First Financial Bankshares
Annual Report 2017

Plain-text annual report

Reaching out to our communities in need. Rising to the Challenges O F 2 0 1 7 In the days prior to the Labor Day weekend, south Texas experienced the wrath of Hurricane Harvey. High winds and torrential rains brought flooding and devastation to the region on a monumental scale. First Financial was not spared. Twenty members of our banking family lost their homes, while many others were stranded by the high water. As well, our ability to offer banking services to customers in the region was disabled. But, First Financial associates were not deterred. We rose to the occasion, and overcame numerous obstacles to be the last bank to close prior to the Hurricane and the first bank in the area to reopen for its customers. Response to the need for assistance was so great, in fact, that organizers of the effort had to turn away our volunteers. In the weeks following the hurricane, group after group representing several First Financial regions across the state flew to the rescue of our banking brethren. What’s more, our company established a relief fund for employee contributions and the Company matched every dollar donated. In addition, employees sent supplies through various organizations, volunteered with many different causes and did so much more. First Financial Bank truly demonstrated what a caring, kind, and devoted family we really are. As we look back on the year, we could not be more proud of our people and the tremendous values they displayed during this very challenging time. We’re confident the focus, resolve and determination the First Financial family showed at a time of overwhelming adversity will only make us stronger and better. A LETTER TO OUR SHAREHOLDERS. Although every bank has a Bankers Association, which gave our affected employees disaster recovery plan, you hope $46,900 from its Disaster Recovery Fund; and the Federal you never have to put it into Home Loan Bank of Dallas, which also contributed. action. Last year, unfortunately, Although we were not able to make our employees we had to execute our plan when completely whole, these funds helped them get back into Hurricane Harvey hit our Conroe their homes and resume normal lives again. and Southeast Texas Regions. Harvey was the deadliest hurricane to strike Texas since 1919, killing 88 people, flooding more than 300,000 structures and 500,000 cars, creating 40,000 flood victims and causing estimated damages of more than $125 billion. Our Southeast Region was hit hardest, receiving 60 inches of rain, which flooded 20 of our employees’ homes and our bank facility in Mauriceville. Stephen Lee, our President and CEO of the Southeast Texas Region, and his team in Southeast Texas did an outstanding job of executing our disaster recovery plan. Their branches were the last to close and the first to reopen in the area. Stephen focused on customers and employees, making certain he did everything he FINANCIAL RESULTS We are pleased to report that our earnings increased for the 31st consecutive year. Net income for 2017 grew 14.9 percent to $120.4 million from $104.8 million in 2016. Of the $15.6 million increase, $7.7 million was attributable to the change in the corporate income tax rate. Basic earnings per share in 2017 rose to $1.82 from $1.59 in the previous year. Without the income tax adjustment mentioned above, earnings for the year would have been $112.7 million—a 7.6 percent increase from 2016—and adjusted basic earnings per share would have been $1.70. Although the Federal Reserve raised interest rates by 25 basis points three times last year, our net interest margin moved down slightly, to 4.01 percent from 4.08 percent in 2016. The net interest margin is a key profitability metric could to take care of each group. His leadership, tenacity, that expresses net interest income on a tax-equivalent experience and ability to think out of the box earned him basis as a percentage of average interest-earning assets. the Walter Johnson Award, which is the top honor the We are working diligently to increase loan rates to reflect Company bestows (see Page 6). We are so proud of the increases to interest rates that the Federal Reserve Stephen and our team in Southeast Texas, along with has made to date and we expect it to make in the future. the 15 people from other regions of the Company who Competition continues to be our largest impediment to volunteered to go to Southeast Texas and fill in for the increasing rates, but our net interest margin was still employees who lost everything, so that we could continue a very respectable result and placed us in the 85th to provide quality banking services to our customers. percentile of our peer group of banks. We also want to say thank you to all the people and organizations—customers, vendors, foundations, employees and officers— who contributed more than $300,000 to the First Financial Harvey Disaster Fund. Those contributions provided financial assistance to our 20 employees, many of whom did not have flood insurance, to rebuild their homes, buy cars and replace furniture and clothes. We also want to thank the Community Foundation of Abilene, which administered those funds; the Texas The provision for loan losses decreased 36.1 percent to $6.5 million from $10.2 million in 2016.This decrease was due primarily to improved credit metrics and fewer charge-offs than in 2016. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.57 percent at December 31, 2017, compared to 0.86 percent at December 31, 2016. Classified loans totaled $117.2 million at December 31, 2017, compared to $127.8 million a year earlier. Noninterest income grew 6.9 percent to $91.0 million from deposits of $345.9 million. The acquisition of Commercial 750 employees who chose to serve our communities elections, and we take this opportunity to thank Mike $85.1 million, while noninterest expense rose 4.9 percent to State Bank expands our growing Texas footprint into the on a bank holiday. Our people participated in projects Boyd and Ken Williamson for their long-term and $174.0 million from $165.8 million. cities of Kingwood, Fulshear, El Campo and Palacios, all of including meal preparation and delivery, landscaping valuable service to our company. which are located around the Houston market. We are very and painting, visits to homebound individuals, and excited about the opportunity this gives us to further expand educational sessions on