8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): October 22, 2009

FIRST FINANCIAL BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas
(State or other Jurisdiction
of Incorporation) 0-7674
(Commission File No.) 75-0944023
(IRS Employer
Identification No.)

400 Pine Street, Abilene, Texas 79601
(Address of Principal Executive Offices and Zip Code)

Registrant’s Telephone Number (325) 627-7155

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 203.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

o   Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13 e-4 (c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     Attached as an exhibit to this Form 8-K is the earnings release for the quarter ended September 30, 2009 of First Financial Bankshares, Inc.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1     Press Release dated October 22, 2009

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST FINANCIAL BANKSHARES, INC. (Registrant)
DATE: October 22, 2009	By:	/S/ F. Scott Dueser
		F. SCOTT DUESER
		President and Chief Executive Officer

EX-99.1

Exhibit 99.1

For immediate release	For More Information:
	J. Bruce Hildebrand, Executive Vice President
	325.627.7155

FIRST FINANCIAL BANKSHARES ANNOUNCES
THIRD QUARTER EARNINGS

ABILENE, Texas, October 22, 2009 — First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2009 of $13.99 million, up 4.7 percent compared with earnings of $13.36 million in the same quarter last year. Basic earnings per share were $0.67 for the third quarter of 2009, up 4.7 percent from $0.64 a year ago.

Net interest income for the third quarter of 2009 increased 3.8 percent to $32.58 million compared with $31.40 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, rose to 4.92 percent for the third quarter of 2009 compared with 4.73 percent in the same period a year ago and 4.88 percent for the quarter ended June 30, 2009. The provision for loan losses was $3.71 million in the third quarter of 2009, up from $1.77 million in the same quarter last year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.30 percent at September 30, 2009, compared with 95 basis points at June 30, 2009, and 69 basis points at September 30, 2008.

Noninterest income in the third quarter of 2009 was $12.88 million compared with $12.29 million in the same quarter a year earlier. Noninterest income for the third quarter of 2009 included $897,000 from gains on securities transactions compared with $146,000 in gains during the same quarter a year ago. Noninterest income for the third quarter of 2009 also included $273,000 in pre-tax gain on the sale of student loans, which resulted from the Company’s sale of substantially all of the remainder of its student loan portfolio to the U.S. Department of Education.

Noninterest expense declined 1.6 percent in the third quarter of 2009 to $23.02 million from $23.38 million in the same quarter last year, although the Company’s FDIC insurance cost increased $656,000. The Company’s efficiency ratio in the third quarter of 2009 improved to 47.92 percent compared with 51.42 percent in the same quarter a year ago.

“We are pleased to report another quarter of earnings growth and improved net interest margin, especially in light of the national recession and low interest rate environment,” said F. Scott Dueser, President and Chief Executive Officer. “Our bank presidents continue to do an exceptional job of managing our net interest margin and their banks. Nonperforming assets increased from previous quarters as the national recession becomes more prevalent in Texas; however, our percentage is favorable compared to our peers.”

For the first nine months of 2009, net income increased 2.8 percent to $41.26 million from $40.13 million a year ago. Basic earnings per share rose to $1.98 for the first nine

months of 2009 from $1.93 in the same period last year. Net interest income increased 5.9 percent in the first nine months of 2009 to $96.63 million from $91.25 million a year ago. The provision for loan losses increased $2.8 million to $7.05 million as the Company continued to aggressively address problem loans and the slowing economy. Noninterest income was $36.54 million for the first nine months of 2009 compared with $38.06 million in the same period a year earlier. Noninterest expense was $70.33 million in the first nine months of 2009 compared with $69.06 million for the comparable period a year ago.

As of September 30, 2009, consolidated assets for the Company totaled $3.08 billion compared with $3.15 billion a year ago. Loans totaled $1.45 billion at quarter end, compared with loans of $1.57 billion a year ago. Total deposits were $2.46 billion as of September 30, 2009, compared with $2.56 billion a year earlier. Shareholders’ equity rose to $415.53 million as of September 30, 2009, compared with $350.42 million the prior year.

