First Financial Bankshares, Inc. · NASDAQ:FFIN
First Financial Bankshares — Investor Presentation (September 2008)
51 slides from First Financial Bankshares's investor presentation, Sep 25, 2008
Slide 1: First Financial Bankshares, Inc. - A Family of Community Banks
F RST FINANCIAL BANKSHARES, INC. A Family of Community Banks Eeracd
Slide 2: Forward Looking Statement
Forward Looking Statement The numbers, as of and for the six months ended June 30, 2008, 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
Slide 3: Who We Are
3 Who We Are $3.1 billion financial holding company headquartered in Abilene, Texas Group of 10 separately chartered banks 119 year history Growth markets include 50 mile radius of the DFW metroplex
Slide 4: Recognitions
5 Recognitions KBW Honor Roll Standard & Poor's SmallCap 600 Index NASDAQ Financial-100 Index NASDAQ Dividend Achievers Index NASDAQ Global Select Market
Slide 5: What Makes Us Different
7 What Makes Us Different One Bank, Ten Charters Concept One Bank Consolidation of backroom operations (lower efficiency ratio) Agency agreements (customers may use any of our 48 locations) Ten Community Bank Charters Bank Presidents run their banks Local Boards Keep our banks locally focused Make s
Slide 6: FFIN's Unique Positioning in Texas
9 FFIN's Unique Positioning in Texas Bank Key Markets BBVA / Texas Regional / State National / Compass Rio Grande, Gulf Coast, Houston, Dallas, El Paso, Lubbock Encore Bancshares Houston, Florida Franklin East and Central Texas Frost / Summit San Antonio, Austin, Corpus Christi, DFW, Rio Grande Guar
Slide 7: Banks & Locations
Banks & Locations FIRST FINANCIAL BANKSHARES, inc. fami commit banks
Slide 8: Core Markets: West Central Texas
13 Core Markets: West Central Texas Markets served benefiting from well-established, long- time customers BANK ASSET SIZE* LOCATIONS DEPOSIT MARKET SHARE** MARKET SHARE RANK** First Financial Bank (Abilene, Clyde, Moran, Albany) $1,016 M 13 41% 1 Hereford State Bank $143 M 1 45% 1 First Financial Ba
Slide 9: Expansion Markets: DFW Area
15 Expansion Markets: DFW Area Markets served benefiting from growth in western part of Dallas/Fort Worth Metroplex BANK ASSET SIZE* LOCATIONS DEPOSIT MARKET SHARE** MARKET SHARE RANK** First Financial Bank (Cleburne, Burleson, Alvarado, Midlothian) $244 M 5 17% 2 First Financial Bank (Southlake, Tr
Slide 10: Economic Drivers in our Markets - Abilene, Hereford
17 Economic Drivers in our Markets Abilene Wind Energy ? Retail Oil and Gas ? Higher Education Agriculture ? Manufacturing Medical ? Military Hereford Capital of the Cattle Feeding Industry Dairy ? Manufacturing Ethanol ? Agriculture Related Industries Farming
Slide 11: Economic Drivers in our Markets - Eastland, Sweetwater
19 Economic Drivers in our Markets Eastland Transportation ? Oil and Gas Retail ? Medical Manufacturing ? Agriculture Sweetwater Wind Energy ? Farming Retail ? Higher Education Medical ? Manufacturing
Slide 12: Economic Drivers in our Markets - San Angelo, Cleburne
21 Economic Drivers in our Markets San Angelo Higher Education ? Medical Military ? Agriculture Manufacturing ? Service Cleburne Barnett Shale ? Manufacturing Oil and Gas Servicing ? Warehouse and Distribution Retail ? Concrete and Steel
Slide 13: Economic Drivers in our Markets - Southlake, Stephenville