how to protect yourself from RECOGNITION our footprint in the Houston area. Commercial State Bank is financial exploitation. We again outperformed our peer group of banks on several key financial metrics. Our return on average assets was 1.72 percent compared with 1.04 percent for our peers. Return on average equity was 13.63 percent versus our peers’ 9.56 percent. Our efficiency ratio, which expresses expenses as a proportion of tax-equivalent revenues, was again solid last year at 49.26 percent as opposed to our peers’ average of 60.56 percent. Our balance sheet showed good growth last year. Consolidated assets expanded 6.5 percent to $7.25 billion from $6.81 billion at the end of 2016. Loans grew 3.4 percent to $3.50 billion from $3.38 billion. We continue to be disappointed with our loan growth and are working hard on increasing our marketing efforts to grow the portfolio. Deposits increased 8.8 percent to $5.96 billion from $5.48 billion. Shareholders’ equity at year-end was $922.8 million, up 10.1 percent from $837.9 million at year-end 2016. Our First Financial Trust & Asset Management subsidiary had an outstanding year fueled by large market value growth, better oil and gas prices and a strong increase in leasing activity in the Permian Basin. Total trust assets under management at year-end reached a book value of $3.87 billion, a 14.6 percent increase from $3.37 billion a year earlier. The market value of the portfolio grew 17.4 percent to $5.13 billion from $4.37 billion in 2016. The trust company’s well managed and has experienced solid growth in assets and earnings. We believe it has excellent growth potential. We are most impressed with its management, employees and board members, who share our values, philosophies and commitment to outstanding customer service. We now have banking operations throughout Texas, with 72 locations that cover areas from Hereford in the Panhandle to Orange in Southeast Texas and to the Texas coast. REAL ESTATE ACTIVITIES In May 2017, we moved into the newly remodeled bank facility at 5257 Buffalo Gap Road in Abilene. The new location provides state-of-the-art banking and better access for our mortgage and banking customers. We kept our drive-in facility at 4400 Buffalo Gap Road open so that our customers in south Abilene would have drive-in locations on both sides of this very busy street. In July 2017, we moved into a new facility at the corner of Concho Avenue and Koenigheim Street in San Angelo. This building, which has been designed to be the entrance to San Angelo’s Historic District, is a beautiful new addition to the city. total fee income for 2017 grew 20.7 percent to $23.7 million Last year, we sold our Orange facility to the City of Orange from $19.6 million. Net income after tax for the trust company totaled $8.6 million in 2017, up 19.3 percent from $7.2 million in 2016. STRATEGIC ACQUISITION On January 1, 2018, we completed the acquisition of Commercial Bankshares, Inc. and its wholly owned subsidiary, Commercial State Bank, Kingwood, Texas. We issued 1,289,371 shares of First Financial Bankshares common stock with a value of $59.4 million to the shareholders of Commercial Bankshares, Inc. In addition, prior to closing, Commercial Bankshares, Inc. paid a special dividend to its shareholders totaling $22.1 million in accordance with the terms of our merger agreement. As of December 31, 2017, Commercial State Bank had total assets of $390.1 million, total loans of $271.5 million and total and are now constructing a new building a block away, which we hope to occupy by the end of 2018. As we have for many years, we continue to upgrade our buildings to provide beautiful and very functional facilities that enable us to better serve our customers with the latest technology and to lower our maintenance costs. SERVING OUR COMMUNITIES We at First Financial Bankshares serve our communities every day, but we are especially proud of what we contributed during our second annual company-wide Day of Service on Columbus Day, October 9, 2017. First Financial partnered with local nonprofit organizations across Texas to provide assistance to the senior population in each of the communities we serve. Day of Service initiatives took place in 35 locations across our footprint and involved more than We want to thank Steven L. Beal, who has chosen to In recognition of our first Day of Service, the Texas not stand for reelection to the Board of Directors at Bankers Association Foundation in May 2017 presented the Annual Shareholders Meeting in April, for his eight our company with its Cornerstone Award at the years of dedication and service to the Company. Steve Association’s 133rd Annual Convention in San Antonio. is the retired President and COO of Concho Resources We were very pleased to receive this honor. Inc. and has been a valuable member of our Board, MANAGEMENT CHANGES In June 2017, Chris Evatt was promoted to Chairman, President and CEO of the San Angelo Region upon the retirement of Mike Boyd, who had worked at the Bank Executive Committee, Compensation Committee and Nominating/Corporate Governance Committee. We will miss his counsel and support, and we thank him for his outstanding service. for more than 41 years. Chris began his career with First LOOKING AHEAD Financial in Stephenville as a credit department assistant in 2001 while attending Tarleton State University. Chris The Texas economy has performed well for the last several years during a period of low energy prices. has served in a number of positions throughout his career in Stephenville, Abilene and now San Angelo. In August 2017, Cory Crenshaw was elected Mineral Wells Market President to succeed Ken Williamson, who had been President for more than 15 years. Cory has been in the banking industry for more than 11 years as a branch manager and loan officer with a bank in the area. In October 2017, First Financial Bankshares, Inc. elected J. Michael Wilson as Chief Information Officer, as well as Chairman, President and CEO of First Technology Services, Inc., a wholly owned subsidiary of First Financial Bankshares, Inc. Mike previously had served as Senior Vice President and Chief Technology Officer for the past 15 years at a bank in New York. He comes to us with extensive knowledge of our core processing services, which are provided by Jack Henry & Associates, where he serves on its mid-tier technology steering committee. In November 2017, Tom O’Neil, Chairman of the Cleburne