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 48 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Albany, Clyde and Moran; First Financial Bank, N.A., Eastland, Ranger and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado and Midlothian; First Financial Bank, Hereford; First Financial Bank, N.A., Mineral Wells; First Financial Bank, N.A., San Angelo; First Financial Bank, N.A., Southlake, Bridgeport, Boyd, Decatur, Keller and Trophy Club; First Financial Bank, N.A., Stephenville, Granbury, Glen Rose and Acton; First Financial Bank, N.A., Sweetwater, Roby, Trent and Merkel; and First Financial Bank, N.A., Weatherford, Willow Park, Aledo and Brock. The Company also operates First Financial Trust & Asset Management Company, N.A., with six locations and First Technology Services, Inc., a technology operating company.

The Company is listed on The NASDAQ Global Select Market under the trading symbol FFIN. For more information about First Financial Bankshares, please visit our Web site at http://www.ffin.com.

*****

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. Except as otherwise stated in this news announcement, the Company does not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.

FIRST FINANCIAL BANKSHARES, INC.
CONSOLIDATED FINANCIAL SUMMARY (UNAUDITED)
(In thousands, except share and per share data)

	September 30,
	2009			2008
ASSETS:
Cash and due from banks	$	113,210		$	116,989
Fed funds sold		38,045			55,675
Investment securities		1,323,451			1,253,945
Loans		1,454,397			1,567,727
Allowance for loan losses		(25,532	)		(20,048	)
Net loans		1,428,865			1,547,679
Premises and equipment		63,659			65,531
Goodwill		62,112			62,112
Other intangible assets		1,239			2,178
Other assets		45,612			44,479
Total assets	$	3,076,193		$	3,148,588
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	719,266		$	769,115
Interest-bearing deposits		1,739,637			1,794,437
Total deposits		2,458,903			2,563,552
Short-term borrowings		160,401			196,839
Other liabilities		41,355			37,780
Shareholders’ equity		415,534			350,417
Total liabilities and shareholders’ equity	$	3,076,193		$	3,148,588

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
INCOME STATEMENTS
Interest income	$	36,598		$	39,218		$	110,028		$	119,915
Interest expense		4,015			7,819			13,401			28,666
Net interest income		32,583			31,399			96,627			91,249
Provision for loan losses		3,706			1,765			7,054			4,274
Net interest income after provision for loan losses		28,877			29,634			89,573			86,975
Noninterest income		12,879			12,291			36,536			38,058
Noninterest expense		23,018			23,385			70,325			69,055
Net income before income taxes		18,738			18,540			55,784			55,978
Income tax expense		4,752			5,179			14,528			15,853
Net income	$	13,986		$	13,361		$	41,256		$	40,125
PER COMMON SHARE DATA
Net income — basic	$	0.67		$	0.64		$	1.98		$	1.93
Net income — diluted		0.67			0.64			1.98			1.93
Cash dividends		0.34			0.34			1.02			1.00
Book value								19.96			16.85
Market value								49.46			51.88
Shares outstanding — end of period		20,822,396			20,793,647			20,822,396			20,793,647
Average outstanding shares — basic		20,819,398			20,793,197			20,810,112			20,784,711
Average outstanding shares — diluted		20,844,567			20,853,539			20,830,932			20,831,128
PERFORMANCE RATIOS
Return on average assets		1.81	%		1.74	%		1.78	%		1.77	%
Return on average equity		13.99			15.31			14.18			15.42
Net interest margin (tax equivalent)		4.92			4.73			4.85			4.64
Efficiency ratio		47.92			51.42			50.08			51.41

FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)

	Quarter Ended
	2009									2008
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	23,247		$	22,652		$	21,529		$	20,048		$	18,677
Loans charged off		(1,662	)		(1,225	)		(893	)		(2,406	)		(647	)
Loan recoveries		241			232			255			204			253
Net charge-offs		(1,421	)		(993	)		(638	)		(2,202	)		(394	)
Provision for loan losses		3,706			1,588			1,761			3,683			1,765
Balance at end of period	$	25,532		$	23,247		$	22,652		$	21,529		$	20,048
Allowance for loan losses / period-end loans		1.76	%		1.57	%		1.53	%		1.37	%		1.28	%
Allowance for loan losses / nonperforming loans		174.4			225.4			233.5			216.8			245.7
Net charge-offs / average loans (annualized)		0.38			0.27			0.17			0.56			0.10
NONPERFORMING ASSETS
Nonaccrual loans	$	14,585		$	10,242		$	9,606		$	9,893		$	7,947
Accruing loans 90 days past due		56			72			94			36			213
Total nonperforming loans		14,641			10,314			9,700			9,929			8,160
Foreclosed assets		4,367			3,755			4,415			2,602			2,613
Total nonperforming assets	$	19,008		$	14,069		$	14,115		$	12,531		$	10,773
As a % of loans and foreclosed assets		1.30	%		0.95	%		0.95	%		0.80	%		0.69	%
As a % of end of period total assets		0.62			0.46			0.45			0.39			0.34
CAPITAL RATIOS
Tier 1 Risk-based		18.12	%		17.36	%		16.80	%		15.89	%		15.41	%
Total Risk-based		19.37			18.61			18.05			17.04			16.49
Tier 1 Leverage		10.83			10.53			10.01			9.68			9.63
Equity to assets		13.51			12.64			12.22			11.48			11.13

