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First financial bankshares presentation 2nd qtr 2013
 

First financial bankshares presentation 2nd qtr 2013

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  • Main focus should be on years in the industry – You have world-class talent.
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First financial bankshares presentation 2nd qtr 2013 First financial bankshares presentation 2nd qtr 2013 Presentation Transcript

  • 2nd Quarter 2013
  • Forward Looking Statement The numbers, as of and for six months ended June 30, 2013, contained within this presentation are unaudited. 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.
  • 2 Who We Are $5.0 billion financial holding company headquartered in Abilene, Texas Group of 12 separate regions 122-year history Growth markets include 50 mile radius of the larger cities of Texas
  • 3
  • Recognitions  KBW Honor Roll – One of forty-seven banks named – April 2013  SNL Financial #11 Best Performing Community Bank ($500M - $5B) – March 2013  Nifty 50: Bank Director Magazine - #5 – Based on Return on Equity / Average Tangible Equity – January 2013  American Banker - #14 – Based on three year average Return on Equity – August 2013  ABA Banking Journal - #13 – Top Performing mid-sized banks ($1B - $10B) – May 2012 4
  • 5 What Makes Us Different One Bank, Twelve Regions Concept  One Bank  Consolidation of backroom operations, technology, and compliance (lower efficiency ratio)  Twelve Regions  Regional Presidents run their regions  Local Boards – Movers and Shakers of the Community  Keep our regions locally focused  Make sure we meet the needs of the community  Help us make better loan decisions  Help us market the region
  • 6 FFIN’s Unique Positioning in Texas Bank Key Markets BBVA Compass Rio Grande, Gulf Coast, Houston, Dallas, El Paso, Lubbock Comerica, Inc. DFW, Austin, Houston, California, Michigan, Florida, Mexico Frost San Antonio, Austin, Corpus Christi, DFW, Rio Grande Independent North and Central Texas International Bancshares Corp. Rio Grande, Houston, San Antonio, Oklahoma Prosperity Houston, DFW, Austin, West Texas, Victoria, and Oklahoma Southside East Texas Texas Capital DFW, Austin, San Antonio and Houston ViewPoint Financial Dallas Zions DFW and Houston
  • 7 Orange Acquisition  Definitive Agreement Signed - February 2013  Orange, Jefferson and Newton Counties  Approximately 350,000 Residents  Strategically located on Interstate 10 – 100 miles east of Houston  Three Major Shipping Ports for Energy and Petrochemical industries  Large refineries, natural gas terminals and recent investment from large Fortune 500 Companies, such as Exxon Mobil, DuPont and Goodyear  $476.6 million in Assets*  $405.0 million in deposits  $308.6 million in loans  Approximately 1.3x book; 13x last twelve months earnings (tax effected)  Orange acquisition is consistent with our acquisition model of high growth areas and along the Interstates  Provides Diversification  #1 Market Share in Orange County – 40%, more than twice the nearest competitor *As of June 30, 2013
  • 88
  • 9 Texas: Large and Growing Five most populous states:* Growth (2002 – 2012) California 38.0 million 8.3% Texas 26.1 million 19.7% New York 19.6 million 2.2% Florida 19.3 million 15.9% Illinois 12.9 million 2.2% * U.S. Census Bureau