Region, announced the election of Austin Elsner as President and CEO. Austin, who is a Cleburne native, has had more than 16 years of banking experience as a business relationship manager, assistant branch manager and business banking area manager for a major banking institution. We are very pleased with these promotions and Moreover, that economy continues to strengthen with the slow escalation of oil and gas prices, the creation of new jobs, and ongoing good growth in the population. We have several initiatives under way to take advantage of this improved economy in order to grow loans and deposits, enhance noninterest income and decrease expenses so that we can continue to deliver solid results in the coming years. As we have in the past, we are proceeding strategically, searching diligently for well-managed banks to acquire at the right price that fit our culture and will bring long-term value to our company. We want to thank each of our stockholders for your loyalty and support. We never forget that we work for you. Thank you. F. Scott Dueser Chairman, President and CEO A Letter To Our Shareholders :: Page 5 THE 2018 WALTER JOHNSON AWARD STEPHEN LEE The Walter Johnson Award is bestowed upon a person who has contributed greatly and advanced our company to new heights for customers, shareholders and employees just as Walter Johnson did. The Award has been given only seven times in the last 13 years and is being bestowed for the eighth time to Stephen Lee, who is President of our Southeast Texas Region. Stephen contributed greatly to our company this year by using his ability to execute a disaster recovery plan so that our branches in the Southeast Region were the last to close and the first to reopen during the terrible 60-inch rainfall that resulted from Hurricane Harvey. The Hurricane was one of the worst and deadliest since 1919. When the storm was over, it was determined that 88 people had died, and more than 300,000 structures and 500,000 cars were flooded with an estimated damage of more than $125 billion. More than 40,000 people were displaced, of which 30,000 required water rescues. Twenty of our own employees lost everything, and most of them had to have a water rescue to evacuate their homes. Because our company had never experienced a hurricane event before, we depended upon Stephen’s knowledge and advice to help our employees and customers through the crisis. Throughout this ordeal, Stephen was a stalwart president who led his team through the disaster recovery to ensure their branches were the first to reopen after the storm. Having a disaster plan is essential, but you soon discover that it is only a foundation for what you are going to need because the challenges that you face on an hour-to-hour basis must be solved with fast thinking and out of the box solutions. Stephen never stopped thinking about how to make it work. With twenty of our employees not having homes, cars or clothes, there was no way for them to come to work. Many others were separated by flood waters from their location and could not come to work either. Not only did Stephen coordinate those who could get to work and let them know how they were going to execute the recovery plan, he also checked on those who could not get to work to make sure they were being taken care of and had what they needed. To help get the branches up and open, Stephen asked for volunteers throughout our company to come to Orange and help for a week at a time. A very gracious group of employees volunteered, but were delayed for a few days since our corporate plane couldn’t land at the Orange or Beaumont airports because of other rescue efforts. Stephen worked with various government entities, congressmen and city officials to enable us to land and bring needed volunteers and cash to the area. Stephen’s other focus was to ensure that our customers were taken care of when they came to our branches and, having the experience of going through two other hurricanes, Stephen knew exactly what needed to happen. Customers need cash, and we were there to cash their checks and take deposits so that the money flow would start moving again. Any customer who needed cash could get a $15,000 loan on the spot for funds to buy food, find a place to live and begin restoring their homes. He also knew that customers would not be able to make loan payments, so we instructed our phone center and our staff in the Southeast Texas and Conroe Regions to automatically waive two payments for any customer who asked. Our phone center was bombarded and, when our customers learned that with just a phone call they could get a two-month deferment, it eased a great deal of their stress. Stephen never stopped worrying about our twenty employees who had lost everything and were displaced from their homes. Because we had many employees and other people who wanted to donate money to help, Ron Butler set up a fund through the Community Foundation of Abilene where tax deductible contributions could be given and our displaced employees could receive that money tax-free because of it being a national disaster. We raised more than $300,000. We also solicited funds for our people through the Texas Bankers Association Hurricane Harvey Disaster Fund and received $46,800 from them, as well as funds from the Federal Home Loan Bank of Dallas, all of which was distributed to our people to help them buy clothes, cars and rebuild their homes. Most of them did not have flood insurance and, although these funds didn’t cover everything, it was a big help and very much appreciated. Stephen never waivered in his commitment to the bank, the employees, the customers, the communities and, ultimately, the shareholders by doing what was best for them in a very timely manner. When compared to many of the other banks in the area that didn’t open for weeks, we became a Star in Southeast Texas because we were there not only to help our customers, but also the other banks’ customers. This year, there was no question who should be the recipient of the Walter Johnson Award, and we proudly honor Stephen Lee and his team for an outstanding job. F. Scott Dueser Chairman, President and CEO FIRST FINANCIAL BANK AND TRUST LOCATIONS Abilene* ............. 325.627.7000 Acton ................. 817.573.6900 Albany ................ 325.627.7953 Aledo ................. 817.341.5200 Alvarado ........... 817.774.5150 Beaumont* ....... 409.600.6456 Boyd .................. 940.683.8760 Bridgeport ........ 