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2019 FFIN Annual Shareholders Meeting Presentation
The document provides information about First Financial Bank's executive management team, board of directors, and financial performance in 2018 and the first quarter of 2019. It summarizes that First Financial had strong earnings growth, outperforming its peers in key metrics like return on assets and equity. Total assets, loans, and deposits all increased significantly from 2013 to 2018.
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2019 FFIN Annual Shareholders Meeting Presentation
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- 2. Executive Management Team 4348 Scott Dueser Chairmanofthe Board, Presidentand Chief ExecutiveOfficer At FFIN In Banking 2
- 3. Executive Management Team RonButler ExecutiveVice President Chief AdministrativeOfficer 26AtFFIN 37In Banking Tim Collard ExecutiveVice President Lending 27AtFFIN 38In Banking 3
- 4. Executive Management Team TroyFore President FirstFinancialMortgage 4AtFFIN 38In Banking Gary S.Gragg ExecutiveVice President Chief LendingOfficer 28AtFFIN 40In Banking 4
- 5. Executive Management Team J.BruceHildebrand, CPA ExecutiveVice President Chief Financial Officer 16AtFFIN 40In Banking Monica Houston ExecutiveVice President RetailBankingand Training 23AtFFIN 23In Banking 5
- 6. Executive Management Team RandyRoewe ExecutiveVicePresident Chief RiskOfficer 4AtFFIN 29In Banking LukeLonghofer 8AtFFIN 16In Banking ExecutiveVicePresident Chief CreditOfficer 6
- 7. Executive Management Team JohnRuzicka Executive Vice President Chief Information Officer AtFFIN 39In Banking 1 Michele Stevens Executive Vice President Advertising and Marketing 22AtFFIN 35In Banking 7
- 8. Executive Management Team KirkThaxton,CTFA Chairman,President, and CEO First Financial Trust and Asset Management 32AtFFIN 36In Banking MarnaYerigan Executive Vice President Lending 8AtFFIN 38In Banking 8
- 9. Senior ManagementTeam Brandon Harris SeniorVicePresident AppraisalServices 5AtFFIN 18In Banking Larry Kentz SeniorVice Presidentand Compliance Officer Compliance 5AtFFIN 38In Banking J. Kyle McVey, CPA SeniorVice President Chief AccountingOfficer 9AtFFIN 11In Banking 9
- 10. Line of BusinessExecutives Brandon Barker Co-Manager FirstFinancialInvestmentAdvisors 13 At FFIN | 26 In Banking Will Christoferson Vice President Marketing 1 At FFIN | 10 In Banking Frank Gioia Senior Vice President CustomerCareCenter 4 At FFIN | 32 In Banking Tony Gorman SeniorVice President HumanResources 5 At FFIN | 32 In Banking Rick Howard Co-Manager FirstFinancialInvestmentAdvisors 9 At FFIN | 12 In Banking Gary Milliorn Vice President PropertyManagement 4 At FFIN | 30 In Banking AndreaSmiddy-Schlagel ExecutiveVice President TreasuryManagement 1 At FFIN | 31 In Banking MichaelWolverton ExecutiveVice President Consumer Lending 8 At FFIN | 34 In Banking 10
- 11. Experienced Regional CEOs& Presidents Joseph Crouch Sweetwater 2AtFFIN 23In Banking Mike Mauldin Hereford 17AtFFIN 42In Banking David Bailey Eastland 16AtFFIN 16In Banking Marelyn Shedd Abilene 29AtFFIN 36In Banking 11
- 12. Experienced Regional CEOs& Presidents Chris Evatt San Angelo 19AtFFIN 19In Banking Trent Swearengin Stephenville 20AtFFIN 22In Banking Austin Elsner Cleburne 2AtFFIN 19In Banking Justin Hooper Weatherford 15AtFFIN 26In Banking 12
