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): July 22, 2010

FIRST FINANCIAL BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas	0-7674	75-0944023
(State or other Jurisdiction	(Commission File No.)	(IRS Employer
of Incorporation)		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 June 30, 2010 of First Financial Bankshares, Inc.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1 Press Release dated July 22, 2010

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: July 22, 2010	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
SECOND QUARTER EARNINGS RESULTS

ABILENE, Texas, July 22, 2010 – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the second quarter of 2010 of $14.20 million compared with earnings of $13.57 million in the same quarter last year. Basic earnings per share were $0.68 for the second quarter of 2010 compared with $0.65 in the second quarter of 2009.

Net interest income for the second quarter of 2010 increased 4.16 percent to $33.46 million compared with $32.12 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.69 percent for the second quarter of 2010 compared with 4.88 percent in the same period a year ago and unchanged from the first quarter of 2010.

The provision for loan losses was $2.97 million in the second quarter of 2010, up from $1.59 million in the same quarter last year and $2.01 million in the quarter ended March 31, 2010. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.48 percent at June 30, 2010, down slightly from 1.50 percent at March 31, 2010. The increase in the provision for loan losses is reflective of concerns about the economy, a higher level of nonperforming assets compared with a year ago and an increase in net charge-offs. For the second quarter of 2010, net charge-offs totaled $2.8 million of which $1.9 million was related to one commercial customer.

Noninterest income in the second quarter of 2010 was $12.57 million compared with $12.12 million in the same quarter a year earlier. Trust fees increased to $2.67 million in the second quarter of 2010 compared with $2.13 million in the same quarter last year due to higher oil and gas prices and an increase in assets under management. Service charges on deposit accounts decreased to $5.29 million during the second quarter of 2010 compared with $5.42 million for the same quarter a year ago.

Noninterest expense decreased in the second quarter of 2010 to $23.95 million from $24.36 million in the same quarter last year, primarily from FDIC premiums. FDIC insurance premiums in the second quarter of 2010 totaled $990,000 compared to $2.31 million, which included a $1.42 million special assessment, in the same quarter of 2009. The Company’s efficiency ratio in the second quarter of 2010 was 49.21 percent compared with 52.17 percent in the same quarter a year ago.

For the first half of 2010, net income increased 2.37 percent to $27.92 million from $27.27 million a year ago. Basic earnings per share rose to $1.34 in the first half of 2010 from $1.31 in the same period last year. Net interest income increased 3.22 percent in the first half of 2010 to $66.10 million from $64.04 million a year ago. The provision for loan losses totaled $4.98 million compared to $3.35 million in the first half of the

previous year. Noninterest income was $23.68 million compared with $23.66 million in the first half of 2009. Noninterest expense was down slightly at $47.29 million in the first half of 2010 compared with $47.31 million a year ago.

As of June 30, 2010, consolidated assets for the Company increased 8.39 percent to $3.34 billion compared with $3.08 billion a year ago. Loans totaled $1.52 billion at quarter end compared with loans of $1.48 billion a year ago. Total deposits were $2.71 billion as of June 30, 2010, compared with $2.47 billion a year earlier. Shareholders’ equity rose to $431.00 million as of June 30, 2010, compared with $388.86 million the prior year.

“With the exception of a large charge-off related to one of our commercial customers, this was an excellent quarter for us, especially in light of the significant challenges to banking from the sluggish economy, increased government regulation, a slowing real estate market and extraordinarily low interest rates,” said F. Scott Dueser, Chairman, President and CEO. “We addressed the problem loan quickly and continue to aggressively address our nonperforming assets and manage our expenses while being committed to the highest service levels for our customers and shareholders.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 50 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Albany, Clyde, Moran and Odessa; 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, Brock and Fort Worth. 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 website 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)

	June 30,
	2010			2009
ASSETS:
Cash and due from banks	$	100,460		$	102,340
Interest bearing deposits in banks		139,521			17,252
Fed funds sold		225			26,375
Investment securities		1,413,555			1,301,251
Loans		1,519,672			1,479,122
Allowance for loan losses		(28,954	)		(23,247	)
Net loans		1,490,718			1,455,875
Premises and equipment		66,888			63,807
Goodwill		62,112			62,112
Other intangible assets		728			1,453
Other assets		61,388			47,070
Total assets	$	3,335,595		$	3,077,535
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	782,166		$	741,242
Interest-bearing deposits		1,924,062			1,731,273
Total deposits		2,706,228			2,472,515
Short-term borrowings		159,480			176,673
Other liabilities		38,889			39,488
Shareholders’ equity		430,998			388,859
Total liabilities and shareholders’ equity	$	3,335,595		$	3,077,535

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
INCOME STATEMENTS
Interest income	$	37,054		$	36,468		$	73,399		$	73,430
Interest expense		3,596			4,347			7,295			9,386
Net interest income		33,458			32,121			66,104			64,044
Provision for loan losses		2,973			1,588			4,983			3,348
Net interest income after provision for loan losses		30,485			30,533			61,121			60,696
Noninterest income		12,570			12,120			23,680			23,656
Noninterest expense		23,951			24,358			47,289			47,305
Net income before income taxes		19,104			18,295			37,512			37,047
Income tax expense		4,906			4,729			9,597			9,777
Net income	$	14,198		$	13,566		$	27,915		$	27,270
PER COMMON SHARE DATA
Net income — basic	$	0.68		$	0.65		$	1.34		$	1.31
Net income — diluted		0.68			0.65			1.34			1.31
Cash dividends		0.34			0.34			0.68			0.68
Book value								20.67			18.68
Market value								48.09			50.36
Shares outstanding — end of period		20,848,421			20,814,760			20,848,421			20,814,760
Average outstanding shares — basic		20,847,735			20,809,061			20,841,389			20,805,392
Average outstanding shares — diluted		20,869,138			20,830,965			20,869,403			20,821,782
PERFORMANCE RATIOS
Return on average assets		1.70	%		1.77	%		1.69	%		1.76	%
Return on average equity		13.37			13.98			13.33			14.28
Net interest margin (tax equivalent)		4.69			4.88			4.69			4.82
Efficiency ratio		49.21			52.17			49.77			51.21