940.683.8700 Brock ................. 817.596.0307 Burleson ............ 817.774.5175 Cisco ................. 254.629.6111 Cleburne ........... 817.774.5100 Clyde ................. 325.627.7910 Conroe ............... 936.760.1888 Cut and Shoot.... 936.788.2121 Decatur ............. 940.683.8780 Eastland ............ 254.629.6145 El Campo .......... 979.543.6441 Fort Worth* ........ 817.410.4979 Glen Rose ......... 254.897.4808 Granbury .......... 817.573.6900 Grapevine ......... 817.722.8980 Hereford ............ 806.363.8200 Huntsville .......... 936.295.2224 Katy-Fulshear .... 281.346.0221 Keller .................. 817.329.8625 Kingwood ......... 218.318.4600 Magnolia............ 936.273.4700 Mauriceville ....... 409.745.3755 Merkel ................ 325.928.1111 Midlothian ........ 972.723.7100 Mineral Wells ..... 940.327.5400 Montgomery ..... 936.597.5997 Moran ............... 325.627.7953 Newton .............. 409.224.7506 New Waverly ..... 936.344.2224 Odessa* ............. 432.367.8910 Orange................ 409.883.3563 Palacios .............. 361.972.2585 409.736.5951 Port Arthur........... Ranger ............... 254.629.6729 Rising Star............ 254.629.6703 Roby .................... 325.776.2261 San Angelo*......... 325.659.5900 Southlake ............. 817.410.2915 Stephenville*........ 254.965.5036 Sweetwater* ......... 325.235.6600 Tomball .................. 281.516.7835 Trent ....................... 325.862.6121 Trophy Club............. 817.329.8615 Vidor........................ 409.769.8536 Waxahachie ............ 972.723.7156 Weatherford............ 817.598.2500 Willis........................ 936.890.3500 Willow Park ............. 817.598.2780 * Trust Office and Bank location Walter Johnson Award | Bank Locations :: Page 7 FINANCIAL HIGHLIGHTS IN THOUSANDS (except for share data) IN THOUSANDS (except for share data) FOR THE YEAR 2017 2016 % INCREASE FOR THE YEAR 2017 2016 % INCREASE NET INCOME $120,371 $104,774 14.88% AT YEAR-END Basic Earnings (PER SHARE) $1.82 $1.59 Dividends Declared $49,648 $46,246 Dividends (PER SHARE) $0.75 $0.70 14.47% 7.35% 7.14% AVERAGES Assets Securities Loans Deposits $6,981,511 $6,599,199 $2,964,650 $2,773,941 $3,435,447 $3,333,241 $5,627,933 $5,135,603 Shareholders’ Equity $882,813 $847,866 5.79% 6.88% 3.07% 9.59% 4.12% Assets Securities Loans Deposits $7,254,715 $6,809,931 6.53% $3,087,473 $2,860,958 7.92% $3,500,699 $3,384,205 3.44% $5,692,961 $5,478,539 3.91% Shareholders’ Equity $922,768 $837,885 10.13% Book Value Per Share $13.93 $12.68 9.86% Trust Assets (Book Value) $3,865,744 $3,373,554 14.59% 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) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Ten-Year Compound Growth Rate $3,212,385 $368,782 $53,164 $0.86 $3,279,456 $415,702 $53,797 $0.86 $3,776,367 $441,688 $59,659 $0.96 $0.45 $0.46 $0.46 – – – $5.91 $6.66 $7.03 $18.41 $18.08 $17.09 $4,120,531 $508,537 $68,369 $1.09 $0.48 3/2 split $8.08 $16.72 $4,502,012 $556,963 $74,225 $1.18 $5,222,208 $587,647 $78,868 $1.24 $0.50 $0.52 – – $8.84 $9.18 $19.51 $33.06 $5,848,202 $681,537 $89,559 $1.40 $0.55 2/1 split $10.63 $29.88 $6,665,070 $804,986 $100,381 $1.55 $6,809,931 $837,885 $104,774 $1.59 $7,254,715 $922,768 $120,371 $1.82 $0.62 $0.70 $0.75 8.98% 10.65% 9.29% 8.57% 5.97% – – – – $12.20 $30.17 $12.68 $45.20 $13.93 $45.05 9.96% 13.63% Adjusted for stock dividends and splits NET INCOME GROWTH (in thousands) KEY RATIOS 2017 2016 2016 COMMON STOCK MARKET VALUE AND DIVIDEND DATA NET INTEREST MARGIN 2013 $78,868 2014 $89,559 2015 $100,381 2016 $104, 774 2017 $120,371 Return On Avg. Assets 1.72% 1.59% Return On Avg. Equity 13.63% 12.36% Year-End Equity/Assets 12.72% 12.30% Efficiency 49.26% 49.22% QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $46.70 $35.05 $45.20 Third $37.06 $30.95 $36.44 Second $34.50 $27.72 $32.79 First $30.75 $24.12 $29.58 $0.18 $0.18 $0.18 $0.16 2013 4.22% 2014 4.20% 2015 4.12% 2016 4.08% 2017 4.01% RETURN ON AVERAGE EQUITY EFFICIENCY RATIO 2013 13.75% 2014 14.00% 2015 13.60% 2016 12.36% 2017 13.63% 2013 50.19% 2014 49.24% 2015 47.61% 2016 49.22% 2017 49.26% 2017 COMMON STOCK MARKET VALUE AND DIVIDEND DATA RETURN ON AVERAGE ASSETS QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $48.85 $43.05 $45.05 Third $46.00 $37.31 $45.20 Second $44.80 $36.85 $44.20 $0.19 $0.19 $0.19 First $46.45 $37.55 $40.10 $0.18 2013 1.64% 2014 1.65% 2015 1.61% 2016 1.59% 2017 1.72% Financial Highlights | Selected Financial Data :: Page 9 ABILENE REGION Abilene | Clyde | Moran | Albany | Odessa | Eastland | Ranger | Rising Star | Cisco | Sweetwater | Merkel | Trent | Roby ABILENE REGION (CONTINUED) SENIOR OFFICERS Ronald D. Butler II Chairman and CEO Marelyn Shedd President RONALD D. BUTLER II Chairman and CEO David W. Bailey President, Eastland Division Rodney Foster Executive Vice President Senior Lending Officer Sweetwater Vance Jones Executive Vice President Commercial Lending Janet O’Dell Executive Vice President Mortgage Loans Charles E. Tennesson Executive Vice President CFO and Chief Operations Officer Rick Waldraff Executive Vice President Senior Lender / Commercial Lending Michael Wolverton Executive Vice President Consumer Lending Jeff Adams Senior Vice President MARELYN SHEDD President ABILENE MAIN OFFICE 400 Pine St. Abilene, TX 79601 325.627.7000 DAVID W. BAILEY President, Eastland Division EASTLAND OFFICE 201 E. Main St. Eastland, TX 76448 254.629.6100 SWEETWATER OFFICE 201 Elm. St. Sweetwater, TX 79556 325.235.6600 Debbie Anthony Senior Vice President Vanessa Faz Senior Vice President Patty Fuentes Senior Vice President Jim Goldston Senior Vice President Tony Gorman Senior Vice President Landon Hammond Senior Vice President Jennifer Harper Senior Vice President Evan Harris Senior Vice President Candi Kanady Senior Vice President Bobby Martin Senior Vice President Marshall Morris Senior Vice President Daniel Neely Senior Vice President Corie O’Connor Senior Vice President Ryan Parrish Senior Vice President Mark Pierce Senior Vice President Fernando Quintana Senior Vice President Steve Simmel Senior Vice President Britt Stuart Senior Vice President Dennis Tarrant Senior Vice President Steve Waller Senior Vice President REGIONAL DIRECTORS Ronald D. Butler II Chairman and CEO Marelyn Shedd President David W. Bailey President, Eastland Division J. Michael Alexander President James M. Alexander & Co. Katie Alford President and CEO Community Foundation of Abilene Donna J. Boatright CEO Rolling Plains Memorial Hospital