First Financial Bankshares
Annual Report 2019

Plain-text annual report

Dedicated to EXCELLENCE 2019 ANNUAL REPORT TM. “I’m working with First Financial because I was excited when I heard the commitment to excellence the organization has. My involvement with the organization, teaching the employees, was particularly exciting because I was able to give people in the service industry means to accomplish success. I made up my mind, a commitment, to impact them positively and help them. If I’m successful in helping to teach service excellence to the Company, and if the Company is able to accomplish a higher level of service success, then we have aligned every employee and every employee feels a part of the organization more than before. Every employee understands the objective of the organization and every employee understands what it takes to live up to these nonnegotiables. In fact, we’ve developed 21 nonnegotiables, and if we live up to this and them, we will be superior to any competition. If you walk into our bank you will feel it and sense it from every employee. In fact, if you walk into any branch, you must feel the same thing: total excellence, total alignment to the objective of the organization. In the end, this alignment will be of great value to all concerned. To the investor, the customer, to every employee and every Horst Schulze speaking at one of 11 Regional Evening of Excellence Events. community as a whole. That’s the intent, and if you walk into our bank, you will feel that. I owe it to you to help you grow and be more excellent. Do you come to work to just paint a wall, or do you come to work to create a masterpiece?” Five-Year Vision: Horst Schulze Cofounder of Ritz-Carlton Hotels & Customer Service First Consultant We are a nationally recognized and respected financial institution. Our brand has the reputation of excellence in customer service, financial performance, employee empowerment and community leadership. We have become the employer of choice through a mutual commitment to these standards at every level of our organization. “Do you come to work to just paint a wall, or do you come to work to create a masterpiece?” Ten-Year Vision: We are the undisputed leader in the financial industry. We are respected for providing excellent and personalized customer service, delivering unparalleled value to our shareholders, enriching the lives of our employees and creating a positive impact on the communities we serve. We offer superior products and services that are understandable, personally relevant, complete and dependable. First Financial Bank’s Mission: We build loyal life-long relationships by providing first class service with personal attention, generating growth for the Company while creating exceptional value for our shareholders in an environment of opportunity for our dedicated and professional bankers. First Financial’s senior leadership team in the inaugural planning session with Horst Schulze. Horst Schulze Introduction :: Page 2 Mission and Vision :: Page 3 FI RS T F INANCIAL BANK’S 21 NON N EGOTIABLES (Continued) 1. Be professional at all times. As professionals, we maintain clean work stations, dress appropriately, and do not have food, drinks, or chew gum in customer contact areas. We ensure our cell phone use is limited and never interferes with customer service. 2. We will keep our facilities in immaculate condition. We are all responsible for ensuring our facilities are clean, organized, maintained properly, and welcoming to our customers. 13. Safety and security are everyone’s responsibility. Always stay current with the required security trainings. Know your role in an emergency situation and always protect our customers and employees, as well as bank assets. 14. Protecting our customers and the Company from fraud is everyone’s mission. Everyone actively supports the Company’s efforts to create better informed customers and communities. When you suspect fraud, follow our financial exploitation procedures or get help from your supervisor immediately. 3. We assist each other, stepping out of our primary duties to effectively provide service to our customers. We will always 15. Confidentiality is paramount. Always protect the confidential information of our customers and our company, both inside and be gracious and treat our customers and each other with respect and dignity. outside of the Company. 4. We take ownership of any problem or defect that we encounter. We will immediately do everything in our power to correct 16. Be positive both inside and outside the workplace. It is our responsibility to create a great environment and reputation for our the problem or defect and will follow up to ensure its proper resolution. company and each other. Serve as an ambassador for the organization at all times. 5. When a customer enters our work area, we will make eye contact and greet them within nine feet, calling them by name, if possible. We will greet them by saying, “Welcome” and “Good Morning/Afternoon” and asking how we can assist them. Whenever possible, we will stand up, walk from behind our desks, and shake the customer’s hand. 17. All forms of our communication (emails, letters, signage, advertising, hand-written notes, etc.) reflect the Company’s image and must be professional! 18. We are empowered and compelled to fulfill our customers’ needs. Identify their unique requirements and preferences and 6. Always give customers your complete, undivided attention and focus. Be responsive, caring, and timely in providing attempt to individualize their experience. 19. The suggested hours of operation are guidelines, not limitations for satisfying individual customer desires and preferences. 20. Knowledge of our job and the financial industry is essential to being the financial expert that our customers expect. Always take advantage of training opportunities to learn more and become an expert in your position and future positions in the Company. 21. First Financial Bank is a unique organization that strives for excellence in everything it does. Find enjoyment in the workplace and always look for opportunities to create WOW moments for our customers. service and follow up. 7. Before a customer leaves our work area, we will always say, “Thank you, Mr./Ms.____ for your business. Is there anything else that I can do for you?” 8. Answer the telephone within three rings and with a smile in your voice. Never let calls go to voicemail unless requested by the customer. When answering the phone, say, “Good Morning/Afternoon, thank you for calling First Financial Bank. This is _____. How may I help you today?” 9. Before transferring a phone call, ask the customer, “May I place you on a brief hold?”, conference the requested employee into the phone call with the customer, and provide an introduction between the customer and the employee. If the party is unavailable, ask the customer, “May I ask them to call you, or would you prefer their voicemail?” 10. Although final resolution may not yet be obtained, always respond to calls or emails as quickly as possible, but no later than 24 hours. 11. Always recognize our customers. No matter what your job function or what you are currently doing, stop and greet the customer and smile and offer assistance. 