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1st Quarter 2011
Forward Looking Statement  The numbers, as of and for the three months ended March 31, 2011, contained within this present...
Who We Are   $3.8 billion financial holding company    headquartered in Abilene, Texas   Group of 11 separately chartere...
33
Recognitions KBW Honor Roll – One of Forty banks named – March 2011 SNL Financial top publicly traded community bank and...
What Makes Us Different One Bank, Eleven Charters Concept  One Bank    Consolidation of backroom operations (lower effic...
Huntsville Acquisition  Acquired November 2010  Huntsville, Texas      37,000 Residents      Sam Houston State Univers...
FFIN’s Unique Positioning in TexasBank                                             Key MarketsBBVA Compass                ...
88
Texas: Large and Growing  Five most populous states:*            Growth                                          (2000 – 2...
Target Markets – Population GrowthPopulation growth (2000-2009) in FFIN expansion markets:*Texas                          ...
Preferred Acquisition: Granbury and Glen Rose                          11                           11
Core Markets: West Central Texas        Markets served benefiting from well-established,         long- time customers    ...
Expansion Markets                                                                                DEPOSIT MARKET     MARKET...
Recent De Novo Growth  Cisco: Branch of Eastland – Expected to Open July 2011  Lamesa: Office of Trust Company – April 2...
Senior Management at First Financial                                                   Years with Company   Years in Indus...
Experienced Bank CEOs & Presidents                                                   Years with Company   Years in Industr...
Asset Performance   Growth in Total Assets                             (in millions)                                      ...
Deposit Growth   Growth in FFIN Total Deposits                             (in millions)                                  ...
Deposit Products              Savings       Time               6.6%         25.6%                                    Deman...
Loan Performance               Growth in FFIN Total Loans                              (in millions)                      ...
Overview of Loan Portfolio                               Commercial                                 24.2%                 ...
Breakdown of R/E Loan Portfolio                     Residential                   Development &                    Constru...
Loan to Deposit Ratio           2005   2006   2007        2008   2009      2010                 2011 End of Period    54.5...
Variable and Fixed Rate LoansLoan Portfolio Interest Rate Risk Analysis Variable                                          ...
Sound Lending PracticesNonperforming assets as a percentage of loans + foreclosed assets     (FFIN vs. Peers)             ...
Allowance for Loan Losses and Provision for Loan Losses                                                                   ...
Summary of Bond Portfolio            Treasuries                                        Corporates              0.95%      ...
Municipal Allocation by State                  State              Percentage                  Texas                55.42% ...
Growth in Trust Assets    Total Trust Assets – Book Value                    (in millions)                                ...
Total Trust Fees    Growth in FFTAM Fees (Full year and 1st 3 months)             (in thousands)                          ...
24th Consecutive Year of Increased Earnings    FFIN Earnings (Full year and 1st 3 months)                      (in million...
Strong Shareholder Earnings    Basic Earnings Per Share         (Full year and 1st 3 months)                              ...
FFIN Outperforms Peers    Percentage Return on Average Assets   1.82%                           1.80%             1.72%   ...
Strong Return on Capital    Percentage Return on Average Equity                                    16.15%   16.20%    15.8...
Capital & Capital Ratios                                                             (dollars in thousands)               ...
Net Interest MarginQuarterly Interest Margin 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3.50% 3.25% 3.00%           4th     1st  ...
Working Harder and SmarterEfficiency Ratio                                            (FFIN vs. Peers)             2005   ...
Total Return on Investment   Assume you owned 1,000 shares of FFIN stock on January 1, 2010…     Stock cost in January 201...
Strong Stock Performance40.00%30.00%20.00%10.00% 0.00%-10.00%-20.00%-30.00%-40.00%-50.00%-60.00%   Jan . ‘07   June ‘07   ...
Challenges    Proposed Legislation from Washington    Keep nonperforming assets to a minimum    Maintain net interest m...