Jeff Branson General Partner Williamson-Branson Real Estate Tucker S. Bridwell President Mansefeldt Investment Corp. Louis Brooks, Jr. Rancher Paul Cannon Shareholder, President McMahon, Surovik, Suttle, P.C. David Copeland, CPA President, SIPCO, Inc. and Shelton Family Foundation Joe Crawford President Abilene Aero, Inc. Doug Crawley Rancher, Real Estate Mike Denny President Batjer and Associates Murray Edwards Principal The Edwards Group Jim Farrar Attorney Allan D. Frizzell Executive Vice President Enrich Oil Corporation Jim Keffer President EBAA Iron Sales, Inc. Tim Lancaster President and CEO Hendrick Health System Jay Lawrence President MAL Enterprises, Inc. Kirk Massey Investments Larry May May & Hrbacek CPAs Stanley Morris, Jr. Investments Brian Perry Insurance, Investments Thomas L. Rees, Jr. Rees, Rees & Fuller Attorneys Dale Squiers, RPh Owner Dalsan Enterprises Leigh Taliaferro, M.D. Physician Over the course of several weeks, three teams traveled to the Southeast Region to help provide staff for bank customer needs and to support our fellow bank employees. IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $2,401,229 $981,633 $1,894,798 $38,214 Dec. 31, 2017 $2,485,780 $994,088 $1,968,632 $40,560 1.73% 1.67% 42.18% 42.22% L to R: Charity Skelton, David Bradshaw, Lauren Lee, Front L to R: John Mendez. Jamie McBee. Chelsey Fox. Patty Fuentes, Jessie Baze, Zack Ryan David Gindrup. Rachael Lee, Stephen Lee, Melissa English Back L to R: Gary Milliorn, David Bradshaw Bank Information :: Page 11 CLEBURNE REGION Cleburne | Burleson | Alvarado | Midlothian | Waxahachie CONROE REGION Conroe | Montgomery | Magnolia | Willis | Tomball | Cut and Shoot | Huntsville | New Waverly SENIOR OFFICERS REGIONAL DIRECTORS Tom O’Neil Chairman Austin EIsner President and CEO Tom O’Neil Chairman Austin EIsner President and CEO Duane Thomas Cleburne Market President Senior Lender Dereece Howell Executive Vice President Chief Operations Officer Ray Beavers Retired General Manager and CEO United Cooperative Services Ronald D. Butler II First Financial Bankshares, Inc. Russell Phillips Executive Vice President Robert Childress III Childress Engineers Alecia Bland Senior Vice President Kim Hamilton Senior Vice President Chris Schjetnan Senior Vice President Stacey Sloan Senior Vice President Mark Hill Utility Construction Consultant Tim Lyness Lyness Construction, LP Dr. Joe Martin Cleburne Eye Clinic Jack Scott Bell-Scott Insurance Group TOM O’NEIL Chairman AUSTIN ELSNER President and CEO MAIN OFFICE 200 N Ridgway Dr. Cleburne, TX 76033 817.774.5100 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $523,789 $206,104 $475,887 Dec. 31, 2017 $506,842 $198,055 $455,066 $7,108 $6,669 1.68% 1.42% 50.62% 50.35% Group III departing Abilene for the 3rd week of support for the Southeast Region. L to R: Nicole Minyard, Jared Rodriguez, David Bradshaw, Raquel Garza, Carla Lane SENIOR OFFICERS REGIONAL DIRECTORS Sam W. Baker Chairman, President and CEO Sam W. Baker Chairman, President and CEO Johnny Peet, Jr., M.D. Physician Robert Pate President, Huntsville Division Robert Pate President, Huntsville Division Randy Roan Commercial Construction John Sebastian Conroe Golf Cars Lloyd Tisdale Investments SAM W. BAKER Chairman, President and CEO MAIN OFFICE 1800 W. White Oak Terrace Conroe, TX 77304 936.760.1888 ROBERT PATE President, Huntsville Division MAIN OFFICE 33 SH 75 North Huntsville, TX 77320 936.295.2224 G. Bart Griffith Executive Vice President Chief Lending Officer Michelle Murray Executive Vice President Treasury Management Lee Warren Executive Vice President Chief Operations Officer Chris Baughman Executive Vice President Guy Barker Senior Vice President Bobby Brennan Senior Vice President Mortgage Loan Officer Heidi Carney Senior Vice President Professional & Executive Lending Terry Doak Senior Vice President Candy Emmerich Senior Vice President Anthony Olivieri Senior Vice President Harry J. Brooks Chairman, President and CEO First Financial Bank, Kingwood Region Donnie Buckalew Buckalew Chevrolet John J. Certa, Jr. Owner Team Auto Group Casey Collum Owner Collum Development Chris deMilliano Operations Manager Steely Lumber Company Candyce F. Dixon CPA Dan Dominey DBD Interests F. Scott Dueser First Financial Bankshares, Inc. Robert C. Ernst, Jr. Owner Ernst Jewelers J. Bruce Hildebrand, CPA First Financial Bankshares, Inc. Curtis Montgomery, M.D. Physician IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $587,180 $409,404 $486,174 Dec. 31, 2017 $625,135 $446,624 $514,414 $7,964 $8,607 1.35% 1.42% 55.59% 55.80% Bank Information :: Page 13 FORT WORTH REGION HEREFORD REGION MARTIN J. NOTO, JR. President and CEO MAIN OFFICE 1000 Forest Park Blvd. Fort Worth, TX 76110 817.410.4970 SENIOR OFFICERS REGIONAL DIRECTORS Martin J. Noto, Jr. President and CEO Les Mariotti Executive Vice President Chief Operations Officer Jayson Green Senior Vice President Mike Hopkins Senior Vice President Chris Shah Senior Vice President Bryan Thomas Senior Vice President Murray Edwards Chairman of the Board Principal, The Edwards Group Mary Lee Cruz Founding Partner E Source, Inc. Martin J. Noto, Jr. President and CEO Larry Anfin Past CEO Coors Distributing of Fort Worth Smith A. Brownlie III CPA and Co-Founder Brownlie & Braden Ronald D. Butler II First Financial Bankshares, Inc. Stephen Kimmel Chief Financial Officer Cook Children’s Health Care System Matt Morris President Gus Bates Insurance Paul Poston President Wellington Insurance George Robertson Managing Partner Growco Capital, LLC SENIOR OFFICERS REGIONAL DIRECTORS Mike Mauldin Chairman, President and CEO Mike Mauldin Chairman, President and CEO Tim Laws Executive Vice President Chief Lending Officer Robert de la Cruz Executive Vice President MIKE MAULDIN Chairman, President and CEO MAIN OFFICE 212 E. Third St. Hereford, TX 79045 806.363.8200 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 Sally Noyce Human Resource Manager Panhandle Express, LLC Jerry Stevens Owner, Stevens 5-Star Car and Truck Center Johnny E. Trotter President and CEO Livestock Investors, Ltd. IN THOUSANDS ASSETS LOANS DEPOSITS Dec. 31, 2016 $63,736 $48,566 $40,956 Dec. 31, 2017 $88,166 $75,356 $87,153 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $186,220 $131,493 $156,834 Dec. 31, 2017 $213,761 $146,287 $183,981 $3,524 $3,587 1.88% 1.82% 45.75% 44.31% Martin Noto and Mike Hopkins serving lunch at a Hurricane Harvey shelter for evacuees in Fort Worth. The National Guard