23 Economic Drivers in our Markets Southlake Barnett Shale ? Technology Oil and Gas Servicing ? Agriculture Retail ? Tourism Residential and Development Stephenville Higher Education ? Nuclear Energy Tourism ? Retirement Manufacturing ? Dairy and Agriculture Rodeo Capital
Slide 14: Economic Drivers in our Markets - Weatherford, Mineral Wells
25 Economic Drivers in our Markets Weatherford Capital of the Cutting Horse Industry Barnett Shale ? Higher Education Retail ? Medical Residential Construction Mineral Wells Barnett Shale ? Tourism Oil and Gas Servicing ? Medical Ranching ? Manufacturing
Slide 15: Strategy in Growth Markets
27 Strategy in Growth Markets Target growing communities with good infrastructure and amenities on the outskirts of the DFW metroplex Bank of choice Aim for #1 market share Be the community leader Have board made up of movers and shakers Benefit from more rational competitive environment
Slide 16: Target Banks for Acquisitions
29 Target Banks for Acquisitions Strategic: Asset size of $100 - $300 million Non-metropolitan areas Within 50 miles of DFW, I-35 corridor, east Texas and Texas Hill Country Utilize correspondent bank relationships Actively calling on banks that fit our profile
Slide 17: De Novo Growth - Acton
De Novo Growth — Acton ems rami
Slide 18: De Novo Growth - Brock
33 De Novo Growth - Brock 17
Slide 19: First Financial Bank, Southlake - Decatur
35 First Financial Bank, Southlake - Decatur 18
Slide 20: Texas: Large and Growing
37 Texas: Large and Growing Five most populous states:* Growth (2000 - 2006) Five most populous states:* Growth (2000 - 2006) Five most populous states:* Growth (2000 - 2006) Five most populous states:* Growth (2000 - 2006) Five most populous states:* Growth (2000 - 2006) Five most populous states:*
Slide 21: Target Markets - Population Growth
39 Target Markets - Population Growth Population growth (2000-2006) in FFIN expansion markets:* Population growth (2000-2006) in FFIN expansion markets:* Population growth (2000-2006) in FFIN expansion markets:* Population growth (2000-2006) in FFIN expansion markets:* Population growth (2000-2006)
Slide 22: Acquisitions: Granbury and Glen Rose
41 Acquisitions: Granbury and Glen Rose Merged with First Financial Bank, Stephenville Added $109 million in assets to create $261M combined bank which has now grown to $323M at June 30, 2008 Granbury, Glen Rose southwest of Fort Worth
Slide 23: Acquisition: First National Bank of Bridgeport
43 Acquisition: First National Bank of Bridgeport $146 million in assets Combined with First Financial Bank, Southlake, to create $250 million bank which has now grown to $285M at June 30, 2008 40 miles northwest of Fort Worth
Slide 24: Experienced Management Team
45 Experienced Management Team Years with Company Years in Industry Kenneth T. Murphy Senior Chairman 36 44 Scott Dueser Chairman of the Board, President & Chief Executive Officer 32 37 J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer 6 29 Gary L. Webb Executive Vice Preside
Slide 25: Experienced Bank CEOs
47 Experienced Bank CEOs Years with Company Years with Company Years in Industry Ron Butler, FFB Abilene Ron Butler, FFB Abilene 15 26 26 Mike Mauldin, Hereford SB Mike Mauldin, Hereford SB 6 29 29 J.V. Martin, FFB Sweetwater J.V. Martin, FFB Sweetwater 19 40 40 Tommy Barrow, FFB Eastland Tommy Barr