Opportunities   Loan Growth   Mortgage Lending   Trust Services   Treasury Management   Potential Acquisitions       ...
www.ffin.com
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First financial 1st qtr 2011 final

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First-quarter 2011 investor presentation from First Financial Bankshares, Inc. (NASDAQ: FFIN).

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Transcript of "First financial 1st qtr 2011 final"

  1. 1. 1st Quarter 2011
  2. 2. Forward Looking Statement The numbers, as of and for the three months ended March 31, 2011, contained within this presentation are unaudited as well as amounts related to the Company’s stock trading volume. Certain statements contained herein 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 and savings 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/Filings” on the Company’s web site or by writing or calling the Company at 325.627.7155. The Company does not undertake any obligation to update publicly or revise any forward-looking statements herein because of new information, future events or otherwise.
  3. 3. Who We Are $3.8 billion financial holding company headquartered in Abilene, Texas Group of 11 separately chartered banks 121 year history Growth markets include 50 mile radius of the larger cities of Texas 2
  4. 4. 33
  5. 5. Recognitions KBW Honor Roll – One of Forty banks named – March 2011 SNL Financial top publicly traded community bank and sixth overall – March 2011 Ranked #2 in Texas and #7 in the United States by J.D. Power and Associates 2011 Retail Banking Customer Satisfaction Study – April 2011 4
  6. 6. What Makes Us Different One Bank, Eleven Charters Concept  One Bank  Consolidation of backroom operations (lower efficiency ratio)  Agency agreements (customers may use any of our 52 locations)  Eleven Community Bank Charters  Bank Presidents run their banks  Local Boards – Movers and Shakers of the Community  Keep our banks locally focused  Make sure we meet the needs of the community  Help us make better loan decisions  Help us market the bank  Up to $2.75 million of FDIC insurance available 5
  7. 7. Huntsville Acquisition  Acquired November 2010  Huntsville, Texas  37,000 Residents  Sam Houston State University – 17,000 Students  Fastest Growing University in Texas  Headquarters of the Texas Department of Criminal Justice – 5,000 employees  Strategically located on Interstate 45 – 70 miles north of Houston  $176 million in Assets*  $153 million in deposits  $91 million in loans  Approximately 1.63x book; 10.8x last twelve months earnings (tax effected)  Huntsville acquisition is very similar to our model around Dallas/Fort Worth and provides diversification  #2 Market Share in Walker County – 21% *As of March 31, 2011 6
  8. 8. FFIN’s Unique Positioning in TexasBank Key MarketsBBVA Compass Rio Grande, Gulf Coast, Houston, Dallas, El Paso, LubbockComerica, Inc. DFW, Austin, Houston, California, Michigan, Florida, MexicoEncore Bancshares Houston, FloridaFrost San Antonio, Austin, Corpus Christi, DFW, Rio GrandeInternational Bancshares Corp. Rio Grande, Houston, San Antonio, OklahomaProsperity Houston, DFW, AustinSouthside East TexasSterling (announced acquisition by Comerica) Houston, San Antonio, DallasTexas Capital DFW, Austin, San Antonio and HoustonViewPoint Financial DallasZion DFW and Houston 7