was staged at our Vidor location the day after the storm moved out of the Southeast Region. They not only rescued people from flooding homes, they also provided food and set up a water and supply station in the Bank parking lot. Bank Information :: Page 15 KINGWOOD REGION Kingwod | El Campo | Fulshear | Palacios SAN ANGELO REGION HARRY J. BROOKS Chairman, President and CEO MAIN OFFICE 24080 Hwy 59 N. Suite 100 Kingwood, TX 77339 281.318.4600 David Melanson Banking Robert Nickles Principal Alegacy SENIOR OFFICERS REGIONAL DIRECTORS Harry J. Brooks Chairman, President and CEO Shelley Dacus Executive Vice President Chief Lending Officer James Alexander Executive Vice President Commercial Lending Jeff Fuechec El Campo Market President Lee Warren Executive Vice President Chief Operations Officer Doug Faver Executive Vice President Real Estate Ken Johnson Executive Vice President Brian Bonner Senior Vice President Real Estate Brandon Zabodyn Senior Vice President Commercial Lending Nancy Powell Senior Vice President Tammy Titel Senior Vice President Harry J. Brooks Chairman, President and CEO First Financial Bank, Kingwood Region Sam Baker Chairman, President and CEO First Financial Bank, Conroe Region Julie Barry Attorney Moody Law Group Jeff Cravey Principal Jeffrey M. Cravey PC F. Scott Dueser First Financial Bankshares, Inc. Michael Gonzalez Principal The Gonzalez Group J. Bruce Hildebrand, CPA First Financial Bankshares, Inc. Kenny Isbell President Apache Oil Company Ronnie Matthews Owner Great American Title IN THOUSANDS ASSETS LOANS DEPOSITS Dec. 31, 2017 $390,112 $271,533 $345,908 *Commercial State Bank, Kingwood, Texas was aquired on January 1, 2018. The Bank parking lot at Mauriceville was used for a boat staging area for rescues in the Mauriceville area. The Branch took on water and had to be closed for a short period. SENIOR OFFICERS REGIONAL DIRECTORS Chris Evatt Chairman, President and CEO Chris Evatt Chairman, President and CEO CHRIS EVATT Chairman, President and CEO MAIN OFFICE 222 S. Koenigheim San Angelo, TX 76903 325.659.5900 Cindy George Executive Vice President Chief Operations Officer Lindy Jordan Executive Vice President Edward Carrasco Senior Vice President Pat Cottle Senior Vice President Wes Hayes Senior Vice President Wes Masters Senior Vice President Spencer Murphy Senior Vice President Reba Priddy Senior Vice President Luke Uherik Senior Vice President Honorable Marilyn Aboussie Chief Justice, Retired Ronald D. Butler II First Financial Bankshares, Inc. Steve Eustis Commercial Real Estate Ron Giddiens Investments Partner, D&G Consulting David F. Lupton President Angelo Glass & Mirror Company, Inc. Mary Jane Steadman Attorney Real Estate Investment Management IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $709,804 $217,614 $636,952 Dec. 31, 2017 $715,102 $209,851 $625,777 $11,818 $11,928 1.74% 1.71% 34.66% 36.78% Our new bank property at the corner of 15th and Park in Orange flooded. In the background, you can see our existing digital sign blacked out due to no electricity. At this point, only boats and large military vehicles were traveling through this area of town. Bank Information :: Page 17 SOUTHEAST REGION Orange | Vidor | Mauriceville | Newton | Port Arthur | Beaumont SOUTHLAKE REGION Southlake | Trophy Club | Keller | Bridgeport | Boyd | Decatur | Grapevine STEPHEN LEE CEO and President MAIN OFFICE 812 N. 16TH St. Orange, TX 77630 800.300.8904 SENIOR OFFICERS REGIONAL DIRECTORS Stephen Lee CEO and President Blaine Callier President - Mid County Market Commercial Lender Tommy Gunn Chairman of the Board Attorney at Law Stephen Lee CEO and President Robert Kocot President - Beaumont Market Commercial Lender Dr. Ray Callas Managing Partner Anesthesia Associates, PLLC Joe Love Executive Vice President Commercial Lender Kim Dickerson Senior Vice President Chief Operations Officer Cindi LaChance Senior Vice President Mortgage Loan Officer Curt Leger Senior Vice President Commercial Lender F. Scott Dueser First Financial Bankshares, Inc. Jim Gilliam President Bates & Company J. Bruce Hildebrand, CPA First Financial Bankshares, Inc. Jim Wimberly Attorney at Law Chad Mason Vice President Mason Construction Mike Poutra Co-Owner Dominion Forms Walter G. Riedel, III Chairman of the Board Nelda C. and H.J. Lutcher Stark Foundation  Ross Smith President Akrotex, Inc. Owner Sabine River Ford, Inc. Kevin Williams President Cypress Bayou Industrial Owner American Industrial Minerals, Inc. MARK L. JONES Chairman, President and CEO MAIN OFFICE 151 W. Southlake Blvd. Southlake, TX 76092 817.410.2915 SENIOR OFFICERS REGIONAL DIRECTORS Mark L. Jones Chairman, President and CEO Mark L. Jones Chairman, President and CEO F. Mills Shallene Wise County Market President Ronald D. Butler II First Financial Bankshares, Inc. Les Mariotti Executive Vice President Chief Operations Officer J. Sean Shope Executive Vice President Commercial Lender Ryan Wall Executive Vice President Consumer Lender Dickie W. Greenwood Senior Vice President Steve Sims Senior Vice President Ryan Sonntag Senior Vice President Tracie Talkington Senior Vice President Traci Bernard, BSN, RN President Texas Health Harris Methodist Hospital, Southlake William Ray Cook, Jr., CPA Cook, McDonald & Co. Martin Schelling Conifer Real Estate J. Gary Shelton Grocer Real Estate Investor Stan Stephens President Stephens Pneumatics, Inc. Tankheads, Inc. Terry Wilkinson Wyndham Properties, Ltd. IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $492,064 $374,478 $410,933 Dec. 31, 2017 $592,473 $396,550 $504,055 $7,655 $8,375 1.52% 1.57% 50.25% 49.08% Dec. 31, 2016 $452,258 $359,417 $400,763 Dec. 31, 2017 $588,805 $380,863 $530,925 $7,200 $8,291 1.72% 1.59% 54.89% 52.25% This is 16th Street in front of the Orange Branch on the first day we reopened for customers. We were running on generator power only, but were proud to serve our customers as the first bank to reopen in Orange! Mark Jones and Marcus Morris from our Southlake Region traveled to Orange over one weekend to help restore an employee’s home. Bank Information :: Page 19       TRENT B. SWEARENGIN Chairman, President and CEO Cory Crenshaw Mineral Wells Market President Ronald D. Butler II First Financial Bankshares, Inc. JAY GIBBS Chairman and CEO STEPHENVILLE REGION Stephenville | Granbury | Glen Rose | Acton | Mineral Wells SENIOR OFFICERS REGIONAL DIRECTORS Trent B. Swearengin Chairman, President and CEO Trent B. Swearengin Chairman, President and CEO