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First Financial Bankshares 1st qtr 2014 presentation

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  • Main focus should be on years in the industry – You have world-class talent.
  • Main focus should be on years in the industry – You have world-class talent.
  • Transcript

    • 1. 1st Quarter 2014
    • 2. Forward Looking Statement The numbers, as of and for the quarter ended March 31, 2014, 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.
    • 3. 2 Who We Are $5.3 billion financial holding company headquartered in Abilene, Texas Group of 12 separate regions 124-year history Growth markets include 50 mile radius of the larger cities of Texas
    • 4. 3
    • 5. Recognitions  KBW Honor Roll – One of thirty-one banks named – April 2014  SNL Financial #7 Best Performing Regional Bank – April 2014  Nifty 50: Bank Director Magazine - #12 – Based on Return on Equity / Average Tangible Equity – January 2014  Sandler O’Neil 2013 Bank & Thrift Small-Cap All Stars – September 2013  American Banker - #14 – Based on three year average Return on Equity – August 2013  ABA Banking Journal - #16 – Top Performing mid-sized banks ($1B - $10B) – May 2013 4
    • 6. 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
    • 7. 6 FFIN’s Unique Positioning in Texas Bank Key Markets Comerica, Inc. DFW, Austin, Houston, California, Michigan, Florida, Mexico Frost San Antonio, Austin, Corpus Christi, DFW, Rio Grande, West Texas Independent North and Central Texas International Bancshares Corp. Rio Grande, Houston, San Antonio, Oklahoma Prosperity Houston, DFW, Austin, West Texas, South Central Texas, and Oklahoma Southside East Texas Texas Capital DFW, Austin, San Antonio, and Houston ViewPoint Financial Dallas
    • 8. 7 Orange Acquisition  Effective May 31, 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  $443.8 million in Assets*  $386 million in deposits  $293.3 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 May 31, 2013
    • 9. 88
    • 10. 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
    • 11. 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
    • 12. 11 Texas Benefits  State unemployment rate at 5.5%, state’s lowest rate since November 2008  Only Texas and New York have restored all the jobs lost when recession hit in 2007  CEO Magazine ranks Texas best state for business – for seventh consecutive year  Texas created more jobs (310,000) during the prior twelve months, more than any other state  Texas created more private sector jobs than any other state during the past decade
    • 13. 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) $1,756 M 15 43% 1 First Financial Bank (Hereford) $154 M 1 43% 1 First Financial Bank (Eastland, Ranger, Rising Star, Cisco) $216M 4 58% 1 First Financial Bank (Sweetwater, Roby, Trent, Merkel) $192 M 4 34% 1 First Financial Bank (San Angelo) $492M 3 19% 2 TOTALS $2,810M 27 * Data as of 03-31-14 ** Data as of 06-30-13 12
    • 14. Expansion Markets REGION ASSET SIZE* LOCATIONS DEPOSIT MARKET SHARE** MARKET SHARE RANK** First Financial Bank (Cleburne, Burleson, Alvarado, Midlothian, Waxahachie) $368M 6 20% 1 First Financial Bank (Southlake, Trophy Club, Keller, Grapevine) (Bridgeport, Decatur, Boyd) $380M 4 3 5% 21% 5 1 First Financial Bank (Stephenville, Granbury, Glen Rose, Acton) $400M 6 21% 2 First Financial Bank (Weatherford, Aledo, Willow Park, Brock, Ft. Worth) $431M 7 24% 1 First Financial Bank (Mineral Wells) $256M 1 33% 1 First Financial Bank (Huntsville) $169M 1 19% 2 First Financial Bank (Orange, Mauriceville, Newton, Port Arthur, Vidor) $441M 5 41% 1 TOTALS $2,445M 33 * Data as of 03-31-14 ** Data as of 06-30-13 13
    • 15. Recent De Novo Growth  Beaumont – Under Construction (Opening in 2014)  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
    • 16. Years with Company Years in Industry Scott Dueser Chairman of the Board, President & Chief Executive Officer 38 43 J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer 11 35 Gary L. Webb Executive Vice President Operations 11 25 Gary S. Gragg Executive Vice President Credit Administration 23 35 Marna Yerigan Executive Vice President Credit Administration 3 30 Ron Butler Executive Vice President Chief Administrative Officer 21 32 Senior Management at First Financial 15
    • 17. 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 27 31 Senior Management at First Financial 16