  • 10 Target Markets – Population Growth Population growth (2002-2012) in FFIN expansion markets:* Texas 19.7% Bridgeport & Wise County 24.6% Fort Worth & Tarrant County 25.8% Cleburne & Johnson County 31.8% Weatherford, Willow Park, Aledo & Parker County 29.6% Granbury & Hood County 31.8% Stephenville & Erath County 22.6% * U.S. Census Bureau
  • 11 Texas Benefits CEO Magazine ranks Texas best state for business – for seventh consecutive year Texas created more jobs (239,146) in 2012 more than any other state Texas created more private sector jobs than any other state during the past decade
  • Core Markets: West Central Texas  Markets served benefiting from well-established, long- time customers REGION ASSET SIZE* LOCATIONS DEPOSIT MARKET SHARE** MARKET SHARE RANK** First Financial Bank (Abilene, Clyde, Moran, Albany, Odessa) $1,688 M 15 43% 1 First Financial Bank (Hereford) $177 M 1 43% 1 First Financial Bank (Eastland, Ranger, Rising Star, Cisco) $203M 4 58% 1 First Financial Bank (Sweetwater, Roby, Trent, Merkel) $175 M 4 34% 1 First Financial Bank (San Angelo) $455M 3 19% 2 TOTALS $2,698M 27 * Data as of 06-30-13 ** Data as of 06-30-12 12
  • Expansion Markets REGION ASSET SIZE* LOCATIONS DEPOSIT MARKET SHARE** MARKET SHARE RANK** First Financial Bank (Cleburne, Burleson, Alvarado, Midlothian, Waxahachie) $326 M 6 22% 1 First Financial Bank (Southlake, Trophy Club, Keller, Grapevine Bridgeport, Decatur, Boyd) $359 M 4 3 7% 16% 5 3 First Financial Bank (Stephenville, Granbury, Glen Rose, Acton) $383 M 6 22% 2 First Financial Bank (Weatherford, Aledo, Willow Park, Brock, Ft. Worth) $410 M 7 24% 1 First Financial Bank (Mineral Wells) $215 M 1 34% 1 First Financial Bank (Huntsville) $187 M 1 20% 2 First Financial Bank (Orange, Mauriceville, Newton, Port Arthur, Vidor) $477M 6 40% 1 TOTALS $2,357 34 * Data as of 06-30-13 ** Data as of 06-30-12 13
  • Recent De Novo Growth  Weatherford – I-20 Branch – June 2013  San Angelo: HEB Branch – March 2013  Waxahachie: Branch of Cleburne – December 2012  Abilene: Antilley Road Branch – September 2012  Grapevine: Branch of Southlake – March 2012  Cisco: Branch of Eastland – September 2011  Lamesa: Office of Trust Company – April 2011  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
  • Years with Company Years in Industry Scott Dueser Chairman of the Board, President & Chief Executive Officer 37 42 J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer 10 34 Gary L. Webb Executive Vice President Operations 10 24 Gary S. Gragg Executive Vice President Credit Administration 22 34 Marna Yerigan Executive Vice President Credit Administration 2 29 Ron Butler Executive Vice President Chief Administrative Officer 19 31 Senior Management at First Financial 15
  • Years with Company Years in Industry Michele Stevens Senior Vice President Advertising and Marketing 16 32 Courtney Jordan Senior Vice President Training 5 18 Bob Goodner Senior Vice President & Compliance Officer Compliance 12 35 Luke Longhofer Senior Vice President & Loan Review Officer Credit Administration 3 10 Brandon Harris Senior Vice President Appraisal Services 1 15 Kirk Thaxton, CTFA President, First Financial Trust & Asset Management 26 30 Senior Management at First Financial 16