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2009			2008		2009			2008
NONINTEREST INCOME
Gain on sale of student loans, net	$	273		$	3	$	889		$	1,717
Gain on securities transactions, net		897			146		1,645			705
Trust fees		2,328			2,501		6,570			7,230
Service charges on deposits		5,732			5,809		16,294			17,005
Real estate mortgage fees		731			649		2,177			2,018
Net gain (loss) on sale of foreclosed assets		(128	)		27		(187	)		116
ATM and credit card fees		2,427			2,327		7,063			6,623
Other noninterest income		619			829		2,085			2,644
Total Noninterest Income	$	12,879		$	12,291	$	36,536		$	38,058
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	11,512		$	11,529	$	34,695		$	34,588
Profit sharing expense		689			923		1,739			2,957
Net occupancy expense		1,599			1,826		4,785			5,069
Equipment expense		1,920			1,891		5,828			5,603
Printing, stationery and supplies		508			482		1,406			1,433
ATM and credit card expenses		810			1,155		2,462			3,271
Audit fees		292			288		840			884
Legal, tax and professional fees		778			734		2,470			2,209
FDIC Insurance premiums		818			162		4,074			438
Correspondent bank service charges		204			303		839			868
Advertising and public relations		661			638		1,783			1,935
Amortization of intangible assets		214			302		652			917
Other noninterest expense		3,013			3,152		8,752			8,883
Total Noninterest Expense	$	23,018		$	23,385	$	70,325		$	69,055
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,570		$	1,786	$	7,256		$	5,028

FIRST FINANCIAL BANKSHARES, INC.
SELECTED FINANCIAL DATA (UNAUDITED)
(In thousands)

	Three Months Ended
	September 30, 2009
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	46,649	$	23		0.20	%
Interest-bearing deposits in nonaffiliated banks		18,189		73		1.59	%
Taxable securities		855,409		9,155		4.28	%
Tax exempt securities		450,508		7,060		6.27	%
Loans		1,465,423		22,857		6.19	%
Total interest-earning assets		2,836,178		39,168		5.48	%
Noninterest-earning assets		235,596
Total assets	$	3,071,774
Interest-bearing liabilities:
Deposits	$	1,730,708	$	3,836		0.88	%
Fed funds purchased and other short term borrowings		171,621		179		0.41	%
Total interest-bearing liabilities		1,902,329		4,015		0.84	%
Noninterest-bearing liabilities		772,768
Shareholders’ equity		396,677
Total liabilities and shareholders’ equity	$	3,071,774
Net interest income and margin (tax equivalent)			$	35,153		4.92	%

	Nine Months Ended
	September 30, 2009
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	37,578	$	66		0.24	%
Interest-bearing deposits in nonaffiliated banks		11,531		143		1.65	%
Taxable securities		881,726		28,102		4.25	%
Tax exempt securities		426,621		19,958		6.24	%
Loans		1,504,400		69,015		6.13	%
Total interest-earning assets		2,861,856		117,284		5.48	%
Noninterest-earning assets		244,961
Total assets	$	3,106,817
Interest-bearing liabilities:
Deposits	$	1,744,336	$	12,768		0.98	%
Fed funds purchased and other short term borrowings		191,376		633		0.44	%
Total interest-bearing liabilities		1,935,712		13,401		0.93	%
Noninterest-bearing liabilities		782,184
Shareholders’ equity		388,921
Total liabilities and shareholders’ equity	$	3,106,817
Net interest income and margin (tax equivalent)			$	103,883		4.85	%