    • 18. Experienced Regional CEOs & Presidents Years with Company Years in Industry Marelyn Shedd, Abilene 23 30 Mike Mauldin, Hereford 11 36 Kirby Andrews, Sweetwater 23 26 Trent Swearengin, Eastland 14 16 Mike Boyd, San Angelo 38 42 Tom O’Neil, Cleburne 15 34 Matt Reynolds, Cleburne 9 31 Ron Mullins, Stephenville 8 35 Jay Gibbs, Weatherford 12 39 Mark Jones, Southlake 13 36 Ken Williamson, Mineral Wells 12 42 Robert Pate, Huntsville 16 33 Fred Wren, Huntsville 2 35 Stephen Lee, Orange 6 20 Gary Tucker, First Technology Services 23 39 17
    • 19. 18 $3,279 $3,776 $4,121 $4,502 $5,222 $5,281 2009 2010 2011 2012 2013 2014 Growth in Total Assets Asset Performance (in millions) *As of March 31, 2014
    • 20. 19 $836 $959 $1,102 $1,312 $1,362 $1,389 $1,849 $2,154 $2,233 $2,321 $2,773 $2,845 2009 2010 2011 2012 2013 2014 Non Interest Bearing Interest Bearing Deposit Growth Growth in FFIN Total Deposits (in millions) $4,234 $2,685 $3,113 $3,335 $3,633 $4,135 *As of March 31, 2014
    • 21. 20 Deposit Products Time 16.1% Demand 32.8% Money Market 39.9% Savings 11.2% *As of March 31, 2014
    • 22. Account Growth Net Growth in 2011 – 4,036 Accounts Net Growth in 2012 – 1,219 Accounts Net Growth in 2013 – 3,308 Accounts* New Growth in 2014 – 2,600 Accounts December 31, 2011 December 31, 2012 December 31, 2013* March 31, 2014 Total Number of Accounts 204,063 205,282 208,590 226,527 21 *(Excluding Orange Acquisition)
    • 23. $77 $73 $81 $66 $68 $76 $65 $191 $175 $191 $218 $273 $333 $336$52 $0 $0 $391 $406 $429 $427 $510 $596 $599 $855 $860 $990 $1,076 $1,238 $1,684 $1,699 2008 2009 2010 2011 2012 2013 2014 Real Estate Commercial Student Consumer Agricultural Loan Performance Growth in FFIN Total Loans (in millions) $1,514 $1,690 $1,787 $2,089 $1,566 $2,699 22 $2,689 *As of March 31, 2014
    • 24. 23 Overview of Loan Portfolio Commercial 22.2% Agriculture 2.4% Consumer 12.4% Real Estate 63.0% *As of March 31, 2014
    • 25. Residential Development & Construction 6.7% 1-4 Family 46.9% Commercial Development and Construction 2.7% Commercial R/E 30.1% Other R/E 13.6% 24 Breakdown of R/E Loan Portfolio *As of March 31, 2014
    • 26. 25 2008 2009 2010 2011 2012 2013 2014 End of Period 60.6 56.4 54.3 53.6 57.5 65.0 63.7 Average Balances 61.1 59.5 56.0 54.6 56.4 64.3 64.9 Loan to Deposit Ratio *As of March 31, 2014
    • 27. 26 Less than 1 year 1 to 3 years 3 to 5 years 5 to 10 years 10 to 15 years Over 15 years 33.2% 5.5% 5.1% 16.3% 18.9% 12.1% 8.9% Variable and Fixed Rate Loans Loan Portfolio Interest Rate Risk Analysis Variable Rate Fixed Rate *As of March 31, 2014
    • 28. 2009 2010 2011 2012 2013 2014 First Financial 1.46% 1.53% 1.64% 1.22% 1.16% 1.02% Peer Group 5.41% 5.37% 4.59% 3.67% 2.72% - Sound Lending Practices Nonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers) 27 *As of March 31, 2014
    • 29. 28 $21,529 $27,612 $31,106 $34,315 $34,839 $33,900 $34,693* $7,957 $11,419 $8,962 $6,626 $3,484 $3,753 $1,690 2008 2009 2010 2011 2012 2013 2014 ALLL Provision Allowance for Loan Losses and Provision for Loan Losses (in thousands) *As of March 31, 2014
    • 30. Summary of Bond Portfolio Agencies 6.35% Corporates 4.29% Muni 48.30% MBSs 17.74% CMOs 23.32% 29 *As of March 31, 2014
    • 31. Municipal Allocation by State State Percentage Texas 71.35% Michigan 2.66% Wisconsin 2.46% Illinois 2.19% Washington 2.18% Massachusetts 1.44% New Jersey 1.40% Florida 1.32% Ohio 1.20% Louisiana 1.14% Utah 1.14% Kentucky 1.07% Other 38 states 10.45% 30 *As of March 31, 2014
    • 32. 31 $1,664 $1,784 $1,912 $2,232 $2,465 $2,552 2009 2010 2011 2012 2013 2014 Growth in Trust Assets Total Trust Assets – Book Value (in millions) *As of March 31, 2014
    • 33. 32 $9,083 $10,808 $12,671 $14,464 $16,317 $2,117 $2,526 $3,044 $3,454 $3,793 $4,576 2009 2010 2011 2012 2013 2014 thru March 31st Total Trust Fees Growth in FFTAM Fees (Full year and 1st 3 months) (in thousands)
    • 34. $53.8 $59.7 $68.4 $74.2 $78.9 $13.7 $13.7 $16.3 $17.8 $18.6 $22.3 2009 2010 2011 2012 2013 2014 27th Consecutive Year of Increased Earnings FFIN Earnings (Full year and 1st 3 months) (in millions) 33 thru March 31st
    • 35. 34 $0.86 $0.95 $1.09 $1.18 $1.24 $0.22 $0.22 $0.26 $0.28 $0.29 $0.35 2009 2010 2011 2012 2013 2014 Strong Shareholder Earnings Basic Earnings Per Share (Full year and 1st 3 months) thru March 31st *Per share amounts reflect the 2 for 1 stock split that was announced April 22, 2014 for shareholders of record as of May 15, 2014, with distribution on June 2, 2014.
