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 18, 2007

FIRST FINANCIAL BANKSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Texas	0-7674	75-0944023
(State or other Jurisdiction of Incorporation)	(Commission File No.)	(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, 2007 of First Financial Bankshares, Inc.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1 Press Release dated October 18, 2007

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 18, 2007	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 OF $12.25 MILLION OR $0.59 PER SHARE

ABILENE, Texas, October 18, 2007 — First Financial Bankshares, Inc. (NASDAQ: FFIN) today announced earnings of $12.25 million for the third quarter of 2007, an increase of 7.4 percent compared with earnings of $11.40 million in the same quarter last year. Basic earnings per share were $0.59 compared with $0.55 in the same period last year.

“We continued to perform favorably for our shareholders and customers in the third quarter. We experienced improved results in loan growth, real estate mortgage activity, trust fees and new accounts,” said F. Scott Dueser, President and Chief Executive Officer. “We are pleased with our results for the quarter and year-to-date, especially in light of the very tight interest rate margin environment.”

Net interest income for the third quarter of 2007 increased 3.9 percent to $27.74 million compared with $26.70 million in the same quarter last year. The provision for loan losses was $475,000 in the third quarter of 2007, down from $1.09 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.45 percent for the third quarter of 2007 compared with 4.49 percent in the same period a year ago but improved from 4.38 percent in the second quarter of 2007.

Noninterest income in the third quarter of 2007 was $11.99 million compared with $11.19 million in the same quarter last year. Trust fees increased 14.1 percent in the third quarter of 2007 to $2.16 million compared with $1.89 million in the same quarter last year due to continued growth of trust assets managed. Service charges on deposit accounts increased 4.0 percent in the third quarter of 2007 to $6.07 million compared with $5.84 million a year ago, reflecting continued growth in net new accounts. Real estate mortgage fees increased 32.4 percent to $1.02 million from $771,000 in the same quarter last year due to expansion of mortgage operations to more subsidiary bank locations. ATM and credit card fees increased 22.9 percent to $1.94 million versus $1.58 million a year ago, indicative of continued increased use of debit cards and the growth in net new accounts.

Noninterest expense increased 6.6 percent in the third quarter of 2007 to $21.98 million from $20.62 million in the same quarter last year. The largest component of this increase is salaries and employee benefits from increased annual salaries, healthcare costs and profit sharing. The Company’s efficiency ratio in the third quarter of 2007 stood at 53.53 percent compared with 52.80 percent in the same quarter a year ago.

For the first nine months of 2007, net income was $36.98 million, up 7.8 percent compared with $34.32 million a year ago. Basic earnings per share for the first nine months of 2007 were $1.78 compared with $1.66 in the same period last year. Net interest income increased 3.4 percent in the first nine months of 2007 to $81.56 million from $78.90 million in the same period last year. Noninterest income was $35.88 million in the first nine months of 2007, up 6.7 percent from $33.62 million a year ago.

As of September 30, 2007, consolidated assets for the Company totaled $2.89 billion compared with $2.71 billion a year ago. Loans totaled $1.46 billion at quarter end, compared with loans of $1.34 billion a year ago, an increase of 9.0%. Total deposits as of September 30, 2007, stood at $2.38 billion, up from $2.28 billion a year earlier. Non interest bearing deposits increased $25.9 million from a year ago. In addition, repurchase agreement balances with customers totaled $161.6 million at September 30, 2007 compared to $100.2 million at September 30, 2006, as our treasury management services continue to grow. Shareholders’ equity rose to $322.0 million as of September 30, 2007, compared with $293.1 million the prior year.