  • Experienced Regional CEOs & Presidents Years with Company Years in Industry Marelyn Shedd, Abilene 22 30 Mike Mauldin, Hereford 10 35 Kirby Andrews, Sweetwater 22 25 Trent Swearengin, Eastland 13 15 Mike Boyd, San Angelo 37 41 Tom O’Neil, Cleburne 15 33 Matt Reynolds, Cleburne 8 31 Ron Mullins, Stephenville 7 35 Jay Gibbs, Weatherford 11 39 Mark Jones, Southlake 12 35 Ken Williamson, Mineral Wells 11 42 Robert Pate, Huntsville 16 32 Fred Wren, Huntsville 1 34 Stephen Lee, Orange 6 20 Gary Tucker, First Technology Services 22 38 17
  • 18 $3,212 $3,279 $3,776 $4,121 $4,500 $4,983* 2008 2009 2010 2011 2012 2013 Growth in Total Assets Asset Performance (in millions) *As of June 30, 2013
  • 19 $797 $836 $959 $1,102 $1,312 $1,305 $1,786 $1,849 $2,154 $2,233 $2,321 $2,613 2008 2009 2010 2011 2012 2013 Non Interest Bearing Interest Bearing Deposit Growth Growth in FFIN Total Deposits (in millions) $3,918* $2,583 $2,685 $3,113 $3,335 $3,633 *As of June 30, 2013
  • 20 Deposit Products Time 18.2% Demand 33.3% Money Market 38.1% Savings 10.4% *As of June 30, 2013
  • Account Growth Net Growth in 2011 – 4,036 Accounts Net Growth in 2012 – 1,219 Accounts New Growth in 2013 – 1,994 Accounts December 31, 2010 December 31, 2011 December 31, 2012 June 30, 2013 Total Number of Accounts 200,027 204,063 205,282 207,276 21
  • $84 $77 $73 $81 $66 $68 $61 $182 $191 $175 $191 $218 $273 $318$32 $52 $0 $394 $391 $406 $429 $427 $510 $608 $836 $855 $860 $990 $1,076 $1,238 $1,592 2007 2008 2009 2010 2011 2012 2013 Real Estate Commercial Student Consumer Agricultural Loan Performance Growth in FFIN Total Loans (in millions) $1,566 $1,514 $1,690 $1,787 $1,528 $2,579* 22 *As of June 30, 2013 $2,089
  • 23 Overview of Loan Portfolio Commercial 23.6% Agriculture 2.3% Consumer 12.3% Real Estate 61.8% *As of June 30, 2013
  • Residential Development & Construction 6.3% 1-4 Family 46.5% Commercial Development and Construction 4.0% Commercial R/E 25.8% Other R/E 17.4% 24 Breakdown of R/E Loan Portfolio *As of June 30, 2013
  • 25 2007 2008 2009 2010 2011 2012 2013* End of Period 60.0 60.6 56.4 54.3 53.6 57.5 65.8 Average Balances 59.8 61.1 59.5 56.0 54.6 56.4 61.9 Loan to Deposit Ratio *As of June 30, 2013
  • 26 Less than 1 year 1 to 3 years 3 to 5 years 5 to 10 years 10 to 15 years Over 15 years 32.9% 8.9% 13.2% 19.4% 10.9% 9.8% 4.9% Variable and Fixed Rate Loans Loan Portfolio Interest Rate Risk Analysis Variable Rate Fixed Rate *As of June 30, 2013
  • 2008 2009 2010 2011 2012 2013 First Financial 0.80% 1.46% 1.53% 1.64% 1.22% 1.20%* Peer Group 2.63% 5.41% 5.37% 4.64% 3.69% 3.48%** Sound Lending Practices Nonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers) 27 **As of March 31, 2013 *As of June 30, 2013
  • 28 $17,462 $21,529 $27,612 $31,106 $34,315 $34,839 $34,099* $2,331 $7,957 $11,419 $8,962 $6,626 $3,484 $1,233 2007 2008 2009 2010 2011 2012 2013 ALLL Provision Allowance for Loan Losses and Provision for Loan Losses (in thousands) *As of June 30, 2013
  • Summary of Bond Portfolio Agencies 8.27% Corporates 5.30% Muni 50.29% MBSs 10.62% CMOs 25.52% Treasuries 0.0% 29 *As of June 30, 2013
  • Municipal Allocation by State State Percentage Texas 70.14% Michigan 3.20% Wisconsin 2.37% Washington 2.01% Illinois 1.94% New Jersey 1.52% Florida 1.51% Ohio 1.49% Louisiana 1.35% Massachusetts 1.23% Utah 1.12% Other 39 States 12.12% 30 *As of June 30, 2013
  • 31 $1,631 $1,664 $1,784 $1,912 $2,031 $2,311* 2008 2009 2010 2011 2012 2013 Growth in Trust Assets Total Trust Assets – Book Value (in millions) *As of June 30, 2013