- 13. Experienced Regional CEOs& Presidents Mark Jones Southlake 19AtFFIN 42In Banking Sam Baker Conroe 4AtFFIN 43In Banking Stephen Lee Southeast Texas 7AtFFIN 31In Banking Kirby Cason Huntsville 1AtFFIN 13In Banking 13
- 14. Experienced Regional CEOs& Presidents Johnny Brooks Kingwood 1AtFFIN 37In Banking MarcusMorris Fort Worth 9AtFFIN 11In Banking 14 ShelleyDacus Kingwood 1AtFFIN 15In Banking
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- 17. 2019 ANNUAL SHAREHOLDERS’MEETING 17
- 18. Board of Directors AprilAnthony ChiefExecutiveOfficerEncompassHomeHealth andHospice& Homecare Homebase 4 Audit CommitteeAppointmentYears On Board President, Mansefeldt Investment Corporation TuckerS. Bridwell 12 Lead Director/Executive Nominating/Corporate Governance CommitteeAppointmentYears On Board DavidCopeland President,SIPCO, Inc. and Shelton Family Foundation 21 Executive/Audit Nominating/Corporate Governance CommitteeAppointmentYears On Board 18 MikeDenny President, Batjer and Associates, Inc. CommitteeAppointmentYears On Board Audit
- 19. Board of Directors Principal,TheEdwards Group Murray Edwards 13 Executive/Audit Nominating/Corporate Governance CommitteeAppointmentYears On Board G&G Investments Ron Giddiens 10 CommitteeAppointmentYears On Board Audit RetiredPresidentand CEOHendrickHealth System TimLancaster 6 CommitteeAppointmentYears On Board Audit/Compensation F. Scott Dueser Chairmanof theBoard,PresidentandCEO 28 Executive CommitteeAppointmentYears On Board 19
- 20. Board of Directors Presidentand CEO LivestockInvestors,Ltd. JohnnyE. Trotter 16 CommitteeAppointmentYears On Board Executive Compensation Nominating/Corporate Governance Chairman and President Akrotex,Inc. RossH. Smith,Jr. 5 CommitteeAppointmentYears On Board Compensation KadeL.Matthews RanchingandInvestments 21 Compensation CommitteeAppointmentYears On Board 20 Executive Chairman of Alegacy Group, LLC RobertC.Nickles,Jr. CommitteeAppointmentYears On Board Compensation
- 21. 2019 ANNUAL SHAREHOLDERS’MEETING 21
- 22. Certain statements containedhereinmay be considered“forward-lookingstatements” as defined in the Private SecuritiesLitigation Reform Act of 1995. Thesestatements are based upon the belief of the Company’s management, as wellas assumptionsmade beyond information currentlyavailable to the Company’s management, and may be, butnot necessarilyare, identified by suchwords as “believes,”“expect,” “plan,” “anticipate,” “target,”“forecast”and “goal”. Because such forward-lookingstatements are subjectto risksand uncertainties, actual resultsmay differmaterially from those expressedor implied by such forward-lookingstatements. Factors that could cause actual resultsto differmaterially from the Company’s expectationsinclude competition from other financial institutions and financial holding companies; the effectsofand changes in trade, monetaryand fiscal policiesand laws, including interestratepoliciesof the FederalReserveBoard; changes in the demand for loans, fluctuations in value ofcollateraland loan reserves;inflation, interestrate, marketand monetary fluctuations; changes in consumerspending, borrowingor saving habits; and acquisitions and integration of acquired businesses,and similarvariables. Other keyrisksare describedin the Company’s reportsfiled with the Securitiesand Exchange Commission, which may be obtained under “InvestorRelations-Documentsand Filings”on the Company’s websiteor by writing or calling the Company at325.627.7155. Exceptas otherwisestated herein, the Company does not undertakeany obligation to update publiclyor reviseany forward-lookingstatements because ofnew information, future eventsor otherwise. Forward Looking Statement 22