Doyle Cooper Glen Rose Market President Keith Brown Prime Building Components, LLC MAIN OFFICE 2201 W. South Loop Stephenville, TX 76401 254.965.5036 Bart Rodgers Granbury Market President George Gault Attorney Dereece Howell Executive Vice President Chief Operations Officer Robert Lemons Executive Vice President Brad Seay Executive Vice President Blayne Baley Senior Vice President Doug Dobbins Senior Vice President Donna Feller Senior Vice President Vickie Pettit Senior Vice President Trent Tidwell Senior Vice President Matt Ward Senior Vice President Regional Consumer Lending Manager Walter W. Hardin III Real Estate Investments Wendell Hollingsworth Industry & Economic Development Doug Montgomery Texstar Ford Terry L. Murphy Murphy and Murphy, Inc. Ron Pack Ranching and Investments Bill Parham Boucher Morgan & Young CPAs David Ramsey, M.D. Family Practice Center John Terrill Attorney Michael B. Williams M W Supply, Inc. IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $763,511 $426,236 $652,233 Dec. 31, 2017 $815,630 $421,952 $693,365 $13,180 $13,989 1.78% 1.78% 44.94% 44.58% WEATHERFORD REGION Weatherford | Aledo | Willow Park | Brock SENIOR OFFICERS REGIONAL DIRECTORS Jay Gibbs Chairman and CEO Justin Hooper President Les Mariotti Executive Vice President Chief Operations Officer Chris Cregger Senior Vice President Lori Hill Senior Vice President Kent Hudson Senior Vice President Jimmie Sue Lawson Senior Vice President Sean Woodring Senior Vice President Senior Lender Jay Gibbs Chairman and CEO Jamie Adams Senior Vice President Briggs Freeman Sotheby’s Realty Ronald D. Butler II First Financial Bankshares, Inc. James D. Eggleston Attorney Eggleston King LLP Nan Kingsley President Bluestem Studios, Inc. Kevin R. Lackey President and CEO Freedom Power Sports Stephen E. Milliken C.D. Hartnett Company Mike White, O.D. Therapeutic Optometrist JUSTIN HOOPER President MAIN OFFICE 101 College Park Dr. Weatherford, TX 76086 817.596.0307 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2016 $494,353 $217,275 $417,407 Dec. 31, 2017 $566,656 $222,914 $481,422 $8,392 $8,203 1.69% 1.58% 47.68% 49.44% Flood waters on I-10 in Orange. This view is from Stephen Lee’s truck as he was out surveying the branches to see what roads were accessible. Bank Information :: Page 21 Left to Right: Kami Graves, Troy Fore, Janet O’Dell, Wes Masters, Tammie Harding, Ryan Craig, Bobby Brennan, Cindi LaChance Left to Right: Blake Snyder, Larry Williams, Cynthia Watson, Micheal Wilson, Isabel Montoya, David Weems, Kevin Pilgrim, Scott Payne First Financial Mortgage First Technology Services, Inc. SENIOR OFFICERS Troy Fore President Ryan Craig Executive Vice President Kami Graves Executive Vice President Tammie Harding Executive Vice President Janet O’Dell Executive Vice President Bobby Brennan Senior Vice President Cindi LaChance Senior Vice President Wes Masters Senior Vice President 2017 was a good year for First Financial Mortgage, but was not without its challenges. The effects of Hurricane Harvey and the ensuing floods in our Southeast Region, low housing inventory and fierce pricing competition did present some slight headwinds for our team. Despite these challenges, we helped 2,025 individuals and families with their home financing needs totaling $458 million in total originations. Eighty percent of our total originations were derived from purchase transactions. Interest rates began the year higher, but remain at historic lows. The housing market across Texas continues to be robust and the First Financial Mortgage team has a full menu of products to handle the financing needs of Texans across our state. Looking forward, First Financial Mortgage is well-positioned in some of the fastest growing areas of the state. Continued growth will provide many opportunities for our company. SENIOR OFFICERS DIRECTORS Michael Wilson Chairman, President and CEO Kevin Pilgrim Executive Vice President IT Operations Isabel Montoya Senior Vice President Deposit Operations Cynthia Watson Senior Vice President Chief Information Security Officer David Weems Senior Vice President Chief Operations Officer Larry Williams Senior Vice President Technical Architecture Scott Payne Vice President Infrastructure Support Manager Blake Snider Vice President Software Development Michael Wilson Chairman, President and CEO First Technology Services, Inc. Executive Vice President and CIO First Financial Bankshares, Inc. April Anthony Chief Executive Officer Encompass Home Health Homecare Homebase Ronald D. Butler II Executive Vice President Chief Administrative Officer First Financial Bankshares, Inc., Chairman and CEO First Financial Bank, Abilene Region F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. Ron Giddiens Investments Partner, D&G Consulting Gary S. Gragg Executive Vice President Lending First Financial Bankshares, Inc. J. Bruce Hildebrand, CPA Executive Vice President and Chief Financial Officer First Financial Bankshares, Inc. Monica Houston Executive Vice President Retail Banking and Training First Financial Bankshares, Inc. Les Mariotti Executive Vice President and Chief Operations Officer First Financial Bank, Fort Worth Region First Financial Bank, Southlake Region First Financial Bank, Weatherford Region Matt Melbourne Executive Vice President First Financial Trust & Asset Management Company Trent B. Swearengin Chairman, President and CEO First Financial Bank, Stephenville Region Lee Warren Executive Vice President Chief Operations Officer First Financial Bank, Conroe Region First Financial Bank, Kingwood Region Tony Wormington Retired President Jack Henry and Associates, Inc. First Financial Mortgage | First Technology Services :: Page 23 Abilene | Beaumont | Fort Worth | Odessa | San Angelo | Stephenville | Sweetwater Back Left to Right: David Byrd, Wayne Chowning, Lon Biebighauser, Konrad S. Halbert, Barbara Hill Front: Left to Right David Castleberry, Kirk W. Thaxton, Bradley D. Brown Back Left to Right: Frank Gioia, Daniel Neely, Brandon Harris, Monica Houston, Mike Wolverton, Rick Howard Front: Left to Right Tony Gorman, Brandon Barker First Financial Trust & Asset Management Company Line Of Business Executives First Financial Trust & Asset Management Company delivered excellent results in 2017. Total assets under management at year- end had a book value of $3.87 billion, a 14.6 percent increase from $3.37 billion at the end of 2016. The market value of the assets totaled $5.13 billion, a gain of 17.4 