 Aledo ..................817.596.0307 Grapevine ...........817.410.2915 Sweetwater* ........325.235.6600 Alvarado .............817.556.5000 Hereford .............806.363.8200 Trent ...................325.235.6600 Boyd ....................817.410.2915 Huntsville ...........936.295.2224 Trophy Club .......817.410.2915 Bridgeport ..........817.410.2915 Keller ...................817.410.2915 Waxahachie ........972-723-7150 Brock ..................817.596.0307 Merkel .................325.235.6600 Weatherford .......817.596.0307 Burleson ...............817.556.5000 Midlothian .........817.556.5000 Willow Park .......817.596.0307 Cisco ...................254.629.6111 Mineral Wells ......940.327.5400 Cleburne .............817.774.5100 Moran .................325.627.7200 Clyde ...................325.627.7200 Odessa* ................432.367.8912 Crowley ..............817.556.5000 Ranger ................254.629.6100 Decatur ...............817.410.2915 Rising Star ........... 254.629.6100 Eastland ..............254.629.6100 Roby ....................325.235.6600 * Trust Office and Bank locations San Angelo* .........325.659.5900 Southlake ............817.410.2915 Stephenville* .......254.965.5036 Sweetwater* ........325.235.6600 Trent ...................325.235.6600 Trophy Club .......817.410.2915 Waxahachie ........972-723-7150 Weatherford .......817.596.0307 Willow Park .......817.596.0307 * Trust Office and Bank locations Bank Locations :: Page 27 400 Pine St., Abilene, TX 79601 | 325.627.7200 | www.ffin.com
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