12. Whenever possible, when a customer asks for directions, take the time to personally escort them there. Do not point! If they are here for an appointment, while you are escorting them, introduce yourself and get their name so you can properly introduce them to the receptionist or the person with whom they are meeting. First Financial Bank’s 21 Nonnegotiables :: Page 4 First Financial Bank’s 21 Nonnegotiables :: Page 5 First Financial employees participating in the first ever daily lineup. A LE TTER TO OUR SHAREHOLDERS First Financial Bankshares is dedicated to excellence. We are therefore delighted to have Horst Schulze, cofounder and former President of the Ritz-Carlton Hotel Company, and one of the top customer service experts in the world, working with our company as a consultant. Horst is teaching us his methods for making our customer service the best in the industry, as well as teaching us how to be excellent in everything we do. I can’t tell you how excited I am that Horst is sharing his knowledge with us. In February 2019, he spent two days working with our management team, regional presidents and line-of-business managers. This experience was the best two days of my professional career. What we learned from Horst was so vast and so powerful that it affected not only my professional career but my personal life as well. With his input, we created five-year and 10-year vision statements, enhanced our mission statement and developed 21 nonnegotiables to ensure that our customers and shareholders receive excellent service every time they interact with a First Financial employee. These statements and principles are highlighted in the front of this annual report for your review. I am very excited about what this program will do for our company and for our customers, shareholders, employees, communities and each of us personally. We are making a huge investment that will differentiate us from every other financial institution in the country, bear fruit in the future and demonstrate to everyone that we truly put You—our shareholders, customers, employees and communities—First. Horst Schulze Cofounder of Ritz-Carlton Hotels & Customer Service First Consultant FINANCIAL RESULTS Last year marked our 33rd consecutive year of increased earnings. Net income for 2019 grew 9.4 percent to $164.8 million from $150.6 million in 2018. This increase was all organic since we did not complete an acquisition in 2019. Basic earnings per share for 2019 rose to $1.22 from $1.11 in the previous year. Although the Federal Reserve changed course from raising interest rates to reducing interest rates, our net interest margin increased to 3.98 percent from 3.96 percent. (The net interest margin is a key profitability metric that expresses net interest income on a tax-equivalent basis as a percentage of average interest-earning assets.) Our net interest margin was a very respectable result and placed us in the 78th percentile of our peer group of banks. The provision for loan losses decreased 47.7 percent to $3.0 million from $5.7 million in 2018. This decrease was due primarily to fewer charge-offs and larger recoveries than in 2018. Nonperforming assets as a percentage of loans and foreclosed assets totaled 0.61 percent at December 31, 2019, compared with 0.75 percent at December 31, 2018. Classified loans totaled $140.7 million at year-end 2019 compared with $126.3 million a year earlier. Noninterest income grew 6.5 percent to $108.4 million from $101.8 million, while noninterest expense rose 3.1 percent to $196.5 million from $190.7 million. We again outperformed our peer group of banks on several key financial metrics. Our return on average assets was 2.08 percent compared with 1.18 percent for our peers. Return on average equity was 14.37 percent versus our peers’ 10.52 percent. Our efficiency ratio, which expresses expenses as a portion of tax-equivalent revenues, was again solid last year at 48.61 percent, as opposed to our peers’ average of 60.47 percent. Our balance sheet showed good organic growth last year. Consolidated assets expanded 6.9 percent to $8.26 billion from $7.73 billion at the end of 2018. Loans grew 6.2 percent to $4.22 billion from $3.98 billion. Deposits increased 6.9 percent to $6.60 billion from $6.18 billion. Shareholders’ equity at year-end was $1.23 billion, up 16.5 percent from $1.05 billion at year-end 2018. Our First Financial Trust & Asset Management subsidiary had another solid year fueled by a large growth in trust assets. Total trust assets under management at year-end reached a book value of $4.86 billion, a 13.1 percent increase from $4.29 billion at the end of 2018. The market value of the assets totaled $6.75 billion, up 20.5 percent from $5.60 billion at year-end 2018. Total trust fee income for 2019 grew as well—to $28.4 million from $28.2 million—but that increase amounted to only 0.8 percent because of a $1.1 million decrease in oil and gas income. The trust company’s net after-tax earnings increased 2.7 percent to $13.9 million from $13.5 million the prior year. STRATEGIC ACQUISITION On January 1, 2020, we completed the acquisition of TB&T Bankshares, Inc. and its wholly owned subsidiary, The Bank & Trust of Bryan / College Station. The purchase price originally established was based on a $30.28 per share price for our common stock and totaled $190.0 million on the day both parties agreed to the pricing. In accordance with the terms of the definitive agreement, we issued approximately 6.3 million shares of First Financial common stock with an approximate value of $220.3 million to the shareholders of TB&T Bankshares since our stock price increased between the time of the agreement and the closing. In addition, under the agreement and prior to closing, TB&T Bankshares paid a special dividend to its stockholders totaling approximately $2.0 million. As of December 31, 2019, The Bank & Trust of Bryan / College Station had total assets of approximately $631.1 million, total loans of approximately $455.4 million and total deposits of approximately $551.9 million. With the acquisition of this bank, which has five branches, our banking operations now include 78 locations that span an area from Hereford in the Panhandle to Orange in Southeast Texas. We are excited to welcome the TB&T team into the First Financial family. This well-managed, high-performing bank, in the high-growth Bryan / College Station market, is an excellent addition to our company. With the new and expanded products and services (including state-of-the-art mobile banking, treasury management services, trust services and a larger lending capacity), that First Financial will be adding to TB&T’s operations, we expect this new 12th region to grow and contribute nicely to our bottom line. A Letter To Our Shareholders :: Page 6 A Letter To Our Shareholders :: Page 7 REAL ESTATE ACTIVITIES In January 2019, we opened a new branch at 3563 Riley Fuzzel Road in Spring, Texas. This Spring branch is located on Grand Parkway at Birnham Woods, which our property expert says is one of the best locations in our footprint because of the demographics of this area. It is also a good connection between our Kingwood and Conroe locations and expands our market north of Houston. In March 2019, we moved into a beautiful new, state- of-the-art banking building in Orange. This new home office for our Southeast Texas Region is strategically placed one block away from our former location and is a nice addition to Orange, especially after the devastation of Hurricane Harvey. In January 2020, we began construction to expand the parking and drive-in facilities at our North Main location in Weatherford. This upgrade will allow much better access for customers and provide additional parking for this growing area of Weatherford. One of the by-products from acquiring banks is that we often obtain large, older buildings that are inappropriate for us (because they are too large, inefficient and costly to maintain) and do not meet our customers’ needs in today’s banking environment. We have had much success through the years to sell/gift these buildings to municipalities that need the additional space. These municipalities acquire the buildings at a much cheaper price than they would pay to construct new facilities, and they are able to retrofit them to meet their needs. To date, we have completed these transactions in Orange, San Angelo, Weatherford and Cleburne. At the same time, we are constructing smaller, more cost-effective buildings that provide state-of-the-art banking and better access for our fast-paced customers of today. Over the last five years, we have built seven new locations, remodeled four branches and retrofitted 37 locations, all with LED fixtures and high-efficiency mechanical systems to reduce electrical costs and meet environmental standards. By the end of 2020, we will have completely retrofitted all 78 of our locations. A Letter To Our Shareholders :: Page 8 First Financial Bank’s Spring Branch First Financial Bank’s Orange Branch MANAGEMENT CHANGES In January 2019, Justin Hooper added the titles of Chairman and CEO to his existing title of President upon Jay Gibbs’s retirement from the Weatherford Region. Jay had been with the Bank for 16 years and had led the region as Chairman and CEO for the past six years. In April 2019, Marcus Morris was promoted to President and CEO of the Fort Worth Region to replace Martin Noto, who accepted a position with a Dallas bank. Marcus started at First Financial in 2010 as a Commercial Loan Analyst in Abilene, and in 2012 was promoted to Commercial Loan Officer in Keller. He is one of six regional