First Financial Bankshares Annual Report 2012

FY2012 Annual Report · First Financial Bankshares

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2 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

–

$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

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

$0.23

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

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

$0.24

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

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

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

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

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%

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

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

SENIOR OFFICERS

DIRECTORS

DIRECTORS (continued)

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

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

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

Trust Fees (in millions)

2008

$9.44

2009

$9.08

2010

$10.81

2011

$12.67

2012

$14.46

$1,000

$2,000

$14

Trust Net Income (in millions)

2008

$2.810

2009

$2.631

2010

$3.254

2011

$4.176

2012

$5.183

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

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

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

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