  9. 9. 88
  10. 10. Texas: Large and Growing Five most populous states:* Growth (2000 – 2009) California 37.0 million 9.1% Texas 24.8 million 18.8% New York 19.5 million 3.0% Florida 18.5 million 16.0% Illinois 12.9 million 4.0% * U.S. Census Bureau 9
  11. 11. Target Markets – Population GrowthPopulation growth (2000-2009) in FFIN expansion markets:*Texas 18.8%Bridgeport & Wise County 21.8%Fort Worth / Tarrant County 23.8%Cleburne, Midlothian & Johnson County 23.8%Weatherford, Willow Park, Aledo 29.9%Granbury & Hood County 25.2%Stephenville & Erath County 9.6% * U.S. Census Bureau 10
  12. 12. Preferred Acquisition: Granbury and Glen Rose 11 11
  13. 13. Core Markets: West Central Texas  Markets served benefiting from well-established, long- time customers ASSET DEPOSIT MARKETBANK LOCATIONS SIZE* MARKET SHARE** SHARE RANK**First Financial Bank $1,228 M 14 43% 1(Abilene, Clyde, Moran, Albany, Odessa)First Financial Bank $168 M 1 45% 1(Hereford)First Financial Bank $189 M 3 51% 1(Eastland, Ranger, Rising Star)First Financial Bank $160 M 4 36% 1(Sweetwater, Roby, Trent, Merkel)First Financial Bank $390 M 2 19% 2(San Angelo) * Data as of 03-31-11TOTALS $2,135M 24 ** Data as of 06-30-10 12
  14. 14. Expansion Markets DEPOSIT MARKET MARKET SHAREBANK ASSET SIZE* LOCATIONS SHARE** RANK**First Financial Bank $284 M 6 18% 2(Cleburne, Burleson, Alvarado, Midlothian, Crowley)First Financial Bank $303 M 3 7% 5 (Southlake, Trophy Club, Keller, 3 14% 3 Bridgeport, Decatur, Boyd)First Financial Bank $337 M 7 22% 2 (Stephenville, Granbury, Glen Rose, Acton)First Financial Bank $398 M 7 26% 1(Weatherford, Aledo, Willow Park, Brock, Ft. Worth)First Financial Bank $200 M 1 33% 1(Mineral Wells)First State Bank $176 M 1 21% 2(Huntsville) * Data as of 03-31-11TOTALS $1,698 M 28 ** Data as of 06-30-10 13
  15. 15. Recent De Novo Growth  Cisco: Branch of Eastland – Expected to Open July 2011  Lamesa: Office of Trust Company – April 2011  Crowley: Branch of Cleburne – October 2010  Odessa: Branch of Abilene – February 2010  Fort Worth: Branch of Weatherford – February 2010  Odessa: Office of Trust Company – April 2009  Merkel: Branch of Sweetwater – July 2008  Brock: Branch of Weatherford – March 2008  Acton: Branch of Stephenville – March 2008  Albany: Branch of Abilene – May 2007  Fort Worth: Office of Trust Company – April 2007 14
  16. 16. Senior Management at First Financial Years with Company Years in Industry Scott Dueser Chairman of the Board, President & 35 40 Chief Executive Officer J. Bruce Hildebrand, CPA Executive Vice President 9 33 Chief Financial Officer Gary L. Webb Executive Vice President 9 23 Operations Gary S. Gragg Executive Vice President 20 32 Credit Administration Marna Yerigan Executive Vice President 1 25 Credit Administration Michele Stevens Senior Vice President 15 31 Advertising and Marketing Courtney Jordan Senior Vice President 3 18 Training & Education Kirk Thaxton, CTFA President, First Financial Trust & Asset 24 27 Management 15