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

	Quarter Ended
	2010						2009
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	28,750		$	27,612		$	25,532		$	23,247		$	22,652
Loans charged off		(2,970	)		(1,059	)		(2,430	)		(1,662	)		(1,225	)
Loan recoveries		201			187			145			241			232
Net charge-offs		(2,769	)		(872	)		(2,285	)		(1,421	)		(993	)
Provision for loan losses		2,973			2,010			4,365			3,706			1,588
Balance at end of period	$	28,954		$	28,750		$	27,612		$	25,532		$	23,247
Allowance for loan losses / period-end loans		1.91	%		1.92	%		1.82	%		1.76	%		1.57	%
Allowance for loan losses / nonperforming loans		203.3			159.1			148.8			174.4			225.4
Net charge-offs / average loans (annualized)		0.73			0.24			0.62			0.38			0.27
NONPERFORMING ASSETS
Nonaccrual loans	$	14,240		$	17,775		$	18,540		$	14,585		$	10,242
Accruing loans 90 days past due		1			290			15			56			72
Total nonperforming loans		14,241			18,065			18,555			14,641			10,314
Foreclosed assets		8,306			4,444			3,533			4,367			3,755
Total nonperforming assets	$	22,547		$	22,509		$	22,088		$	19,008		$	14,069
As a % of loans and foreclosed assets		1.48	%		1.50	%		1.46	%		1.30	%		0.95	%
As a % of end of period total assets		0.68			0.67			0.67			0.62			0.46
CAPITAL RATIOS
Tier 1 Risk-based		18.22	%		18.02	%		17.73	%		18.12	%		17.36	%
Total Risk-based		19.48			19.28			18.99			19.37			18.61
Tier 1 Leverage		10.63			10.50			10.69			10.83			10.53
Equity to assets		12.92			12.64			12.68			13.51			12.64

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
NONINTEREST INCOME
Gain (loss) on sale of student loans, net	$	—	$	—	$	—	$	616
Gain on securities transactions, net		72		498		72		747
Trust fees		2,672		2,126		5,198		4,242
Service charges on deposits		5,293		5,421		10,152		10,562
Real estate mortgage fees		857		858		1,417		1,446
Net gain (loss) on sale of foreclosed assets		59		99		70		(59	)
ATM and credit card fees		2,830		2,427		5,341		4,636
Other noninterest income		787		691		1,430		1,466
Total Noninterest Income	$	12,570	$	12,120	$	23,680	$	23,656
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	11,762	$	11,686	$	23,679	$	23,183
Profit sharing expense		1,079		555		1,819		1,050
Net occupancy expense		1,561		1,567		3,139		3,187
Equipment expense		1,853		1,968		3,690		3,908
Printing, stationery and supplies		428		465		857		897
ATM and credit card expenses		866		734		1,751		1,651
Audit fees		220		262		497		547
Legal, tax and professional fees		874		763		1,755		1,693
FDIC Insurance premiums		990		2,305		1,978		3,256
Correspondent bank service charges		181		323		372		635
Advertising and public relations		785		590		1,485		1,122
Amortization of intangible assets		153		216		312		438
Other noninterest expense		3,199		2,924		5,955		5,738
Total Noninterest Expense	$	23,951	$	24,358	$	47,289	$	47,305
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,642	$	2,450	$	5,233	$	4,686

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

	Three Months Ended
	June 30, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	3,813	$	3		0.34	%
Interest-bearing deposits in nonaffiliated banks		163,430		346		0.85	%
Taxable securities		950,304		9,237		3.89	%
Tax exempt securities		459,528		7,048		6.13	%
Loans		1,511,587		23,062		6.12	%
Total interest-earning assets		3,088,662		39,696		5.16	%
Noninterest-earning assets		251,718
Total assets	$	3,340,380
Interest-bearing liabilities:
Deposits	$	1,902,497	$	3,463		0.73	%
Fed funds purchased and other short term borrowings		177,435		133		0.30	%
Total interest-bearing liabilities		2,079,932		3,596		0.69	%
Noninterest-bearing liabilities		834,442
Shareholders’ equity		426,006
Total liabilities and shareholders’ equity	$	3,340,380
Net interest income and margin (tax equivalent)			$	36,100		4.69	%

	Six Months Ended
	June 30, 2010
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest-earning assets:
Fed funds sold	$	3,229	$	4		0.27	%
Interest-bearing deposits in nonaffiliated banks		192,405		717		0.75	%
Taxable securities		913,613		18,203		3.98	%
Tax exempt securities		456,707		14,026		6.14	%
Loans		1,502,504		45,682		6.13	%
Total interest-earning assets		3,068,458		78,632		5.17	%
Noninterest-earning assets		255,339
Total assets	$	3,323,797
Interest-bearing liabilities:
Deposits	$	1,898,314	$	6,998		0.74	%
Fed funds purchased and other short term borrowings		175,609		297		0.34	%
Total interest-bearing liabilities		2,073,923		7,295		0.71	%
Noninterest-bearing liabilities		827,724
Shareholders’ equity		422,150
Total liabilities and shareholders’ equity	$	3,323,797
Net interest income and margin (tax equivalent)			$	71,337		4.69	%