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates ten separately chartered banks with 45 locations in Texas. The bank subsidiaries are First Financial Bank, N.A., Abilene, Clyde, Moran and Albany; First Financial Bank, N.A., Eastland, Ranger and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado and Midlothian; Hereford State Bank, Hereford; First Financial Bank, N.A., Mineral Wells; San Angelo National Bank, San Angelo; First Financial Bank, N.A., Southlake, Trophy Club, Keller, Bridgeport, Decatur and Boyd; First Financial Bank, N.A., Stephenville, Granbury and Glen Rose; First National Bank, Sweetwater, Roby and Trent; and Weatherford National Bank, Weatherford, Willow Park and Aledo. The Company also operates First Financial Trust & Asset Management Company, N.A., with five 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,
	2007			2006
ASSETS:
Cash and due from banks	$	107,597		$	105,076
Fed funds sold		49,955			13,700
Investment securities		1,130,782			1,106,665
Loans		1,457,137			1,337,315
Allowance for loan losses		(16,728	)		(16,498	)
Net loans		1,440,409			1,320,817
Premises and equipment		61,431			61,066
Goodwill		62,113			62,113
Other intangible assets		3,455			5,022
Other assets		38,749			36,878
Total assets	$	2,894,491		$	2,711,337
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	657,861		$	631,958
Interest-bearing deposits		1,724,740			1,648,577
Total deposits		2,382,601			2,280,535
Short-term borrowings		168,676			118,045
Other liabilities		21,212			19,634
Shareholders’ equity		322,002			293,123
Total liabilities and shareholders’ equity	$	2,894,491		$	2,711,337

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
INCOME STATEMENTS	2007			2006			2007			2006
Interest income	$	42,555		$	39,388		$	125,887		$	113,930
Interest expense		14,816			12,685			44,328			35,034
Net interest income		27,739			26,703			81,559			78,896
Provision for loan losses		475			1,091			955			1,814
Net interest income after provision for loan losses		27,264			25,612			80,604			77,082
Noninterest income		11,991			11,188			35,883			33,621
Noninterest expense		21,982			20,617			64,097			61,899
Net income before income taxes		17,273			16,183			52,390			48,804
Income tax expense		5,022			4,778			15,407			14,484
Net income	$	12,251		$	11,405		$	36,983		$	34,320
PER COMMON SHARE DATA
Net income — basic	$	0.59		$	0.55		$	1.78		$	1.66
Net income — diluted		0.59			0.55			1.77			1.65
Cash dividends		0.32			0.30			0.94			0.88
Book value								15.51			14.14
Market value								40.18			38.15
Shares outstanding — end of period		20,764,492			20,731,455			20,764,492			20,731,455
Average outstanding shares — basic		20,761,799			20,729,287			20,755,331			20,722,310
Average outstanding shares — diluted		20,891,357			20,788,068			20,879,709			20,780,598
PERFORMANCE RATIOS
Return on average assets		1.70	%		1.67	%		1.73	%		1.68	%
Return on average equity		15.61			15.93			16.10			16.36
Net interest margin (tax equivalent)		4.45			4.49			4.40			4.47
Efficiency ratio		53.53			52.80			52.85			53.36

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

	Quarter Ended
	2007									2006
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	16,425		$	16,458		$	16,201		$	16,498		$	15,473
Loans charged off		(342	)		(505	)		(147	)		(788	)		(272	)
Loan recoveries		170			234			162			244			206
Net (charge-offs) recoveries		(172	)		(271	)		15			(544	)		(66	)
Provision for loan losses		475			238			242			247			1,091
Balance at end of period	$	16,728		$	16,425		$	16,458		$	16,201		$	16,498
Allowance for loan losses / period-end loans		1.15	%		1.18	%		1.17	%		1.18	%		1.23	%
Allowance for loan losses / nonperforming loans		395.6			387.4			226.5			442.9			401.6
Net charge-offs (recoveries) / average loans (annualized)		0.05			0.08			0.00			0.16			0.02
NONPERFORMING ASSETS
Nonaccrual loans	$	4,023		$	4,179		$	6,338		$	3,529		$	3,907
Accruing loans 90 days past due		206			61			928			129			201
Total nonperforming loans		4,229			4,240			7,266			3,658			4,108
Foreclosed assets		2,594			2,174			434			453			543
Total nonperforming assets	$	6,823		$	6,414		$	7,700		$	4,111		$	4,651
As a % of loans and foreclosed assets		0.47	%		0.46	%		0.55	%		0.30	%		0.35	%
CAPITAL RATIOS
Tier 1 Risk-based		14.81	%		14.85	%		14.71	%		14.35	%		14.72	%
Total Risk-based		15.76			15.81			15.69			15.32			15.75
Tier 1 Leverage		9.31			9.05			8.89			8.87			8.91
Equity to assets		11.12			10.75			10.74			10.56			10.81

