First Financial Bankshares presentation 1st qtr 2012
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First Financial Bankshares presentation 1st qtr 2012 First Financial Bankshares presentation 1st qtr 2012 Presentation Transcript

  • 1st Quarter 2012
  • Forward Looking Statement The numbers, as of and for the year ended March 31, 2012, 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.
  • Who We Are  $4.2 billion financial holding company headquartered in Abilene, Texas  Group of 11 separately chartered banks  122-year history  Growth markets include 50 mile radius of the larger cities of Texas 3 View slide
  • 4 View slide
  • Recognitions KBW Honor Roll – One of Forty banks named – March 2012 SNL Financial #4 Best Performing Community Bank ($500M - $5B) – March 2012 Nifty 50: Bank Director Magazine - #2 – Based on Return on Equity / Average Tangible Equity Ranked #2 in Texas and #7 in the United States by J.D. Power and Associates 2011 Retail Banking Customer Satisfaction Study – April 2011 Bank Intelligence Proven Performers - #4 in the Nation in $1 - $10 billion category – June 2011 5
  • 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 53 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 6
  • 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  $179 million in Assets*  $153 million in deposits  $90 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, 2012 7
  • 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, MexicoFrost San Antonio, Austin, Corpus Christi, DFW, Rio GrandeInternational Bancshares Corp. Rio Grande, Houston, San Antonio, OklahomaProsperity Houston, DFW, AustinSouthside East TexasTexas Capital DFW, Austin, San Antonio and HoustonViewPoint Financial DallasZion DFW and Houston 8
  • 89
  • Texas: Large and Growing Five most populous states:* Growth (2000 – 2010) California 37.3 million 10.0% Texas 25.2 million 20.6% New York 19.4 million 2.1% Florida 18.8 million 17.6% Illinois 12.8 million 3.3% * U.S. Census Bureau 10
  • Target Markets – Population GrowthPopulation growth (2000-2010) in FFIN expansion markets:*Texas 20.6%Bridgeport & Wise County 21.2%Fort Worth / Tarrant County 25.1%Cleburne, Midlothian & Johnson County 19.0%Weatherford, Willow Park, Aledo 32.1%Granbury & Hood County 24.5%Stephenville & Erath County 14.8% * U.S. Census Bureau 11
  • Texas Benefits CEO Magazine ranks Texas best state for business – for seventh consecutive year Texas created more jobs (230,800) in 2010 more than any other state Texas created more private sector jobs than any other state during the past decade 12
  • Preferred Acquisition: Granbury and Glen Rose 13 12
  • 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 $1,443 M 14 41% 1(Abilene, Clyde, Moran, Albany, Odessa)First Financial Bank $166 M 1 42% 1(Hereford)First Financial Bank $206M 4 55% 1(Eastland, Ranger, Rising Star, Cisco)First Financial Bank $184 M 4 37% 1(Sweetwater, Roby, Trent, Merkel)First Financial Bank $431M 2 20% 2(San Angelo) * Data as of 03-31-12TOTALS $2,430M 25 ** Data as of 06-30-11 14
  • Expansion Markets DEPOSIT MARKET MARKET SHAREBANK ASSET SIZE* LOCATIONS SHARE** RANK**First Financial Bank $315 M 6 21% 1(Cleburne, Burleson, Alvarado, Midlothian, Crowley)First Financial Bank $325 M 4 8% 5 (Southlake, Trophy Club, Keller, Grapevine 3 16% 3 Bridgeport, Decatur, Boyd)First Financial Bank $378 M 6 21% 2 (Stephenville, Granbury, Glen Rose, Acton)First Financial Bank $396 M 7 24% 1(Weatherford, Aledo, Willow Park, Brock, Ft. Worth)First Financial Bank $217 M 1 35% 1(Mineral Wells)First Financial Bank $179 M 1 21% 2(Huntsville) * Data as of 03-31-12TOTALS $1,810M 28 ** Data as of 06-30-11 15
  • Recent De Novo Growth San Angelo: HEB Branch – Expected to Open 4th Qtr. 2012 Abilene: Southside Branch – Expected to Open 4th Qtr. 2012 Grapevine: Branch of Southlake – March 2012 Cisco: Branch of Eastland – September 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 16
  • Senior Management at First Financial Years with Company Years in Industry Scott Dueser Chairman of the Board, President & 36 41 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 21 33 Credit Administration Marna Yerigan Executive Vice President 1 28 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 25 29 Management 17