presidents who have moved up through our internal management training programs. Also in April, Will Christoferson was promoted to Senior Vice President of Advertising and Marketing upon the retirement of Michele Stevens, who had been with the Company for 22 years. Before his promotion, Will had been Vice President of Advertising and Marketing. Will is an Abilene native and has had more than 10 years of banking experience. Before joining First Financial Bankshares, he was a Commercial Sales and Marketing Officer for a major banking institution. In May 2019, Shelley Dacus was promoted to President of our Kingwood Region. Shelley has had more than 15 years of banking experience, most recently as Kingwood’s Executive Vice President and Senior Lending Officer. Before joining our company, she had been part of the team at Commercial State Bank, which was acquired by First Financial Bank in 2018. Shelley is the second woman to be promoted to a regional president position at First Financial Bankshares, Inc. In October 2019, Robert de la Cruz was promoted to Chairman, President and CEO of the Hereford Region upon the announcement that Mike Mauldin was retiring to become the Inaugural Director of the Excellence in Banking Program at Texas Tech University’s Rawls College of Business. Mike had been Chairman, President and CEO of the Hereford Region for the past 17 years and was an excellent selection to lead the Excellence in Banking Program. Robert is a first- generation college graduate who started with the Bank 16 years ago in our contact center. He is the sixth regional president to start with our bank directly after college and advance through our numerous training programs and positions to the role of president. Robert is also our first Hispanic regional president, reflecting the importance of diversity in our company. Also in October 2019, J. Bruce Hildebrand, CPA, Executive Vice President and Chief Financial Officer, announced his intention to retire from the Company in August 2020. We have initiated a national search for his successor. I have had the pleasure of working side by side with Bruce for the past 17 years. He is one of the most professional, dedicated and knowledgeable CFOs that I know, and he has certainly shaped this company to be one of the top financial institutions in the country. I look forward to working with him through August and at the same time finding the right person to replace him. We certainly thank Jay Gibbs, Michele Stevens and Mike Mauldin for their long and valued service to our company, and we congratulate them on their well- deserved retirements and new endeavors. DIVERSITY AND INCLUSION First Financial Bankshares embraces and promotes a culture of diversity and inclusion. We continue our efforts to attract, recruit and retain employees who bring to our company diverse backgrounds, orientations, beliefs, cultures and interests. Having a diverse team strengthens our company by bringing together people with different ideas, skills and experiences, and by enabling all our customers, regardless of their race and other characteristics, to feel at home when they visit one of our locations. We are pleased that through these programs, we have been able to promote our second woman regional president and our first Hispanic regional president, as well as to elect our second woman director. We were honored in April 2019 by the Abilene branch of the American Association of University Women for empowering women within our company. We are proud to be recognized by this association, which we strongly support because of its program to recognize women of distinction and provide scholarships for women to complete their quest for higher education. We couldn’t be more excited about the number of young professionals that we have throughout our company who are being trained and mentored for higher level positions. Their ascent within this company is testimony to their drive for excellence and to our company’s commitment to assist them. We are honored to highlight a few of these emerging leaders on page 11. 1,435 EMPLOYEES 28% | 72% EMPLOYEE DIVERSITY RACIAL MINORITIES FEMALE 72% MALE 28% 29.1% MINORITY A Letter To Our Shareholders :: Page 9 BOARD OF DIRECTOR CHANGES At the January 2020 Board of Directors meeting, Vianei Lopez Braun was elected to the Board of Directors of the Company and appointed to the Fort Worth Region Board of Directors. She leads the Labor and Employment section for Decker Jones PC, a full-service law firm based in Fort Worth, and serves as Chief Development Officer for the firm. An honors graduate of Princeton University and the University of Texas School of Law, Vianei Braun has been practicing law for more than 25 years, with previous tenures in Houston and Abilene. In her law practice, she serves large publicly traded companies as well as private employers and individual professionals and executives. She has been recognized as a Texas Monthly “Super Lawyer” in labor and employment law and was selected as a “Top Lawyer” in the labor and employment field by Fort Worth, 360 West, H Texas and Houstonia magazines. She has also been honored as a “Great Woman of Texas” by the Fort Worth Business Press. Vianei Lopez Braun We want to thank Ron Giddiens and Ross H. Smith Jr., who are retiring from the Board in April 2020. Ron Giddiens, of San Angelo, is a partner in D&G Consulting; he has been on the Board for 11 years and has served on the Audit Committee, the Bank Directors’ Loan Committee and the Asset Liability Management Committee. He has also served on the San Angelo Region Board of Directors. Ross H. Smith Jr., from Orange, is Chairman and President of Akrotex, Inc. and owner of Sabine River Ford, Inc.; he has served on the Board for six years. During that time, he has been on the Compensation Committee and the Bank Directors’ Loan Committee. He has also served on the Southeast Texas Region Board of Directors. Both gentlemen have been very valuable members of our Board, Committees, and respective regional boards. We will miss their counsel and support, and we thank them for their outstanding service. LOOKING AHEAD With the internal growth we realized in 2019 and our January 2020 acquisition of TB&T Bankshares in Bryan / College Station, we have moved into 2020 with a great deal of momentum and excitement. The Texas economy continues to perform very well, as shown by the state’s record of creating over 350,000 new jobs a year. Thanks to the training and mentoring we have received from Horst Schulze, and with our new vision statements and 21 nonnegotiables, our entire team is now even more focused on excellence in everything we do. We are striving to provide outstanding and personalized customer service, deliver unparalleled value to our shareholders, enrich the lives of our employees, and create a positive impact on the communities we serve. We have some real opportunities to continue improving our bottom line by growing loans and deposits, increasing the net interest margin, enhancing noninterest income, and decreasing expenses. As in the past, we are proceeding strategically and searching diligently, to acquire at the right price well-managed banks that fit our culture and will bring long-term value to our company. Our accomplishments and strong performance does not just happen, but rather come from the dedication and hard work of a very professional team made up of the Board members, officers and employees whom I have the honor of working with. I thank each of them along with our customers, stockholders and communities for making this company what it is today. Thank you for your loyalty and support. F. Scott Dueser Chairman, President and CEO EM E RGI NG EX CEL LEN CE We could not be more pleased with our large group of young professionals who are emerging through our numerous education and training programs and are advancing to higher level positions. They are the future of our company and here we highlight just a few of our emerging leaders: Robert de la Cruz, President, Hereford Robert started in the First Financial Customer Care Center in 2003 and was promoted to a loan review analyst soon thereafter. He worked in the Company’s loan analyst program before being offered a lending position in the Hereford region and became the Executive Vice President of lending in 2018. A graduate of FFIN University, Robert was promoted to Chairman, President, and CEO of the Hereford Region in 2019. “I am forever grateful for