    • 36. 1.72% 1.74% 1.72% 1.75% 1.78% 1.75% 1.64% 0.87% -0.03% -0.18% 0.24% 0.79% 0.98% 1.05% 2007 2008 2009 2010 2011 2012 2013 FFIN Outperforms Peers Percentage Return on Average Assets PeerGroup FirstFinancial 35
    • 37. 15.87% 15.27% 13.63% 13.74% 14.44% 13.85% 13.75% 9.45% -1.83% -2.57% 0.88% 7.27% 8.56% 8.99% 2007 2008 2009 2010 2011 2012 2013 Strong Return on Capital Percentage Return on Average Equity PeerGroup FirstFinancial 36
    • 38. 37 2010 2011 2012 2013 2014 Shareholders’ Equity 441,688 508,537 556,963 587,647 616,566 As a Percent of Total Assets 11.70 12.34 12.37 11.25 11.68 Tangible Capital 369,164 436,415 484,990 490,163 519,084 Tier 1 Leverage Ratio 10.28 10.33 10.60 9.84 9.95 Tier 1 Risk Based Capital Ratio 17.01 17.49 17.43 15.82 16.24 Risk Based Capital Ratio 18.26 18.74 18.68 16.92 17.39 Capital & Capital Ratios (dollars in thousands) *As of March 31, 2014
    • 39. 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% 4.75% 5.00% 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 3rd Qtr. '13 4th Qtr. '13 1st Qtr. '14 First Financial Peer Group Net Interest Margin Quarterly Interest Margin 38
    • 40. 2008 2009 2010 2011 2012 2013 2014 First Financial 50.76% 50.11% 49.49% 48.37% 48.14% 50.19% 47.57% Peer Group 68.12% 69.53% 67.33% 65.57% 65.77% 67.39% - Working Harder and Smarter Efficiency Ratio (FFIN vs. Peers) 39 *As of March 31, 2014
    • 41. Stock cost in January 2013 $39,010 Dividend declared ($1.03 x 1,000 shares) $ 1,030 Increase in stock price during 2013 ($66.11 from $39.01 X 1,000 shares) $2210,720 2013 return on investment 72.11% 2012 return on investment 19.65% 2011 return on investment 0.61% 2010 return on investment -2.99% 2009 return on investment 0.69% 5 year compound average return 14.01% Total Return on Investment $27,100 Assume you owned 1,000 shares of FFIN stock on January 1, 2013… 40
    • 42. Dividends Per Share $0.42 $0.45 $0.45 $0.46 $0.48 $0.50 $0.52 2007 2008 2009 2010 2011 2012 2013 Annual Dividends Declared Per Share* 41 *Dividend amounts reflect the 2 for 1 stock split that was announced April 22, 2014 for shareholders of record as of May 15, 2014, with distribution on June 2, 2014.
    • 43. Strong Stock Performance -100.00% -50.00% 0.00% 50.00% 100.00% 150.00% FFIN S&P 500 NASDAQ Dow Jones Jan . ‘07 Mar. ’14Dec . ‘09Dec ‘07 Dec ‘08 Dec. ‘10 Dec. ’11 Dec. ’12 42
    • 44. 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
    • 45. Opportunities  Loan Growth  Mortgage Lending  Trust Services  Treasury Management  Mobile Banking  Lower Efficiency Ratio  Potential Acquisitions 44
    • 46. www.ffin.com