  • Experienced Bank CEOs & Presidents Years with Company Years in Industry Ron Butler, FFB Abilene 19 30 Mike Mauldin, FFB Hereford 9 34 Kirby Andrews, FFB Sweetwater 21 24 Trent Swearengin, FFB Eastland 13 13 Mike Boyd, FFB San Angelo 36 40 Tom O’Neil, FFB Cleburne 13 32 Matt Reynolds, FFB Cleburne 7 30 Ron Mullins, FFB Stephenville 6 33 Doyle Lee, FFB Weatherford 16 39 Jay Gibbs, FFB Weatherford 10 37 Mark Jones, FFB Southlake 11 34 Ken Williamson, FFB Mineral Wells 10 40 Robert Pate, FFB Huntsville 14 31 Gary Tucker, First Technology Services 21 37 18
  • Asset Performance Growth in Total Assets (in millions) *As of March 31, 2012 19
  • Deposit Growth Growth in FFIN Total Deposits (in millions) $3,335 $3,398* $3,113 $2,546 $2,583 $2,685 *As of March 31, 2012 20
  • Deposit Products *As of March 31, 2012 21
  • Account Growth December 31, 2010 December 31, 2011 March 31, 2012Total Number of Accounts 200,027 204,063 206,546  Net Growth in 2011 – 4,036 Accounts  New Growth in 2012 – 2,483 Accounts 22
  • Loan Performance Growth in FFIN Total Loans (in millions) $1,787 $1,799* $1,690 $1,528 $1,566 $1,514 $1,373 *As of March 31, 2012 23
  • Overview of Loan Portfolio *As of March 31, 2012 24
  • Breakdown of R/E Loan Portfolio *As of March 31, 2012 25
  • Loan to Deposit Ratio 2006 2007 2008 2009 2010 2011 2012* End of Period 57.6 60.0 60.6 56.4 54.3 53.6 52.9Average 56.6 59.8 61.1 59.5 56.0 54.6 53.9Balances *As of March 31, 2012 26
  • 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 35.2% 10.4% 14.9% 19.4% 8.4% 8.3% 3.4% *As of March 31, 2012 27
  • Sound Lending PracticesNonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers) 2007 2008 2009 2010 2011 2012* FirstFinancial 0.31% 0.80% 1.46% 1.53% 1.64% 1.60%Peer Group 0.98% 2.63% 5.41% 5.38% 4.66% - *As of March 31, 2012 28
  • Allowance for Loan Losses and Provision for Loan Losses (in thousands) *As of March 31, 2012 29
  • Summary of Bond Portfolio 30
  • Municipal Allocation by State State Percentage Texas 60.07% Michigan 4.65% Wisconsin 4.10% Illinois 2.67% Washington 2.02% Florida 1.95% New Jersey 1.89% Massachusetts 1.75% Utah 1.68% California 1.59% Kentucky 1.54% Louisiana 1.51% Other 38 states 14.58% 31
  • Growth in Trust Assets Total Trust Assets – Book Value (in millions) *As of March 31, 2012 32
  • Total Trust Fees Growth in FFTAM Fees (Full year and 1st 3 months) (in thousands) 33
  • 25th Consecutive Year of Increased Earnings FFIN Earnings (Full year and 1st 3 months) (in millions) thru March 31st 34
  • Strong Shareholder Earnings Basic Earnings Per Share (Full year and 1st 3 months) $0.04 thru March 31st 35
  • FFIN Outperforms Peers Percentage Return on Average Assets First Financial Peer Group 36
  • Strong Return on Capital Percentage Return on Average Equity First Financial Peer Group 37
  • Capital & Capital Ratios (dollars in thousands) 2008 2009 2010 2011 2012 Shareholders’ Equity 368,782 415,702 441,688 508,537 517,005As a Percent of Total 11.48 12.68 11.70 12.34 12.23 Assets Tangible 304,779 352,550 369,164 436,415 444,927 Capital Tier 1 9.68 10.69 10.28 10.33 10.31 Leverage Ratio Tier 1 Risk 15.89 17.73 17.01 17.49 17.73 Based Capital Ratio Risk Based 17.04 19.10 18.26 18.74 18.99 Capital Ratio 38
  • Net Interest MarginQuarterly Interest Margin 39
  • Working Harder and SmarterEfficiency Ratio (FFIN vs. Peers) 2006 2007 2008 2009 2010 2011 2012* FirstFinancial 53.57% 52.83% 50.76% 50.11% 49.49% 48.37% 48.08%Peer Group 61.29% 63.12% 68.12% 69.53% 67.32% 65.86% - *As of March 31, 2012 40
  • Total Return on Investment Assume you owned 1,000 shares of FFIN stock on January 1, 2011… Stock cost in January 2011 $34,170 Dividend received ($0.95 x 1,000 shares) $ 950 Decrease in stock price during 2011 ($740) ($34.17 to $33.43 X 1,000 shares) $2210,720 2011 return on investment 0.61% 2010 return on investment -2.99% 2009 return on investment 0.69% 2008 return on investment 50.20% 2007 return on investment -7.05% 5 year compound average return 6.32% 41
  • Dividends Per Share Annual Dividends Per Share 42
  • Strong Stock Performance 43
  • Challenges  Regulatory reform from Washington  Keep nonperforming assets to a minimum  Maintain net interest margin  Lower efficiency ratio 44
  • Opportunities  Loan Growth  Mortgage Lending  Trust Services  Treasury Management  Potential Acquisitions 45
  • www.ffin.com