First Financial. Both of my parents are from Mexico and they came to the U.S. to provide a better life for their children. I can honestly say that they succeeded with that part of their dream.” Adriana Tatmon, Consumer Lender, Conroe Adriana started her career as an Abilene part-time teller after being identified by Patty Fuentes for her customer service skills while working at a department store. She became a full-time teller and was quickly promoted to personal banker and then to assistant branch manager. Adriana was recently promoted to a consumer lender in our Conroe region. “I believe First Financial has always been a part of God’s plan for me. I took full advantage of the tuition reimbursement offered by the Company and I am grateful First Financial allows me to learn, grow, and excel on campus, at work, and throughout the community. ” Patty Fuentes, Retail Administrator, Abilene Patty began her career at First Financial as a personal banker and was quickly promoted to a retail manager of an in-store branch and promoted again to a lobby manager. As Senior Vice President of Retail Administration, Patty oversees more than 15 branches in the Abilene region. “First Financial spent the time and the money for our employees to earn their degree while working full-time. We have so much opportunity here, and as an employee, I am so grateful to feel like I belong to such a great family.” Carley Dyck, Operations, Fort Worth Carley began her career at First Financial as a part-time teller while she attended college. “First Financial understood the importance of my education and we worked together on making a schedule that worked well for both of us.” She was promoted to loan operations, then credit analyst, and was recognized as a Shining Star for her region. A graduate of FFIN University, Carley was recently promoted to Senior Vice President of Operations for the Fort Worth and Southlake Regions. Alex Thomas, First Finance, Conroe Alex started with First Financial as a loan analyst in Abilene and was promoted to help launch the First Finance program for the Company. After being an integral part of the First Finance launch team, Alex was promoted to Vice President of First Finance for the Conroe Region. “One of my favorite things about my career with First Financial Bank so far is that it has helped me view life through the eyes of others, and in return I am able to help our customers with care and respect. I appreciate the respect that is shown back to me, both by my colleagues and by our clients.” Shelley Dacus, President, Kingwood Shelley joined First Financial through the acquisition of Commercial State Bank in 2018, was promoted to President of the Region in 2019 and is an FFIN University graduate. “In my time at the Company, I’ve been given so much opportunity to grow as a person and as a banker. First Financial has provided tremendous opportunity for advancement while being able to balance being a single mother of two amazing children.” Zach Reyes, Trust Manager, San Angelo Zach began his career with First Financial Trust in Abilene as an Assistant Vice President with the trust company. He was promoted to Vice President in 2019 and was recently promoted to Senior Vice President and San Angelo Trust Office Manager. “I appreciate working for a company that allows good ideas and thoughtful decisions to flourish. I’m grateful that this company has given me the opportunity to advance my career and enter a leadership role within First Financial Trust where I can guide others to the bank’s nonnegotiable of doing whatever is best for the client.” A Letter To Our Shareholders :: Page 10 Emerging Excellence :: Page 11 FI RS T F INANCIAL FOOTP RI NT FIRST FINANCIAL BANK LOCATIONS Abilene ........... 325.627.7200 El Campo ...... 979.543.6441 Odessa ........ 432.367.8900 Acton .............. 817.573.6900 Fort Worth ..... 817.410.4979 Orange ........... 409.883.3563 Albany .............. 325.627.7905 Glen Rose ........ 254.897.4808 Palacios ......... 361.972.2585 Aledo .............. 817.341.5200 Granbury ........ 817.573.6900 Port Arthur ..... 409.736.5951 Alvarado ......... 817.774.5150 Grapevine ...... 817.722.8980 Ranger ............ 254.629.6729 Beaumont ...... 409.600.6456 Hereford ......... 806.363.8200 Rising Star ..... 254.629.6703 Boyd ............... 940.683.8760 Huntsville ...... 936.295.2224 Roby ............... 325.776.2261 Bryan ............ 979.260.2100 Katy-Fulshear .. 281.346.0221 San Angelo .... 325.659.5900 Bridgeport ..... 940.683.8700 Keller ............. 817.329.8625 Southlake ...... 817.410.2915 Brock ............. 817.596.0307 Kingwood ...... 281.318.4600 Spring ............. 346.328.6910 Burleson ........ 817.774.5175 Magnolia ....... 936.273.4700 Stephenville ... 254.965.5036 Cisco .............. 254.629.6111 Mauriceville ... 409.745.3755 Sweetwater ... 325.235.6600 Cleburne ........ 817.774.5100 Merkel ........... 325.928.1111 Tomball .......... 281.516.7835 Clyde .............. 325.627.7910 Midlothian ..... 972.723.7100 Trent .............. 325.862.6121 College Station... 979.260.2100 Mineral Wells .. 940.327.5400 Trophy Club .... 817.329.8615 Conroe ............ 936.760.1888 Montgomery .. 936.597.5997 Vidor ............... 409.769.8478 Cut and Shoot .... 936.788.2121 Moran ............ 325.627.7953 Waxahachie ... 972.723.7100 Decatur .......... 940.683.8780 Newton ......... 409.224.7506 Weatherford ... 817.598.2500 Eastland ......... 254.629.6188 New Waverly .. 936.344.2224 Willis ............. 936.890.3500 Willow Park ... 817.598.2780 FIRST FINANCIAL TR UST LOCATIONS Abilene 400 Pine Street, Suite 300 325.627.7100 Beaumont 3515 Dowlen Road 409.600.6460 Fort Worth 1000 Forest Park Blvd., Suite 200 817.410.4970 Kingwood 24080 Hwy 59 North, Suite 200 281.318.4625 San Antonio (New Office) Opens 2020 210.912.9662 Odessa 3555 Billy Hext Road 432.367.8900 San Angelo 222 S. Koenigheim St. 325.659.5987 Sweetwater 201 Elm Street 325.235.6644 Stephenville 2201 W. South Loop 254.918.6262 First Financial Footprint :: Page 12 First Financial Locations :: Page 13 FINANCIAL HIGHLIGHTS IN THOUSANDS (except for share data) IN THOUSANDS (except for share data) FOR THE YEAR 2019 2018 % INCREASE FOR THE YEAR 2019 2018 % INCREASE NET INCOME $164,812 $150,638 9.41% AT YEAR-END Basic Earnings (PER SHARE) $1.22 $1.11 9.91% Dividends Declared $63,135 $55,499 13.76% Dividends (PER SHARE) $0.47 $0.41 14.63% Assets Securities Loans Deposits $8,262,227 $7,731,854 6.86% $3,413,317 $3,158,777 8.06% $4,223,197 $3,975,308 6.24% $6,603,806 $6,180,389 6.86% $7,939,122 $7,606,732 $3,283,398 $3,197,107 $4,074,667 $3,828,040 $6,345,755 $6,176,619 4.37% 2.70% 6.44% 2.74% Shareholders’ Equity $1,227,197 $1,053,295 16.51% Book Value Per Share $9.03 $7.77 16.22% Trust Assets (Book Value) $4,855,736 $4,293,615 13.09% AVERAGES Assets Securities Loans Deposits Shareholders’ Equity $1,146,567 $980,206 16.97% 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) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Ten-Year Compound Growth Rate $3,776,367 $441,688 $59,659 $4,120,531 $508,537 $68,369 $4,502,012 $556,963 $74,225 $5,222,208 $587,647 $78,868 $5,848,202 $681,537 $89,559 $6,665,070 $804,986 $100,381 $6,809,931 $837,885 $104,774 $7,254,715 $922,768 $120,371 $7,731,854 $1,053,295 $150,638 $8,262,227 $1,227,197 $164,812 $0.48 $0.55 $0.59 $0.62 $0.70 $0.78 $0.80 $0.91 $1.11 $1.22 $0.23 $0.24 $0.25 $0.26 $0.28 $0.31 $0.35 $0.38 $0.41 $0.47 – 3/2 split – – 2/1 split – – – – 2/1 split $3.52 $4.04 $4.42 $4.59 $5.32 $6.10 $6.34 $6.97 $7.77 $9.03 $8.55 $8.36 $9.76 $16.53 $14.94 $15.09 $22.60 $22.53 $28.85 $35.10 9.68% 11.43% 11.85% 10.99% 7.41% – 10.49% 14.53% Adjusted for stock dividends and splits NET INCOME GROWTH (in thousands) KEY RATIOS 2019 2018 2019 COMMON STOCK MARKET VALUE AND DIVIDEND DATA NET INTEREST MARGIN 2015 $100,381 2016 $104, 774 2017 $120,371 2018 $150,638 2019 $164,812 Return On Avg. Assets 2.08% 1.98% Return On Avg. Equity 14.37% 15.37% Year-End Equity/Assets 14.85% 13.62% Efficiency 48.61% 49.72% QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $36.45 $32.01 $35.10 $0.12 Third $33.97 $29.50 $33.33 $0.12 Second $31.54 $28.00 $30.79 $0.12 First $32.65 $27.13 $28.89 $0.11 2015 4.12% 2016 4.08% 2017 4.01% 2018 3.96% 2019 3.98% RETURN ON AVERAGE EQUITY EFFICIENCY RATIO 2018 COMMON STOCK MARKET VALUE AND DIVIDEND DATA RETURN ON AVERAGE ASSETS 2015 13.60% 2016 12.36% 2017 13.63% 2018 15.37% 2019 14.37% 2015 47.61% 2016 49.22% 2017 49.26% 2018 49.72% 