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- 24. $78.9 $89.6 $100.4 $104.8 $120.4 $150.6 2013 20142015 2016 2017 2018 $7.65* $0.66* FFIN Earnings (inmillions) 32nd ConsecutiveYear of Increased Earnings * Adjusted for tax ratechange 24
- 25. $1.24 $1.40 $1.55 $1.59 $1.82 $2.23 2013 20142015 2016 2017 2018 $0.11* * Adjusted for tax ratechange $0.01* Basic EarningsPerShare Strong Shareholder Earnings 25
- 26. 2013 2014 20152016 2017 2018 First Financial 50.20% 49.24% 47.61% 49.22% 49.26% 49.72% PeerGroup 67.87% 66.94% 63.92% 62.83% 61.01% 60.51% Working Harder and Smarter Efficiency Ratio (FFIN vs. Peers) 26
- 27. 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% First Financial PeerGroup QuarterlyInterestMargin Net InterestMargin 2015 2016 2017 2018 27
- 28. 1.64% 1.65% 1.61%1.59% 1.72% 1.98% 1.03% 0.95% 0.95% 1.00% 0.95% 1.22% 2013 2014 2015 2016 2017 2018 First Financial Peer Group PercentageReturnon Average Assets FFIN Outperforms Peers 28
- 29. 13.75% 14.00% 13.60% 12.36% 13.63% 15.37% 8.88% 8.32%8.59% 9.16% 8.67% 10.86% 2013 2014 2015 2016 2017 2018 FirstFinancial Peer Group PercentageReturnon Average Equity Strong Returnon Capital 29
- 30. 100.4 12/31/18 3/31/19 Tomeet Requirementsof BASEL III for 2019 Tier 1 Leverage Ratio 11.85 12.08 >4.00 CommonEquity Tier 1CapitalRatio 19.47 19.86 >7.00 Tier 1CapitalRatio 19.47 19.86 >8.50 TotalCapitalRatio 20.61 21.00 >10.50 Capital Ratios 30
- 31. $5,222 $5,848 $6,665 $6,810 $7,255 $7,732 20132014 2015 2016 2017 2018 Growth in Total Assets (inmillions) Asset Performance 31
- 32. $76 $106 $102$84 $95 $97 $334 $361 $386 $409 $404 $373 $590 $640 $685 $674 $683 $845 $777 $855 $971 $1,009 $1,069 $1,143 $912 $976 $1,207 $1,208 $1,250 $1,517 2013 2014 2015 2016 2017 2018 Agricultural Consumer Commercial 1-4 Family Real Estate CommercialReal Estate Growth in FFINTotal Loans (in millions) Loan Performance $2,689 $2,938 $3,351 $3,384 $3,501 $3,975 32
- 33. 2013 2014 20152016 2017 2018 First Financial 1.16% 0.74% 0.90% 0.86% 0.57% 0.75% PeerGroup 2.71% 1.92% 1.32% 1.05% 0.86% 0.82% Sound LendingPractices Nonperforming Assets as a Percentage of Loans + Foreclosed Assets (FFIN vs Peers) 33
- 34. $1,362 $1,570 $1,746$1,718 $2,042 $2,116 $2,773 $3,180 $3,444 $3,761 $3,921 $4,064 2013 2014 2015 2016 2017 2018 Non Interest Bearing InterestBearing Growth in FFINTotal Deposits (inmillions) Deposit Growth $4,135 $4,750 $5,190 $5,479 $5,963 $6,180 34
- 35. 1st Quarter 2019Summary 35
- 36. $22.3 $24.0 $25.7$26.6 $34.5 $38.3 2014 2015 2016 2017 2018 2019 FFIN Earnings (inmillions) 1st Quarter Earnings 36
- 37. $0.35 $0.37 $0.39$0.40 $0.51 $0.56 2014 2015 2016 2017 2018 2019 Basic EarningsPerShare ShareholderEarnings- 1st Quarter 37
- 38. $5,848 $6,665 $6,810 $7,255 $7,732$7,945* 2014 2015 2016 2017 2018 2019 Growth in Total Assets (inmillions) Asset Performance *AsofMarch31,2019 38
- 39. $106 $102 $84$95 $97 $91 $361 $386 $409 $404 $373 $386 $640 $685 $674 $683 $845 $822 $855 $971 $1,009 $1,069 $1,143 $1,200 $976 $1,207 $1,208 $1,250 $1,517 $1,505 2014 2015 2016 2017 2018 2019 Agricultural Consumer Commercial 1-4 Family Real Estate CommercialReal Estate Growth in FFINTotal Loans (in millions) Loan Performance $2,938 $3,351 $3,384 $3,501 $3,975 $4,004* *AsofMarch31,2019 39