percent from $4.37 billion. For the year, total fee income increased 20.7 percent to $23.7 million from $19.6 million in 2016, and net earnings after tax increased 19.3 percent to $8.6 million from $7.2 million. The trust company’s investment performance remained strong. Our Strategic Growth Equity portfolio led the way with a return of 28.9 percent, followed by our Core World portfolio with 23.4 percent and our Core Diversified portfolio with 21.7 percent. Our Taxable and Tax-Exempt Fixed-Income portfolios outpaced their respective benchmarks. We will be completing the conversion to our new core accounting platform with a February 28, 2018 conversion date. We are excited about the enhancements that this new platform will bring, such as improved online access, statements and tax reporting for our customers and additional technology solutions to assist them with meeting their financial goals. Trust Assets (in millions) 2013 $2,465 2014 2015 2016 2017 $2,774 $3,060 $3,374 $3,866 Trust Fees (in millions) 2013 2014 $0 2015 2016 $16.32 $18.77 $19.25 $19.64 $23.69 2017 Trust Net Income (in millions) 2013 2014 2015 2016 2017 $6.142 $7.109 $7.449 $7.190 $8.579 SENIOR OFFICERS SENIOR OFFICERS (continued) Kirk W. Thaxton Chairman, President and CEO Lon Biebighauser Executive Vice President Manager, Abilene David Byrd Executive Vice President Manager, San Angelo David Castleberry Executive Vice President Manager, Stephenville Wayne Chowning Executive Vice President Manager, Sweetwater Konrad S. Halbert Executive Vice President Manager, Fort Worth Barbara Hill Executive Vice President Manager, Odessa Matt Melbourne Executive Vice President Chief Operations Officer Bradley D. Brown Senior Vice President Manager, Beaumont/Orange Christopher N. Montoya Senior Vice President Manager, Equities David B. Pitzer Senior Vice President Manager, Real Property Bill Rowe Senior Vice President Manager, Fixed Income Randy Spiva Senior Vice President Manager, Oil & Gas DIRECTORS Kirk W. Thaxton Chairman, President and CEO First Financial Trust & Asset Management Company, N.A. David Copeland, CPA President Shelton Family Foundation F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. Jay Lawrence President MAL Enterprises, Inc. David F. Lupton President Angelo Glass & Mirror Company. Inc. Bill Parham Boucher Morgan & Young CPAs Walter G. Riedel, III Chairman of the Board Nelda C. and H.J. Lutcher Stark Foundation ADVISORY DIRECTOR John L. Beckham Beckham Rector and Eargle LLP Our line of business executives continue to lead the Company toward our goal of becoming “best of class” in consumer lending, treasury management, customer service, human resources, retail banking, training and investment services. The business strategy, processes, talent recruitment and growth of these key business lines is very important to the overall performance of the Company. SENIOR OFFICERS Monica Houston Executive Vice President Retail Banking and Training Michael Wolverton Executive Vice President Consumer Lending Frank Gioia Senior Vice President Call Center Tony Gorman Senior Vice President Human Resources Brandon Harris Senior Vice President Appraisal Services Daniel Neely Senior Vice President Treasury Management Brandon Barker Co-Manager First Financial Investment Advisors Rick Howard Co-Manager First Financial Investment Advisors Trust & Asset Management | Line of Business Executives :: Page 25 Back: Luke Longhofer, Randy Roewe, Michele P. Stevens, Tim Collard, Monica Houston, Lawrence B. Kentz, Kyle McVey, Marna Yerigan, Kirk W. Thaxton, Gary S. Gragg Front: Ronald D. Butler II, F. Scott Dueser, J. Bruce Hildebrand, J. Michael Wilson Back: Murray Edwards, April Anthony, Ron Giddiens, F. Scott Dueser, Tucker S. Bridwell, Kade Matthews, David Copeland Front: Johnny E. Trotter, Tim Lancaster, Ross H. Smith, Steven L. Beal Corporate Information Board Of Directors OFFICERS: F. Scott Dueser Chairman of the Board, President and CEO Ronald D. Butler II Executive Vice President Chief Administrative Officer J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer Gary S. Gragg Executive Vice President Lending Luke Longhofer Executive Vice President Lending Randy Roewe Executive Vice President Chief Risk Officer J. Michael Wilson Executive Vice President Chief Information Officer Tim Collard Executive Vice President Lending Monica Houston Executive Vice President Retail Banking and Training Michele P. Stevens Executive Vice President Advertising and Marketing Marna Yerigan Executive Vice President Lending Lawrence B. Kentz Senior Vice President Chief Compliance Officer Kyle McVey, CPA Senior Vice President Chief Accounting Officer ANNUAL MEETING Tuesday, April 24, 2018 Abilene Convention Center 1100 N. Sixth St. Abilene, TX 79601 10:30 a.m. FOR FINANCIAL AND INVESTOR INFORMATION: J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer 325.627.7155 CORPORATE OFFICE TRANSFER AGENT SEND CERTIFICATES FOR TRANSFER AND ADDRESS CHANGES TO: Continental Stock Transfer & Trust Company 1 State Street 30th floor New York, NY 10004 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 Continental Stock Transfer & Trust Company 212.509.4000 ADDRESS SHAREHOLDER INQUIRIES TO: Continental Stock Transfer & Trust Company 1 State Street 30th Floor New York, NY 10004 CONTINENTAL STOCK TRANSFER & TRUST COMPANY WEBSITE www.continentalstock.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, 2017, deposit information compiled by the Federal Deposit Insurance Corporation. COMMITTEE CHAIRMEN: 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 F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. April Anthony CEO Encompass Home Health Homecare Homebase Steven L. Beal Retired President and COO Concho Resources Inc. Tucker S. Bridwell, CPA* President Mansefeldt Investment Corp. David Copeland, CPA President, SIPCO, Inc. and Shelton Family Foundation Murray Edwards Principal, The Edwards Group Ron Giddiens Investments Partner, D&G Consulting Tim Lancaster President and CEO Hendrick Health System Kade Matthews Ranching and Investments Ross H. Smith President, Akrotex, Inc. Owner, Sabine River Ford, Inc. Johnny E. Trotter President and CEO Livestock Investors, Ltd. * Lead Director 1991 2015 1 2 2010 1, 3, 4 2007 1, 4 1998 1, 2, 4 2006 1, 2, 4 2009 2 2013 2,3 1998 2014 3 3 2003 1, 3, 4 Corporate Information | Board of Directors :: Page 27 400 Pine St., Abilene, TX 79601 | 325.627.7200 | ffin.com 

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