2019 48.61% QUARTER HIGH LOW CLOSE DIVIDENDS Fourth $33.42 $26.73 $28.85 $0.11 Third $30.93 $25.28 $29.55 $0.11 Second $28.18 $22.53 $25.45 $0.11 First $24.80 $22.03 $23.15 $0.10 2015 1.61% 2016 1.59% 2017 1.72% 2018 1.98% 2019 2.08% Financial Highlights :: Page 14 Financial Highlights :: Page 15 ABILENE REGION Abilene | Clyde | Moran | Albany | Odessa | Eastland | Ranger | Rising Star | Cisco | Sweetwater | Merkel | Trent | Roby Senior Officers Ronald D. Butler II Chairman and CEO Marelyn Shedd President David W. Bailey President, Eastland Division Joseph Crouch President, Sweetwater Division Rodney Foster Executive Vice President Senior Lending Officer, Sweetwater Vance Jones Executive Vice President Commercial Lending Jay Kidwell Executive Vice President Commercial Lending, Eastland Janet O’Dell Executive Vice President Mortgage Loans Andrea Smiddy-Schlagel Executive Vice President Treasury Management Charles E. Tennesson Executive Vice President CFO and Chief Operations Officer Michael Wolverton Executive Vice President Consumer Lending Debbie Anthony Senior Vice President Vanessa Faz Senior Vice President Patty Fuentes Senior Vice President Bob Glosson Senior Vice President Jim Goldston Senior Vice President Landon Hammond Senior Vice President Evan Harris Senior Vice President Candi Kanady Senior Vice President Marshall Morris 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 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $2,546,087 $1,037,688 $1,948,559 $49,774 Dec. 31, 2019 $2,725,127 $1,052,256 $2,138,476 $53,092 2.00% 2.03% 43.83% 42.33% MAIN OFFICE 400 Pine St. | Abilene, TX 79601 | 325.627.7200 Abilene “This journey we’ve been on with Horst throughout 2019 has been a game-changer for our company, and I see the changes every day. We’ve always offered good customer service, but now I can see that it’s great customer service, and it’s only getting better. We thank our customers in the Abilene, Sweetwater and Eastland Divisions for letting us put them FIRST.” Ronald D. Butler II Chairman and CEO Marelyn Shedd President Bank Information :: Page 16 ABILENE REGION (CONTINUED) Regional Directors Ronald D. Butler II Chairman and CEO Marelyn Shedd President David W. Bailey President, Eastland Division Joseph Crouch President, Sweetwater Division 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 Tim Lancaster Former President and CEO Hendrick Health System 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 Geoff Haney President, CEO, Partner Cape and Son Commodity Merchandising Jim Keffer President EBAA Iron Sales, Inc. Jay Lawrence President MAL Enterprises, Inc. Kirk Massey Investments Larry May May & Hrbacek CPAs Stanley Morris, Jr. Investments Jim Moylan, Jr. Partner MOTEC, Ltd Brian Perry Insurance, Investments Thomas L. Rees, Jr. Rees, Rees & Fuller, Attorneys Leigh Taliaferro, M.D. Physician EASTLAND OFFICE 201 E. Main St. | Eastland, TX 76448 | 254.629.6100 SWEETWATER OFFICE 201 Elm St. | Sweetwater, TX 79556 | 325.235.6600 David W. Bailey President, Eastland Division Joseph Crouch President, Sweetwater Division Bank Information :: Page 17 CLEBURNE REGION Cleburne | Burleson | Alvarado | Midlothian | Waxahachie CONROE REGION Conroe | Montgomery | Magnolia | Willis | Tomball | Cut and Shoot | Huntsville | New Waverly | Spring Cleburne “Ralph Waldo Emerson once said, ‘What you do speaks so loud that I cannot hear what you say.’ This applies directly to our dedication to Excellence. Our 21 nonnegotiables are wonderful, but they can’t just be words on paper. The nonnegotiables must be acted out each and every day because we are held accountable by our customers, shareholders, employees, and communities. If our words are not followed up by our actions, we aren’t being true to our dedication to excellence.” Austin Elsner Chairman, 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, 2018 $553,299 $195,672 $497,224 Dec. 31, 2019 $505,423 $205,714 $443,079 $8,007 $8,497 1.73% 1.84% 53.61% 52.70% Jaye Weishuhn Senior Vice President Chief Operations Officer Senior Officers Austin Elsner Chairman, President and CEO Duane Thomas Market President Russell Phillips Executive Vice President Commercial Lending Alecia Bland Senior Vice President Regional Board of Directors Austin Elsner Chairman, President and CEO Ray Beavers Retired General Manager and CEO United Cooperative Services Ronald D. Butler II First Financial Bankshares, Inc. Bank Information :: Page 18 Kim Hamilton Senior Vice President John Knight Senior Vice President Chris Schjetnan Senior Vice President Stacey Sloan Senior Vice President Robert Childress III Childress Engineers Mark Hill Utility Construction Consultant Tim Lyness Lyness Construction, LP Jack Scott Bell-Scott Insurance Group IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $659,492 $474,416 $541,753 Dec. 31, 2019 $652,666 $501,385 $529,660 $11,284 $12,150 1.71% 1.86% 55.45% 55.27% Senior Officers Sam W. Baker Chairman, President and CEO Kirby Cason President, Huntsville Division G. Bart Griffith Executive Vice President Senior Lending Officer Lee Warren Executive Vice President Chief Operations Officer Michelle Murray Executive Vice President Treasury Management Chris Baughman Executive Vice President Guy Barker Senior Vice President Bobby Brennan Senior Vice President Mortgage Lending Terry Doak Senior Vice President Candy Emmerich Senior Vice President Cody Sundbeck Senior Vice President Kyle Whisenhunt Senior Vice President Regional Board of Directors Sam W. Baker Chairman, President and CEO Kirby Cason President, Huntsville Division Harry J. Brooks Chairman and CEO First Financial Bank, Kingwood Donnie Buckalew Buckalew Chevrolet John J. Certa, Jr. Owner Team Auto Group Casey Collum Owner Collum Development Candyce F. Dixon CPA Chris deMilliano Operations Manager Steely Lumber Company Dan Dominey DBD Interests F. Scott Dueser First Financial Bankshares, Inc. Randy Roan Commercial Construction John Sebastian Conroe Golf Cars Lloyd Tisdale Investments Robert C. Ernst Jr. Owner Ernst Jewelers J. Bruce Hildebrand, CPA First Financial Bankshares, Inc. Curtis Montgomery, MD Physician Robert Pate Retired President - Huntsville Johnny Peet Jr., M.D. Physician MAIN OFFICE 1800 W. White Oak Terrace | Conroe, TX 77304 | 936.760.1888 HUNTSVILLE OFFICE 33 SH 75 North | Huntsville, TX 77320 | 936.295.2224 Conroe “2019 was a pivotal year as we made strides to advance customer service to another level. Top-notch service has always been our priority, but our new company-wide dedication to excellence has truly been a game changer. Daily line up discussions focus on various aspects of how we can all make your experience exceptional as our valued customers. We encourage and welcome your feedback and look forward to serving you in 2020 and beyond.” Sam W. Baker Chairman, President and CEO Kirby Cason President, Huntsville Division Bank Information Page :: 19 FORT WORTH REGION HEREFORD REGION Fort Worth “The focus to be excellent wasn’t about asking our team to be something different or change who they are. The more we worked on defining what it meant to be excellent, we kept coming back to lessons we learned from our families. Our communities and partners deserve the very best versions of ourselves. When we are passionate, genuine, and committed to our customers they can feel it. Being excellent takes a different shape every day, but the commitment is the same. We are working on being always aware of opportunities to amaze. It is a process, but we are well on our way.” Marcus Morris President and CEO IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $203,853 $144,677 $170,061 Dec. 31, 2019 $229,995 $150,512 $192,774 $4,155 $4,499 2.02% 2.04% 45.49% 44.71% Senior Officers Robert de la Cruz Chairman, President and CEO Tim Laws Executive Vice President Senior Lending Officer MAIN OFFICE 1000 Forest Park Blvd | Fort Worth, TX 76110 | 817.410.4979 Regional Board of Directors IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME (LOSS) RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $148,047 $136,444 $76,704 Dec. 31, 2019 $175,789 $164,706 $73,299 ($486) $1,369 (0.60%) 2.20% 97.15% 66.05% Senior Officers Marcus Morris President and CEO Les Mariotti Executive Vice President Chief Operations Officer Carley Dyck Senior Vice President Operations Regional Board of Directors Murray Edwards Chairman of the Board Principal, The Edwards Group Marcus Morris President and CEO Larry Anfin Past CEO Coors Distributing