Slide 26: Growth in Total Assets
49 2003 2004 2005 2006 2007 2008 2093 2315 2734 2850 3070 3085 Growth in Total Assets Asset Performance 47% Growth (in millions) (thru June 30th)
Slide 27: Deposit Growth
51 2003 2004 2005 2006 2007 2008 Non Interest Bearing 472 512 623 685 739 808 Interest Bearing 1324 1482 1743 1699 1807 1761 Deposit Growth Growth in FFIN Total Deposits (in millions) $1,796 $1,994 $2,366 $2,384 $2,546 $2,569 (thru June 30th)
Slide 28: Deposit Products
53 Deposit Products Time Demand Money Market Savings East 29 31 34 6 (thru June 30th)
Slide 29: Loan Performance: Growth in Total Loans
55 2003 2004 2005 2006 2007 2008 Agricultural 69 80 85 73 84 66 Consumer 134 144 160 165 182 185 Student 54 32 37 31 32 4 Commercial 261 298 330 344 394 412 Real Estate 470 610 677 760 836 846 Loan Performance Growth in FFIN Total Loans (in millions) $988 $1,289 $1,373 $1,528 $1,513 $1,164 (thru Jun
Slide 30: Major Products and Services
57 Major Products and Services Commercial Banking Small business, real estate, agriculture Significant relationships with medical profession Consumer Banking Personal banking services and mortgage originations Student Loans 9th largest lender in Texas (dollars)
Slide 31: Overview of Loan Portfolio
59 Overview of Loan Portfolio Commercial Agriculture Consumer Real Estate Student Loans East 27 4 12 56 1 (thru June 30th)
Slide 32: Breakdown of R/E Loan Portfolio
61 Breakdown of R/E Loan Portfolio Residential Development & Construction 1-4 Family Commercial Development and Construction Commercial R/E Other R/E 118119915 241379327 84666876 272486390 143994049 (thru June 30th)
Slide 33: Loan to Deposit Ratio
63 2003 2004 2005 2006 2007 2008 End of Period 55.0 58.4 54.5 57.6 60.0 58.9 Average Balances 54.4 57.5 57.6 56.6 59.8 61.3 Loan to Deposit Ratio (thru June 30th)
Slide 34: Loan Portfolio Interest Rate Risk Analysis
65 Less than 1 year 1 to 3 years 3 to 5 years 5 to 10 years 10 to 15 years Over 15 years $635,372 $210,501 $213,815 $257,174 $102,954 $53,785 $30,917 42.2% 14.0% 14.2% 17.1% 6.8% 3.6% 2.1% Variable and Fixed Rate Loans *Excludes Student Loans and Credit Cards Loans Loan Portfolio Interest Rate Risk
Slide 35: Sound Lending Practices
67 2003 2004 2005 2006 2007 2008 First Financial 0.32% 0.43% 0.33% 0.30% 0.31% 0.71% Peer Group 0.82% 0.67% 0.55% 0.60% 0.94% 1.30%* Sound Lending Practices Nonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers) (thru June 30th) *(As of March 31st)
Slide 36: Allowance for Loan Losses and Provision for Loan Losses
69 2002 2003 2004 2005 2006 2007 2008 ALLL 11219 11576 13837 14719 16201 17462 18677 Provision 2370 1178 1633 1320 2061 2331 2509 Allowance for Loan Losses and Provision for Loan Losses (in thousands) (thru June 30th)
Slide 37: Growth in Trust Assets
71 2003 2004 2005 2006 2007 2008 992 1068 1150 1300 1428 1556 Growth in Trust Assets 57% Growth Total Trust Assets - Book Value (in millions) (thru June 30th)
Slide 38: Growth in FFTAM Fees
73 2003 2004 2005 2006 2007 2008 6018 6374 7068 7665 8746 4728 Total Trust Fees 45% Growth Growth in FFTAM Fees (in thousands) thru June 30th
Slide 39: 21st Consecutive Year of Increased Earnings
75 2003 2004 2005 2006 2007 2008 35.3 39.17 44.02 46 49.5 17.7 19.3 22.7 22.9 24.7 26.8 21th Consecutive Year of Increased Earnings FFIN Earnings (Full year and 1st 6 months) (in millions) $2.5