  • 32 $9,441 $9,083 $10,808 $12,617 $14,464 $4,728 $4,242 $5,198 $6,254 $7,124 $7,746 2008 2009 2010 2011 2012 2013 thru June 30th Total Trust Fees Growth in FFTAM Fees (Full year and 1st 6 months) (in thousands)
  • $53.1 $53.8 $59.7 $68.4 $74.2 $26.8 $27.3 $27.9 $32.8 $36.1 $38.1 2008 2009 2010 2011 2012 2013 26th Consecutive Year of Increased Earnings FFIN Earnings (Full year and 1st 6 months) (in millions) 33 thru June 30th
  • 34 $1.71 $1.72 $1.91 $2.17 $2.36 $0.86 $0.87 $0.89 $1.04 $1.15 $1.20 2008 2009 2010 2011 2012 2013 Strong Shareholder Earnings Basic Earnings Per Share (Full year and 1st 6 months) thru June 30th
  • 1.68% 1.72% 1.74% 1.72% 1.75% 1.78% 1.75% 1.10% 0.87% -0.03% -0.18% 0.24% 0.79% 0.98% 2006 2007 2008 2009 2010 2011 2012 FFIN Outperforms Peers Percentage Return on Average Assets PeerGroup FirstFinancial 35
  • 16.20% 15.87% 15.27% 13.63% 13.74% 14.44% 13.85% 12.61% 9.45% -1.83% -2.57% 0.88% 7.27% 8.57% 2006 2007 2008 2009 2010 2011 2012 Strong Return on Capital Percentage Return on Average Equity PeerGroup FirstFinancial 36
  • 37 2009 2010 2011 2012 2013* Shareholders’ Equity 415,702 441,688 508,537 556,963 575,864 As a Percent of Total Assets 12.68 11.70 12.34 12.37 11.56 Tangible Capital 352,550 369,164 436,415 484,990 478,615 Tier 1 Leverage Ratio 10.69 10.28 10.33 10.60 10.32 Tier 1 Risk Based Capital Ratio 17.73 17.01 17.49 17.43 15.20 Risk Based Capital Ratio 19.10 18.26 18.74 18.68 16.31 Capital & Capital Ratios (dollars in thousands) *As of June 30, 2013
  • 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% 4.75% 5.00% 1st Qtr. '10 2nd Qtr. '10 3rd Qtr. '10 4th Qtr. '10 1st Qtr. '11 2nd Qtr. '11 3rd Qtr. '11 4th Qtr. '11 1st Qtr. '12 2nd Qtr. '12 3rd Qtr. '12 4th Qtr. '12 1st Qtr. '13 2nd Qtr. '13 First Financial Peer Group Net Interest Margin Quarterly Interest Margin 38
  • 2007 2008 2009 2010 2011 2012 2013 First Financial 52.83% 50.76% 50.11% 49.49% 48.37% 48.14% 48.98%* Peer Group 63.12% 68.12% 69.53% 67.33% 65.57% 65.77% 66.45%** Working Harder and Smarter Efficiency Ratio (FFIN vs. Peers) 39 **As of March 31, 2013 *As of June 30, 2013
  • Stock cost in January 2012 $33,430 Dividend declared ($0.99 x 1,000 shares) $ 990 Increase in stock price during 2012 ($39.01 from $33.43 X 1,000 shares) $2210,720 2012 return on investment 19.65% 2011 return on investment 0.61% 2010 return on investment -2.99% 2009 return on investment 0.69% 2008 return on investment 50.20% 5 year compound average return 9.55% Total Return on Investment $5,580 Assume you owned 1,000 shares of FFIN stock on January 1, 2012… 40
  • Dividends Per Share $0.79 $0.84 $0.89 $0.91 $0.91 $0.95 $0.99 2006 2007 2008 2009 2010 2011 2012 Annual Dividends Declared Per Share 41
  • Strong Stock Performance -60.00% -40.00% -20.00% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% FFIN S&P 500 NASDAQ Dow Jones Jan . ‘07 June ’13Dec . ‘09Dec ‘07 Dec ‘08 Dec. ‘10 Dec. ’11 Dec. ’12 42
  • Challenges Regulatory reform from Washington Stagnant national economy Inept federal government Low interest rate environment Maintaining net interest margin Keep nonperforming assets to a minimum 43
  • Opportunities  Loan Growth  Mortgage Lending  Trust Services  Treasury Management  Mobile Banking  Lower Efficiency Ratio  Potential Acquisitions 44
  • www.ffin.com