of Fort Worth Smith A. Brownlie III CPA and Co-Founder Brownlie & Braden Bank Information :: Page 20 Ronald D. Butler II First Financial Bankshares, Inc. Mary Lee Cruz Founding Partner E Source, Inc. Nancy Jones Past President and CEO North Texas Community Foundation Stephen Kimmel Chief Financial Officer Cook Children’s Health Care System Vianei Lopez Braun Chief Development Officer Decker Jones, P.C. Matt Morris President Gus Bates Insurance Paul Poston President Wellington Insurance Robert de la Cruz Chairman, President and CEO Ronald D. Butler II First Financial Bankshares, Inc. Steve Lewis, D.V.M. Manager and Senior Partner Hereford Veterinary Clinic Kade Matthews Ranching and Investments Mike Mauldin Director of Excellence in Banking Rawls College of Business Texas Tech University Sally Noyce Human Resources Manager Panhandle Express, LLC Jerry Stevens Owner, Stevens 5-Star Car and Truck Center Johnny E. Trotter President and CEO Livestock Investors, Ltd. MAIN OFFICE 212 E. Third St. | Hereford, TX 79045 | 806.363.8200 Hereford “Our recent reiteration to customer service excellence has made a meaningful impact for the Hereford Region. We are grateful to everyone who has commented on the service they receive from our bank. We are a bank family and that family extends to our customers. I would like to thank all of our dedicated and professional bankers striving for excellence; the Bank was able to realize gains in assets, loans, and deposits in the Hereford Region.” Robert de la Cruz Chairman, President and CEO Bank Information :: Page 21 MAIN OFFICE 24080 Hwy 59 N. Suite 250 | Kingwood, TX 77339 | 281.318.4600 Regional Board of Directors KINGWOOD REGION Kingwood | El Campo | Fulshear | Palacios Kingwood “It’s what you do every day that matters. The Kingwood team prides itself on consistency and hard work. The friends and relationships we’ve developed over the years is the driver of our success internally and externally. It’s about showing up everyday fully engaged and doing the right thing for the Bank and our customers. The greatest benefit of it all is knowing we played a small part in helping build people’s dreams and helping achieve their goals.” Harry J. Brooks Chairman and CEO Shelley Dacus President IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $364,998 $318,722 $300,792 Dec. 31, 2019 $437,057 $388,185 $366,338 $6,055 $7,967 1.63% 1.90% 56.13% 48.38% Senior Officers Harry J. Brooks Chairman and CEO Shelley Dacus President and Senior Lending Officer James Alexander Executive Vice President Commercial Lending Jeff Fuechec Executive Vice President El Campo Market President Regional Board of Directors Harry J. Brooks Chairman and CEO Kingwood Region Sam Baker Chairman, President and CEO Conroe Region Jeff Cravey Principal Jeffrey M. Cravey PC Shelley Dacus President and Senior Lending Officer Kingwood Region Bank Information :: Page 22 Lee Warren Executive Vice President Chief Operations Officer Doug Faver Executive Vice President Ken Johnson Executive Vice President Brian Bonner Senior Vice President 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 Brandon Zabodyn Senior Vice President Commercial Lending Nancy Powell Senior Vice President Angela Leviner President The Forest Collection, Inc. Ronnie Matthews Owner Great American Title Robert C. Nickles Jr. Principal Alegacy Group Rebekah Shipman President & CEO Reservoir Data Systems SAN ANGELO REGION IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $747,422 $207,503 $632,514 Dec. 31, 2019 $856,167 $204,222 $751,992 $13,912 $14,906 1.87% 1.94% 37.48% 36.93% Senior Officers Chris Evatt Chairman, President and CEO Cindy George Executive Vice President Chief Operations Officer Lindy Jordan Executive Vice President Senior Lending Officer Chris Evatt Chairman, President and CEO Ronald D. Butler II First Financial Bankshares, Inc. Hon. Marilyn Aboussie Chief Justice, Retired Steve Eustis Commercial Real Estate Reba Priddy Senior Vice President Luke Uherik Senior Vice President Mary Jane Steadman Attorney, Real Estate Investment Management Edward Carrasco Senior Vice President Pat Cottle Senior Vice President Wes Masters Senior Vice President Spencer Murphy Senior Vice President Ron Giddiens Investments Partner, D&G Consulting David F. Lupton President Angelo Glass & Mirror Company, Inc. Reagon Noble, D.D.S., M.S. Noble McClintock Orthodontics Carlos Rodriguez Attorney Webb, Stokes and Sparks MAIN OFFICE 222 S. Koenigheim | San Angelo, TX 76903 | 325.659.5900 San Angelo “The success of the San Angelo Region can be directly contributed to two things: our dedication to our customers and our dedication to excellence. Working with Horst Schulze and developing the 21 nonnegotiables have become a daily part of what we do at our bank. Each employee is focused on making every customer interaction excellent. I’d like to thank our employees, board of directors, and especially our customers for making 2019 one of the best years for the San Angelo Region. We are excited to continue providing world-class service to all of you again in 2020 and to continue to put YOU FIRST.” Chris Evatt Chairman, President and CEO Bank Information :: Page 23 SOUTHEAST TEXAS REGION Orange | Vidor | Mauriceville | Newton | Port Arthur | Beaumont Southeast Texas “Hurricanes and tropical storms can cause a great deal of adversity for the entire state. Our Southeast Texas team continues to overcome any amount of adversity they may face, and I am so proud of them. Keeping true to our nonnegotiables, we are there for our customers when they need us the most, and I think that is very special. Every employee knows what it takes to put our customers and communities first, and that passion is embodied in our Texas Strong mentality. 2019 was a big year for our region and I look forward to providing world class service in 2020 and for years to come.” Stephen Lee President and CEO MAIN OFFICE 912 N. 16th St | Orange, TX 77630 | 409.883.3563 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $584,018 $405,786 $488,496 Dec. 31, 2019 $642,880 $439,670 $540,196 $11,449 $12,186 1.91% 1.93% 46.60% 49.18% Senior Officers Stephen Lee President and CEO Blaine Caillier Mid County Market President Commercial Lender Robert Kocot Beaumont Market President Commercial Lender Regional Board of Directors Tommy Gunn Chairman of the Board Attorney at Law Stephen Lee President and CEO Ronald D. Butler II First Financial Bankshares, Inc. Dr. Ray Callas Managing Partner Anesthesia Associates, PLLC Len Forey Managing Partner Higginbotham Insurance Bank Information :: Page 24 Joe Love Executive Vice President Commercial Lender Kim Dickerson Senior Vice President Chief Operations Officer Cindi LaChance Senior Vice President Mortgage Loan Officer Jim Gilliam Partner and Chairman, The HT Group Owner and CEO, Bates & Co. Chad Mason Vice President Mason Construction Michael Poutra Retired Owner Dominion Forms Walter Riedel Board Chairman Nelda C. and H.J. Lutcher Stark Foundation Curt Leger Senior Vice President Commercial Lender Lani White Senior Vice President Consumer Lender Dayna Simmons Owner Team Dayna Simmons Real Estate Ross H.Smith, Jr. President, Akrotex, Inc. Owner, Sabine River Ford and Volkswagen of Lake Charles Kevin Williams President, Cypress Bayou Industrial Owner, American Industrial Minerals, Inc. Jim Wimberley Owner Law Offices of Jim Wimberley SOUTHLAKE REGION Southlake | Trophy Club | Keller | Bridgeport | Boyd | Decatur | Grapevine IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $504,778 $388,885 $440,891 Dec. 31, 2019 $574,062 $418,873 $502,443 $9,607 $11,142 1.86% 2.02% 52.39% 49.99% Senior Officers Mark L. Jones Chairman, President and CEO F. Mills Shallene Market President, Wise County Les Mariotti Executive Vice President Chief Operations Officer Regional Board of Directors Mark L. Jones Chairman, President and CEO Ronald D. Butler II First Financial Bankshares, Inc. Traci Bernard President Texas Health Southlake William Ray Cook, Jr., CPA Cook, McDonald & Company Tom Pulley Executive Vice President J. Sean Shope Executive Vice President Ryan Wall Executive Vice President Carley Dyck Senior Vice President Operations Martin W. Schelling Conifer Real Estate J. Gary Shelton Chain Supermarket Owner, Real Estate Investor Stan Stephens President Stephens Pneumatics Inc. Terry Wilkinson Wyndham Properties, Ltd. MAIN OFFICE 151 W. Southlake Blvd. | Southlake, TX 76092 | 817.410.2915 Southlake “It has been a