  17. 17. Experienced Bank CEOs & Presidents Years with Company Years in Industry Ron Butler, FFB Abilene 18 29 Mike Mauldin, FFB Hereford 8 33 J.V. Martin, FFB Sweetwater 22 41 Kirby Andrews, FFB Sweetwater 20 23 Tom O’Neil, FFB Eastland 12 31 Mike Boyd, FFB San Angelo 35 38 Matt Reynolds, FFB Cleburne 6 29 Ron Mullins, FFB Stephenville 5 32 Doyle Lee, FFB Weatherford 15 39 Jay Gibbs, FFB Weatherford 9 37 Mark Jones, FFB Southlake 10 33 Ken Williamson, FFB Mineral Wells 9 39 Robert Pate, FFB Huntsville 14 30 Gaye Clements, FFB Huntsville 9 27 Gary Tucker, First Technology Services 20 36 16
  18. 18. Asset Performance Growth in Total Assets (in millions) $3,776 $3,828 $3,212 $3,279 $3,070 $2,850 2006 2007 2008 2009 2010 2011 *As of March 31, 2011 17
  19. 19. Deposit Growth Growth in FFIN Total Deposits (in millions) $3,113 $3,132 $2,583 $2,685 $2,546 $2,384 $2,154 $2,163 $1,786 $1,849 $1,807 $1,699 $797 $836 $959 $969 $685 $739 2006 2007 2008 2009 2010 2011 Non Interest Bearing Interest Bearing *As of March 31, 2011 18
  20. 20. Deposit Products Savings Time 6.6% 25.6% Demand 30.9% Money Market 36.9% *As of March 31, 2011 19
  21. 21. Loan Performance Growth in FFIN Total Loans (in millions) $1,690 $1,682Real Estate $1,528 $1,566 $1,514 $1,373 $1,289Commercial $990 $1,012 $836 $855 $860Student $760 $677Consumer $394 $391 $429 $330 $344 $406 $407Agricultural $37 $31 $32 $52 $0 $160 $165 $182 $191 $175 $191 $199 $85 $73 $84 $77 $73 $81 $64 2005 2006 2007 2008 2009 2010 2011 *As of March 31, 2011 20
  22. 22. Overview of Loan Portfolio Commercial 24.2% Agriculture 3.8% Consumer 11.8% Real Estate 60.2% *As of March 31, 2011 21
  23. 23. Breakdown of R/E Loan Portfolio Residential Development & Construction 6.4% 1-4 Family 35.8% Other R/E 22.8% Commercial Development and Construction 3.7% Commercial R/E 31.3% *As of March 31, 2011 22
  24. 24. Loan to Deposit Ratio 2005 2006 2007 2008 2009 2010 2011 End of Period 54.5 57.6 60.0 60.6 56.4 54.3 53.7Average 57.6 56.6 59.8 61.1 59.5 56.0 54.2Balances *As of March 31, 2011 23
  25. 25. Variable and Fixed Rate LoansLoan Portfolio Interest Rate Risk Analysis Variable Fixed Rate Rate Less than 1 to 3 3 to 5 5 to 10 10 to 15 Over 15 1 year years years years years years 36.7% 12.2 15.7% 18.9% 7.3% 6.9% 2.3% *As of March 31, 2011 24
  26. 26. Sound Lending PracticesNonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers) 2006 2007 2008 2009 2010 2011* FirstFinancial 0.30% 0.31% 0.80% 1.46% 1.53% 1.44%Peer Group 0.60% 0.98% 2.62% 5.38% 5.58% Not available *As of March 31, 2011 25
  27. 27. Allowance for Loan Losses and Provision for Loan Losses (in thousands) $32,501 $31,106 $27,612 $21,529 $17,462 $16,201 $14,719 $11,419 $7,957 $8,962 $1,320 $2,061 $2,331 $2,127 2005 2006 2007 2008 2009 2010 2011 ALLL Provision *As of March 31, 2011 26
  28. 28. Summary of Bond Portfolio Treasuries Corporates 0.95% Agencies 2.66% 18.13% CMOs 27.93% Muni 34.79% MBSs 15.54% *As of March 31, 2011 27
  29. 29. Municipal Allocation by State State Percentage Texas 55.42% Michigan 6.41% Wisconsin 5.64% Washington 2.64% Illinois 2.63% Massachusetts 2.50% New Jersey 2.36% Kentucky 2.08% Louisiana 1.82% California 1.78% Utah 1.60% Minnesota 1.60% *As of March 31, 2011 Other 38 states 13.52% 28