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
NONINTEREST INCOME	2007			2006		2007		2006
Gain on sale of student loans, net	$	36		$	180	$	1,816	$	2,051
Gain (loss) on securities transactions, net		(5	)		60		80		60
Trust fees		2,158			1,891		6,530		5,572
Service charges on deposits		6,074			5,843		16,766		16,789
Real estate mortgage fees		1,022			771		2,624		1,780
Net gain (loss) on sale of foreclosed assets		13			—		48		(13	)
ATM and credit card fees		1,938			1,577		5,516		4,559
Other noninterest income		755			866		2,503		2,823
Total Noninterest Income	$	11,991		$	11,188	$	35,883	$	33,621
NONINTEREST EXPENSE
Salaries and employee benefits	$	11,723		$	10,964	$	34,610	$	33,389
Net occupancy expense		1,504			1,508		4,358		4,498
Equipment expense		1,848			1,786		5,406		5,281
Printing, stationery and supplies		552			536		1,544		1,548
ATM and credit card expenses		990			865		2,881		2,538
Audit fees		230			200		674		638
Legal, tax and professional fees		689			567		1,992		1,728
Correspondent bank service charges		269			384		888		986
Advertising and public relations		638			586		1,801		1,768
Amortization of intangible assets		375			448		1,135		1,059
Other noninterest expense		3,164			2,773		8,808		8,466
Total Noninterest Expense	$	21,982		$	20,617	$	64,097	$	61,899
TAX EQUIVALENT YIELD ADJUSTMENT	$	1,336		$	1,156	$	3,847	$	3,495

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

	Three Months Ended
	September 30, 2007
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	49,098	$	638		5.16	%
Interest bearing deposits in nonaffiliated banks		1,487		18		4.84	%
Taxable securities		833,055		9,842		4.73	%
Tax exempt securities		290,425		4,399		6.06	%
Loans		1,422,602		28,994		8.09	%
Total interest earning assets		2,596,667		43,891		6.71	%
Noninterest earning assets		255,805
Total assets	$	2,852,472
Interest bearing liabilities:
Deposits	$	1,702,599	$	13,028		3.04	%
Fed funds purchased and other short term borrowings		170,866		1,788		4.15	%
Total interest bearing liabilities		1,873,465		14,816		3.14	%
Noninterest bearing liabilities		667,540
Shareholders’ equity		311,467
Total liabilities and shareholders’ equity	$	2,852,472
Net interest income and margin (tax equivalent)			$	29,075		4.45	%

	Nine Months Ended
	September 30, 2007
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	65,486	$	2,498		5.10	%
Interest bearing deposits in nonaffiliated banks		4,539		175		5.16	%
Taxable securities		837,694		29,254		4.66	%
Tax exempt securities		281,907		12,719		6.02	%
Loans		1,407,489		85,088		8.08	%
Total interest earning assets		2,597,115		129,734		6.69	%
Noninterest earning assets		256,343
Total assets	$	2,853,458
Interest bearing liabilities:
Deposits	$	1,731,538	$	39,325		3.04	%
Fed funds purchased and other short term borrowings		151,095		5,003		4.43	%
Total interest bearing liabilities		1,882,633		44,328		3.15	%
Noninterest bearing liabilities		663,615
Shareholders’ equity		307,210
Total liabilities and shareholders’ equity	$	2,853,458
Net interest income and margin (tax equivalent)			$	85,406		4.40	%