- 40. $1,570 $1,746 $1,718$2,042 $2,116 $2,166 $3,180 $3,444 $3,761 $3,921 $4,064 $4,185 2014 2015 2016 2017 2018 2019 Non Interest Bearing InterestBearing Growth in FFINTotal Deposits (inmillions) Deposit Growth $4,750 $5,190 $5,479 $5,963 $6,180 $6,351* *AsofMarch31,2019 40
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- 42. $2,465 $2,774 $3,060 $3,374 $3,866 $4,294 $3,361 $3,759 $3,870 $4,373 $5,132 $5,599 2013 20142015 2016 2017 2018 Book Value Fair Value Growth in Trust Assets TotalTrust Assets –Book Value/Fair Value(in millions) 42
- 43. $16,317 $18,766 $19,252 $19,636 $23,694 $28,181 20132014 2015 2016 2017 2018 Growth in FFTAMFees (in thousands) Total Trust Fees 43
- 44. $2,648 $3,150 $2,005 $1,709 $2,413 $4,821 2013 2014 20152016 2017 2018 Growth in Mineral Management (inthousands) Revenuefrom MineralManagement 44
- 45. $6,142 $7,109 $7,449 $7,190 $8,579 $13,532 20132014 2015 2016 2017 2018 Growth in FFTAMNet Income (in thousands) Total Trust NetIncome 45
- 46. Managed Equity Styles •EquityIncome •CoreDomestic •Core Diversified •Core World •StrategicGrowth 46
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- 48. Trust Locations • Abilene •Sweetwater • Beaumont • San Angelo • Fort Worth • Stephenville • Houston • Odessa 48
- 49. BOOKVALUE OFTRUST ASSETS(in millions) 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 4919
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- 51. 2019 ANNUAL SHAREHOLDERS’MEETING 51
- 52. $78.9 $89.6 $100.4 $104.8 $120.4 $150.6 2013 20142015 2016 2017 2018 $7.65* $0.66* FFIN Earnings (inmillions) 32nd ConsecutiveYear of Increased Earnings * Adjusted for tax ratechange 52
- 53. Improvements for 2019 GrowLoans and Deposits Improve Our Interest Rate Margin 53
- 54. Improvements for 2019 GrowMortgage & Trust Increase Our Fee Income 54
- 55. Improvements for 2019 Continueto Improve Credit Quality Control Expenses 55
- 56. Improvements for 2019 MakeAnother Acquisition 56
- 57. Consummated January1,2018 4 Branchesin Kingwood, El Campo, Fulshear,Palacios $390.2 million in Assetsas ofDecember 31, 2017 $345.9 million in deposits $271.5 million in loans $59.4 million purchaseprice represents13.78x last twelve monthsearnings Commercial Bankshares,Inc. paid a special dividend totaling $22.3 million prior toclosing of transaction CommercialState Bank – KingwoodAcquisition 57
- 58. Kingwood acquisitionis consistent with ouracquisition model ofhigh growthareas, strong management and excellent earningsopportunity Provides diversification and fits well into ourfootprint Managementand Board sharesame values tooutstanding customerservice Net Income of$6.06 million and an ROAof1.63% CommercialState Bank – KingwoodAcquisition 58
- 59. 11 Regions AcrossTexas 59
- 60. 11 Regions AcrossTexas Abilene Region • Abilene • Clyde • Moran • Albany • Odessa • Sweetwater • Roby • Trent • Merkel • Eastland • Rising Star • Ranger • Cisco 23Locations 60
- 61. 11 Regions AcrossTexas Hereford Region • Hereford 1 Location 61
- 62. 11 Regions AcrossTexas San Angelo Region • SanAngelo 2 Locations 62
- 63. 11 Regions AcrossTexas Cleburne Region • Cleburne • Burleson • Alvarado • Midlothian • Waxahachie 6 Locations 63
- 64. 11 Regions AcrossTexas Stephenville Region • Stephenville • Granbury • GlenRose • Acton • MineralWells 7 Locations 64