  30. 30. Growth in Trust Assets Total Trust Assets – Book Value (in millions) $1,830 $1,784 $1,631 $1,664 $1,428 $1,300 2006 2007 2008 2009 2010 2011 29
  31. 31. Total Trust Fees Growth in FFTAM Fees (Full year and 1st 3 months) (in thousands) $10,808 $9,441 $9,083 $8,746 $7,665 thru March 31st $3,044 $2,369 $2,526 $1,847 $2,010 $2,117 2006 2007 2008 2009 2010 2011 30
  32. 32. 24th Consecutive Year of Increased Earnings FFIN Earnings (Full year and 1st 3 months) (in millions) $59.7 $1.3 $53.1 $53.8 $49.5 $46.0 $16.3 $13.2 $13.7 $13.7 $11.5 $11.5 2006 2007 2008 2009 2010 2011 31
  33. 33. Strong Shareholder Earnings Basic Earnings Per Share (Full year and 1st 3 months) $1.91 $0.04 $1.71 $1.72 $1.59 $1.48 $0.52 $0.42 $0.44 $0.44 $0.37 $0.37 2006 2007 2008 2009 2010 2011 32
  34. 34. FFIN Outperforms Peers Percentage Return on Average Assets 1.82% 1.80% 1.72% 1.74% 1.75% 1.68% 1.72% 1.12% 1.15% 1.10% 0.87% First Financial Peer Group 0.29%* -0.03% -0.18% 2004 2005 2006 2007 2008 2009 2010 *(thru Dec. 31st) 33
  35. 35. Strong Return on Capital Percentage Return on Average Equity 16.15% 16.20% 15.87% 15.09% 15.27% 13.63% 13.74% 13.11% 13.33% 12.61% 9.45% First Financial Peer Group 1.59%* -1.83% -2.51% 2004 2005 2006 2007 2008 2009 2010 *(thru Dec. 31st) 34
  36. 36. Capital & Capital Ratios (dollars in thousands) 2007 2008 2009 2010 2011* Shareholders’ Equity 335,495 368,782 415,702 441,688 456,215As a Percent of Total 10.93 11.48 12.68 11.70 11.92 Assets Tangible 270,288 304,779 352,550 369,164 383,803 Capital Tier 1 9.23 9.68 10.69 10.28 10.03 Leverage Ratio Tier 1 Risk 14.65 15.89 17.73 17.01 17.60 Based Capital Ratio Risk Based 15.62 17.04 19.10 18.26 18.86 Capital Ratio *As of March 31, 2011 35
  37. 37. Net Interest MarginQuarterly Interest Margin 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3.50% 3.25% 3.00% 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st Qtr. 07Qtr. 08Qtr. 08Qtr. 08Qtr. 08Qtr. 09Qtr. 09Qtr. 09Qtr. 09Qtr. 10Qtr. 10Qtr. 10Qtr. 10Qtr. 11 First Financial Peer Group 36
  38. 38. Working Harder and SmarterEfficiency Ratio (FFIN vs. Peers) 2005 2006 2007 2008 2009 2010 2011 FirstFinancial 52.48% 53.57% 52.83% 50.76% 50.11% 49.49% 49.07%Peer Group 60.12% 61.29% 63.12% 68.12% 69.53% 66.79% not available 37
  39. 39. Total Return on Investment Assume you owned 1,000 shares of FFIN stock on January 1, 2010… Stock cost in January 2010 $54,230 Dividend received ($1.36 x 1,000 shares) $ 1,360 Decrease in stock price during 2010 ($2,980) $2210,720 ($54.23 to $51.25 X 1,000 shares) 2010 return on investment -2.99% 2009 return on investment 0.69% 2008 return on investment 50.20% 2007 return on investment -7.05% 2006 return on investment 22.76% 5 year average return 10.50% 38
  40. 40. Strong Stock Performance40.00%30.00%20.00%10.00% 0.00%-10.00%-20.00%-30.00%-40.00%-50.00%-60.00% Jan . ‘07 June ‘07 Dec ‘07 June ‘08 Dec ‘08 June ‘09 Dec . ‘09 June ‘10 Mar. ’11 FFIN S&P 500 NASDAQ Dow Jones 39
  41. 41. Challenges  Proposed Legislation from Washington  Keep nonperforming assets to a minimum  Maintain net interest margin  Lower efficiency ratio 40
  42. 42. Opportunities  Loan Growth  Mortgage Lending  Trust Services  Treasury Management  Potential Acquisitions 41
  43. 43. www.ffin.com
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