tremendous honor and pleasure to work with the Southlake Region employees and see the level of commitment each of them has in making our community a better place to live. The depth of love my colleagues have for those in need is astonishing. Their love is demonstrated every day, on very personal levels, by assisting others who have no choice other than to do without. The Region has done everything from preparing meals for the elderly and building bicycles for children of low-income families to driving customers without transportation to run errands or donating time and money to first responders. This region loves people and their community and that is highlighted by how we treat everyone with respect, dignity and our can-do attitude that we have refined through our alliance with Horst Schulze. My sincere appreciation and heartfelt thanks go out to all First Financial employees.” Mark L. Jones Chairman, President and CEO Dickie Greenwood Senior Vice President Isbet Najera Senior Vice President Ryan Sonntag Senior Vice President Tracie Talkington Senior Vice President Bank Information :: Page 25 STEPHENVILLE REGION Stephenville | Granbury | Glen Rose | Acton | Mineral Wells WEATHERFORD REGION Weatherford | Aledo | Willow Park | Brock Stephenville “Working with Horst Schulze has given new meaning to our Customer Service First mindset. Every day we strive to be the very best for our customers, and every day we are reminded how special each customer is. As our company and region continue to grow, we will make customer relationships a priority. You have the Stephenville Region’s commitment to put YOU FIRST every day.” Trent Swearengin Chairman, President and CEO MAIN OFFICE 2201 W. South Loop | Stephenville, TX 76401 | 254.965.5036 IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $843,698 $426,754 $719,035 Dec. 31, 2019 $856,235 $416,815 $717,752 $17,374 $18,505 2.11% 2.21% 45.20% 44.31% Senior Officers Trent Swearengin Chairman, President and CEO Cory Crenshaw Mineral Wells Market President Bart Rodgers Granbury Market President Brad Seay Executive Vice President Regional Board of Directors Trent Swearengin Chairman, President & CEO Keith Brown Prime Building Components, LLC Ronald D. Butler II First Financial Bankshares, Inc. George Gault Attorney Walter Hardin III Real Estate Investments Bank Information :: Page 26 Blayne Baley Senior Vice President Doug Dobbins Senior Vice President Donna Feller Senior Vice President Vickie Pettit Senior Vice President Wendell Hollingsworth Industry and Economic Development Doug Montgomery Texstar Ford Lincoln, Inc., and Texstar Kubota, Inc Terry L. Murphy Murphy and Murphy, Inc Ron Pack Ranching and Investments Trent Tidwell Senior Vice President Matthew Ward Senior Vice President David Ramsey, M.D. Family Practice Center Michael B. Williams M W Supply, Inc. IN THOUSANDS ASSETS LOANS DEPOSITS NET INCOME RETURN ON AVG. ASSETS EFFICIENCY RATIO Dec. 31, 2018 $560,593 $228,936 $473,062 Dec. 31, 2019 $581,527 $270,429 $477,456 $10,571 $12,248 1.86% 2.16% 50.68% 47.49% Senior Officers Justin B. Hooper Chairman, President and CEO Eddie Gregory Senior Vice President Chief Operations Officer Chris Cregger Senior Vice President Regional Board of Directors Justin B. Hooper Chairman, President & CEO Ronald D. Butler II First Financial Bankshares, Inc. James D. Eggleston Eggleston King, LLP Adam Feriend Joe R Jones Construction, Inc Lori Hill Senior Vice President Jimmie Sue Lawson Senior Vice President Sean Woodring Senior Vice President Nan Kingsley President Bluestem Studios, Inc. Kevin R. Lackey Freedom Power Sports Stephen E. Milliken C.D. Hartnett Company Mike White, O.D. Therapeutic Optometrist MAIN OFFICE 101 College Park Dr. | Weatherford, TX 76086 | 817.596.0307 Weatherford “We are so thankful for our customers who helped make 2019 an outstanding year. Parker County is a growing area and we have a talented team of dedicated banking professionals who stand ready to assist our customers as they grow their businesses, buy a home or car, or just need a friendly teller to assist them with their deposits. We look forward to serving you in 2020 and making it the best year yet.” Justin B. Hooper Chairman, President and CEO Kyle Wilks Wilks Development, LLC Bank Information :: Page 27 WELCOME TO THE FAM LY Bryan/College Station The Bank & Trust of Bryan/College Station resulted from a 2009 merger of the $80 million Texas Enterprise Bank, chartered in 2006, and the Bryan/College Station branches of The Bank and Trust of Del Rio, Texas which began business in 2009. The merger created the community’s largest locally owned community bank. The Region’s management team consists of former owners, management and key personnel of the former First National Bank of Bryan. As of December 31, 2019, The Bank & Trust of Bryan/ College Station had total assets of $631.1 million, total loans of $455.4 million and total deposits of $551.9 million. “We are excited to welcome the TB&T team into the First Financial family,” said F. Scott Dueser, Chairman, President and CEO of First Financial. “This well-managed, high performing bank in the high growth Bryan/College Station market will be an excellent addition to our company. We are most impressed with the employees, officers, management and board of this quality bank, who share our same values, philosophies and commitment to outstanding customer service.” “With its larger size and successful track record, First Financial offers our customers new and expanded services and creates more opportunity for our employees,” said Timothy N. Bryan, Chairman of The Bank & Trust of Bryan/College Station. “Our customers will continue to see the same friendly, local employees and the same strong commitment to the local community. At the same time, we will be able to offer a broader range of banking products and services including expanded depository products, state-of-the-art mobile banking and treasury management services, a larger lending capacity and trust and wealth management services.” MAIN OFFICE 1716 Briarcrest Dr. Ste 400 | Bryan, TX 77802 | 979.260.2100 Timothy N. Bryan Chairman Ivan M. Olson President and Chief Executive Officer Bank Information :: Page 28 BRYAN/COLLEGE STATION REGION (CONTINUED) Senior Officers Timothy N. Bryan Chairman Ivan M. Olson President and Chief Executive Officer Michael A. Holmgreen Executive Vice President Jerry E. Fox Executive Vice President J. Cal McNeill Executive Vice President Joe G. Salvato Executive Vice President Nora P. Thompson Executive Vice President Austin W. Bryan Senior Vice President Anna Jones Senior Vice President Melanie N. Motley Senior Vice President Janet B. Prater Senior Vice President Regional Board of Directors Timothy N. Bryan Chairman Ivan M. Olson President and CEO Bryan/College Station Brian Barrett President Feather Crest Farms R. Sid Cauthorn President Westex Bancorp Ronnie L. Craig Shareholder Thompson, Derrig & Craig CPAs TDC Capital Advisors F. Scott Dueser First Financial Bankshares, Inc. Lynn Elliott President Lometa Petroleum Corporation General Partner Elliot Interests Charles A. Ellison Attorney at Law President and Founder The Ellison Firm J. Bruce Hildebrand, CPA First Financial Bankshares, Inc. Lawrence B. Hodges Jr. President and CEO H&B Copies Inc., Copy Corner Hank McQuaide Chairman Berkshire Hathaway Caliber Realty William L. Rayburn, MD Chief Medical Officer Baylor Scott & White Health College Station Region Associate Professor Texas A&M College of Medicine Bank Information :: Page 29 Left to Right: Kami Graves, Ryan Craig, Janet O’Dell, Troy Fore, Bobby Brennan, Tammie Harding, Wes Masters, Melanie Motley, Cindi LaChance Front: Isabel Montoya, Brad Walker, Cynthia Watson, John Ruzicka Back: Larry Williams, Michael Greenhaw, Sammy Scott, David Weems, Laurinda Thomas, Tony Vargas 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 Melanie Motley Senior Vice President First Financial Mortgage delivered exceptional results in 2019. We exceeded $550 million in total originations, which represents a 20% increase from 2018. Our mortgage team assisted, with great care, 2144 individuals and families with their home financing needs - and we are most proud of that accomplishment. The Texas housing market continues to be a bright spot in the economy and long-term interest rates remain at historic lows. First Financial Mortgage offers a full menu of products to meet all the real estate financing needs of our customers including