- 65. 11 Regions AcrossTexas Weatherford Region • Weatherford • Aledo • Willow Park • Brock 6 Locations 65
- 66. 11 Regions AcrossTexas Southlake Region • Southlake • Trophy Club • Keller • Bridgeport • Boyd • Decatur • Grapevine 7 Locations 66
- 67. 11 Regions AcrossTexas Southeast TexasRegion • Orange • Port Arthur • Vidor • Mauriceville • Newton • Beaumont 6 Locations 67
- 68. 11 Regions AcrossTexas Conroe Region • Conroe • Montgomery • CutandShoot • Willis • Tomball • Spring • Magnolia • Huntsville • New Waverly 10Locations 68
- 69. 11 Regions AcrossTexas Fort Worth Region • Fort Worth 1 Location 69
- 70. Kingwood Region 11 RegionsAcross Texas • Kingwood • El Campo • Fulshear • Palacios 4 Locations 70
- 71. 11 Regions AcrossTexas • Abilene • Hereford • San Angelo • Cleburne • Stephenville • Weatherford • Southlake • Southeast Texas • Conroe • Fort Worth • Kingwood 73Locations 71
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- 75. Management Changes March 2018 WillChristoferson Vice President – Marketing May 2019 Michele Stevens Retires after 22years of service - First FinancialBankshares 75 March 2018 Joseph Crouch President – Sweetwater Division
- 76. Management Changes 76 April 2018 AustinElsner President andCEO–CleburneRegion April 2018 Tom O’Neil Retires after 20years of service – Abilene, Eastland,andCleburne Regions August 2018 KirbyCason President – Huntsville Division August 2018 Robert Pate Retires after 34years of service – Huntsville Division
- 77. Management Changes 77 September 2018 AndreaSmiddy-Schlagel ExecutiveVice President –Treasury Management December 2018 John Ruzicka Chief Information Officerand Chairman, President and CEO – First Technology Services, Inc. December 2018 Justin Hooper President andCEO–Weatherford Region December 2018 Jay Gibbs Retires after 16years of service – Weatherford Region
- 78. Management Changes April 2019 MarcusMorris President and CEO of Fort Worth Region 78 March 2019 Shelley Dacus President Kingwood Region
- 79. Management Changes December 2018 JuneWideman Executive Assistantto Scott Dueserretiresafter 35 yearsof service 79
- 80. Board of Directors MikeDenny President, Batjer and Associates, Inc. Executive Chairmanof Alegacy Group, LLC Robert C. Nickles, Jr. 80
- 81. Stock cost inJanuary 2018 $45,050 Dividend declared ($0.82x1,000shares) $820 Increase in stock price during 2018($45.05to$57.69x1,000shares) $12,640 2018return on investment 28.06% 2017return on investment 1.33% 2016return on investment 52.14% 2015return on investment 3.05% 2014return on investment -7.96% 5 year compound average return 13.09% TotalReturn onInvestment Assumeyouowned 1,000shares of FFIN stockon January1, 2018 81
- 82. -100% -50% 0% 50% 100% 150% 200% 250% 300% 350% 400% Strong Stock Performance 20072008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dow Jones S&P 500 NASDAQ FFIN 2018 2019 82
- 83. $0.55 $0.62 $0.70 $0.75 $0.82 2014 2015 20162017 2018 AnnualDividends Declared PerShare Dividends Per Share 83
- 84. Effective Shareholdersof recordas of May15, 2019 Distribution Date June 3, 2019 Stock Split and IncreasedCash Dividend Two-for-One Stock Split 100% Stock Dividend 84
- 85. Shareholders ofrecordas of June 17, 2019 Dividend payable July 1, 2019 Stock Split and IncreasedCash Dividend Increase cash divided to $0.12per quarter – 14.3% increase 85
- 86.