Slide 40: Strong Shareholder Earnings
77 2003 2004 2005 2006 2007 2008 1.71 1.9 2.13 2.22 2.38 0.86 0.93 1.1 1.11 1.19 1.29 Strong Shareholder Earnings Basic Earnings Per Share (Full year and 1st 6 months) $0.13
Slide 41: Dividends Per Share
79 Dividends Per Share 2003 2004 2005 2006 2007 2008 0.91 1 1.1 1.18 1.26 0.66 Annual Dividends Per Share 38% Growth thru June 30th
Slide 42: FFIN Outperforms Peers: Return on Average Assets
81 2003 2004 2005 2006 2007 2008 0.0175 0.0182 0.018 0.0168 0.0172 0.0178 Peers 0.0117 0.0112 0.0115 0.011 0.0089 0.0072 FFIN Outperforms Peers Percentage Return on Average Assets Peer Group First Financial (thru June 30th) *(As of March 31st) *
Slide 43: Strong Return on Capital
83 2003 2004 2005 2006 2007 2008 0.144 0.1509 0.1615 0.162 0.1587 0.1548 Peers 0.1346 0.1311 0.1333 0.1262 0.0957 0.076 Strong Return on Capital Percentage Return on Average Equity Peer Group First Financial (thru June 30th) *(As of March 31st) *
Slide 44: Capital & Capital Ratios
85 2003 2004 2005 2006 2007 2008 2nd Quarter Shareholders' Equity 251,487 265,564 276,276 300,901 335,495 343,911 As a Percent of Total Assets 12.02 11.47 10.11 10.56 10.93 11.15 Tangible Capital 226,769 225,000 207,949 234,199 270,288 279,318 Tier 1 Leverage Ratio 10.60 9.80 8.56 8.87 9.23 9.55 Tie
Slide 45: Net Interest Margin
87 1st Qtr. '05 2nd Qtr. '05 3rd Qtr. '05 4th Qtr. '05 1st Qtr. '06 2nd Qtr. '06 3rd Qtr. '06 4th Qtr. '06 1st Qtr. '07 2nd Qtr. '07 3rd Qtr. '07 4th Qtr. '07 1st Qtr. '08 '2nd Qtr. '08 First Financial 0.0452 0.0453 0.0449 0.0443 0.0441 0.045 0.0449 0.0443 0.0438 0.0438 0.0445 0.045 0.0458 0.0461 Pe
Slide 46: Working Harder and Smarter: Efficiency Ratio
89 2003 2004 2005 2006 2007 2008 First Financial 52.52% 51.78% 52.48% 53.57% 52.83% 51.40% Peer Group 61.06% 61.14% 60.12% 61.32% 63.11% 63.70%* Working Harder and Smarter Efficiency Ratio (FFIN vs. Peers) (thru June 30th) *(As of March 31st)
Slide 47: Total Return on Investment
91 Stock cost in January 2007 $41,860 Dividend received ($1.26 x 1,000 shares) $ 1,260 Decrease in stock price during 2007 ($41.86 to $37.65 X 1,000 shares) $10,720 2007 return on investment -7.05% 2006 return on investment 22.76% 2005 return on investment 7.58% 2004 return on investment 12.22% 2003
Slide 48: Increasing Stock Liquidity
93 Shares Traded 2003 2004 2005 2006 2007 2008 5306 5052 6450 6967 13475 14254 Increasing Stock Liquidity (in millions) (thru June 30th)
Slide 49: A Decade of Growth
95 A Decade of Growth Year End Total Assets (billions) Net Income (millions) Basic EPS Cash Dividends Year-End Market Value 2007 $3.07 $49.5 $2.38 $1.26 $37.65 2006 $2.85 $46.0 $2.22 $1.18 $41.86 2005 $2.73 $44.0 $2.13 $1.10 $35.06 2004 $2.32 $39.2 $1.90 $1.00 $33.61 2003 $2.09 $35.3 $1.71 $0.91 $30
Slide 50: 2008 Goals
97 2008 Goals Effectively manage our net interest margin Leverage our strengths in treasury management, mortgage lending and trust services Look for additional acquisitions that complement our footprint Continue to expand into good locations
Slide 51: First Financial Bankshares, Inc. - A Family of Community Banks
F RST FINANCIAL BANKSHARES, INC. A Family of Community Banks Eeracd
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