interim construction, home equity, bridge, in-house and secondary market loans. Looking forward, we are very excited with the addition of the Bryan- College Station market in early 2020. First Financial Mortgage is well-positioned in some of the fastest growing housing markets in the state. Senior Officers John Ruzicka Chairman, President and CEO Isabel Montoya Senior Vice President Deposit Operations Cynthia Watson Senior Vice President Chief Information Security Officer David Weems Senior Vice President Chief Operations Officer Directors John Ruzicka 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. Larry Williams Senior Vice President Technical Architecture Michael Greenhaw Vice President Senior System Analyst Sammy Scott Vice President End User Support Manager Tony Vargas Vice President Project Management 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 Brad Walker Vice President Help Desk and Network Support Laurinda Thomas Assistant Vice President Debit Card and Loss Prevention Manager 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 First Financial Mortgage :: Page 30 First Technology Services :: Page 31 Abilene | Beaumont | Fort Worth | Odessa | San Angelo | San Antonio | Stephenville | Sweetwater Front: David Castleberry, Kirk Thaxton, Barbara Hill, Konrad Halbert Back: Brad Brown, Zach Reyes, Brent Miller, Wayne Chowning, Lon Biebighauser, Michael Sierra First Financial Trust & Asset Management Company Left to Right: Frank Gioia, Gary Milliorn, Michael Wolverton, Monica Houston, Will Christoferson, Andrea Smiddy-Schlagel, Brandon Harris Line Of Business Executives First Financial Trust & Asset Management Company delivered excellent results in 2019. Total assets under management at year- end had a book value of $4.86 billion, a 13.1 percent increase from $4.29 billion at the end of 2018. The market value of the assets totaled $6.75 billion, a gain of 20.5 percent from $5.60 billion. For the year, total fee income increased 0.8 percent to $28.4 million from $28.2 million in 2018, and net earnings after tax increased 2.7 percent to $13.9 million from $13.5 million. Earnings were impacted in 2019 by lower oil and gas fees, a decrease from 2018 totaling $1.1 million. The trust company’s investment performance remained strong. The equity income portfolio led the way with a return of 33.00%, while the taxable and tax-free fixed-income portfolios generated returns of 6.4% and 6.8%, respectively. We were pleased to have Brent Miller get our Houston trust office up and running in 2019. We saw excellent growth, with trust assets ending the year at $56.1 million. We are excited about our pipeline for new business in 2020. In November, we were pleased to announce the opening of our ninth trust office, located in San Antonio. Mike Sierra will lead this office, and we look forward to its growth and success. Trust Assets (in millions) 2015 2016 2017 2018 2019 $3,060 $3,374 $3,866 $4,294 $4,856 Trust Fees (in millions) 2015 2016 $0 2017 2018 2019 $19.25 $19.64 $23.69 $28.18 $28.40 Trust Net Income (in millions) 2015 2016 2017 2018 2019 $7.449 $7.190 $8.579 $13.532 $13.892 Trust & Asset Management :: Page 32 Senior Officers Kirk W. Thaxton Chairman, President and CEO Lon Biebighauser Executive Vice President Manager, Abilene 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 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. Advisory Director John L. Beckham Attorney, Beckham Rector and Eargle LLP Christopher N. Montoya Executive Vice President Manager, Equities Bill Rowe Executive Vice President Manager, Fixed Income Bradley D. Brown Senior Vice President Manager, Beaumont/Orange Josh Brown Senior Vice President Manager, Oil & Gas Brent S. Miller Senior Vice President Manager, Houston David B. Pitzer Senior Vice President Manager, Real Property Zach Reyes Senior Vice President Manager, San Angelo Michael Sierra Senior Vice President Manager, San Antonio Jay Lawrence President MAL Enterprises, Inc. David F. Lupton President Angelo Glass & Mirror Company. Inc. Mark K. Rich Director of Investments Kimbell Art Foundation Walter G. Riedel, III Chairman of the Board Nelda C. and H.J. Lutcher Stark Foundation Our line of business executives bring diverse knowledge and expertise in their fields to our company to ensure we have the best in staffing, products and services for our customers. Their job is to lead and upgrade our lines of business while assisting our regional presidents to maximize the utilization of those products and services. Our line of business executives are key to the continued growth and success of the Company and to our commitment to put YOU FIRST. Senior Officers Monica Houston Executive Vice President Retail Banking and Training Andrea Smiddy-Schlagel Executive Vice President Treasury Management Michael Wolverton Executive Vice President Consumer Lending Will Christoferson Senior Vice President Advertising and Marketing Frank Gioia Senior Vice President Customer Care Center Brandon Harris Senior Vice President Appraisal Services Gary Milliorn Vice President Property Manager Line of Business Executives :: Page 33 Front: Kirk W. Thaxton, F. Scott Dueser, Gary S. Gragg, Monica Houston Middle: J. Bruce Hildebrand, Marna Yerigan, Lawrence B. Kentz, John Ruzicka Back: Kyle McVey, Ronald D. Butler, Luke Longhofer, Randy Roewe Front: Vianei Lopez Braun, F. Scott Dueser, Johnny E. Trotter Middle: Mike Denny, David Copeland, April Anthony, Robert C. Nickles, Tim Lancaster Back: Tucker S. Bridwell, Kade Matthews, Ron Giddiens, Ross H. Smith, Jr., Murray Edwards 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 Chief Lending Officer Luke Longhofer Executive Vice President Chief Credit Officer Randy Roewe Executive Vice President Chief Risk Officer John Ruzicka Executive Vice President Chief Information Officer Kirk W. Thaxton Chairman, President and CEO First Financial Trust Monica Houston Executive Vice President Retail Banking and Training Marna Yerigan Executive Vice President Lending Lawrence B. Kentz Senior Vice President Chief Compliance Officer Kyle McVey, CPA Senior Vice President Chief Accounting Officer Corporate Information ANNUAL MEETING Tuesday, April 28, 2020 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 SEND CERTIFICATES FOR TRANSFER AND ADDRESS CHANGES TO: Continental Stock Transfer & Trust Company 1 State Street 30th floor New York, NY 10004 ADDRESS SHAREHOLDER INQUIRIES TO: Continental Stock Transfer & Trust Company 1 State Street 30th floor New York, NY 10004 TRANSFER AGENT Continental Stock Transfer & Trust Company 212.509.4000 www.contientalstock.com CORPORATE OFFICE 400 Pine St. Abilene, TX 79601 325.627.7155 800.588.7000 CORPORATE MAILING ADDRESS P.O. Box 701 Abilene, TX 79604 INDEPENDENT PUBLIC AUDITORS Ernst & Young LLP NASDAQ: FFIN www.ffin.com COMMITTEE CHAIRMEN: BOARD MEMBER YEAR COMMITTEE 1. Executive Committee: F. Scott Dueser, Chairman 2. Audit Committee: David Copeland, Chairman 3. Compensation Committee: Tim Lancaster, Chairman 4. Nominating/Corporate Governance Committee: Tucker S. Bridwell, Chairman 5. Bank Directors’ Loan Committee: Murray Edwards, Chairman 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 “believes,” “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, 2019, deposit information compiled by the Federal Deposit Insurance Corporation. F. Scott Dueser Chairman of the Board, President and CEO First Financial Bankshares, Inc. April Anthony CEO Encompass Home Health Homecare Homebase Vianei Lopez Braun Chief Development Officer Decker Jones, P.C. Tucker S. Bridwell* President Mansefeldt Investment Corp. David Copeland, CPA President, SIPCO, Inc. and Shelton Family Foundation Mike Denny President, Batjer and Associates Murray Edwards Principal, The Edwards Group Ron Giddiens Investments Partner, D&G Consulting Tim Lancaster Former President and CEO Hendrick Health System Kade Matthews Ranching and Investments Robert C. Nickles, Jr. Executive Chairman Alegacy Group, LLC Ross H. Smith, Jr. President, Akrotex, Inc. Owner, Sabine River Ford, Inc. Johnny E. Trotter President and CEO Livestock Investors, Ltd. * Lead Director 1991 2015 2020 1 2 3 2007 1, 4 1998 1, 2, 4 2019 2, 3, 5 2006 1, 2, 4, 5 2009 2, 5 2013 1, 2, 3, 4, 5 1998 2019 3 3 2014 3, 5 2003 1, 3, 4 Corporate Information :: Page 34 Board of Directors :: Page 35 400 Pine St., Abilene, TX 79601 | 325.627.7200 | ffin.com 

Continue reading text version or see original annual report in PDF format above