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): January 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

     On January 22, 2009, First Financial Bankshares, Inc. issued a press release reporting 2008 fourth quarter results of operations. A copy of the press release is attached as exhibit 99.1 to this Form 8-K.

     The information disclosed in this Item 2.02 shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1 Press Release dated January 22, 2009

The Press Release disclosed in the Item 9.01 as Exhibit 99.1 shall be considered “furnished” but not “filed” for purposes of the Securities Exchange Act of 1934, as amended.

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: January 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
FOURTH QUARTER EARNINGS RESULTS AND 22^nd CONSECUTIVE YEAR
OF EARNINGS GROWTH

ABILENE, Texas, January 22, 2009 — First Financial Bankshares, Inc. today reported earnings for the fourth quarter of 2008 of $13.04 million, up 4.3 percent from $12.51 million in the same quarter last year. Basic earnings per share were $0.63 for the fourth quarter, up 5.0 percent from $0.60 for the same quarter last year.

Net interest income for the fourth quarter of 2008 increased 11.6 percent to $32.65 million compared with $29.25 million in the same quarter last year. The net interest margin, on a taxable equivalent basis, was 4.77 percent for the fourth quarter of 2008 compared with 4.50 percent in the same period a year ago and 4.73 percent for the quarter ended September 30, 2008.

Noninterest income in the fourth quarter of 2008 was $11.40 million compared with $12.39 million in the same quarter a year earlier. Trust fees were $2.21 million, relatively unchanged from the same quarter a year ago. Service charges on deposit accounts were $5.59 million compared with $6.15 million a year ago. Real estate mortgage fees decreased to $518,000 from $723,000 in the same quarter last year. ATM and debit card fees increased 13.8 percent to $2.28 million from $2.01 million a year ago.

Noninterest expense declined slightly in the fourth quarter to $22.53 million from $22.73 million in the same quarter last year. The Company’s efficiency ratio in the fourth quarter improved to 48.88 percent compared with 52.78 percent in the same quarter a year ago and 51.42 percent in the quarter ended September 30, 2008.

The provision for loan losses increased to $3.68 million in the fourth quarter of 2008 from $1.38 million in the same quarter last year and $1.77 million in the third quarter of this year. This increase is due to the Company’s concern for a slowing real estate market and national economy and an increased level of nonperforming assets.

The Company reported its 22^nd consecutive year of increased earnings. Net income for the year increased 7.4 percent to $53.16 million from $49.49 million a year ago. Basic earnings per share rose 7.6 percent to $2.56 for 2008 from $2.38 the previous year. Net interest income increased 11.8 percent for the year to $123.90 million compared with $110.81 million a year ago. Noninterest income was $49.45 million for 2008, up 2.4 percent from $48.27 million a year ago.

As of December 31, 2008, consolidated assets for the Company totaled $3.21 billion compared with $3.07 billion a year ago. Total loans were $1.57 billion at yearend, compared with loans of $1.53 billion a year ago. Total deposits were $2.58 billion as of December 31, 2008, compared with $2.55 billion a year earlier. Noninterest-bearing deposits grew $57.90 million from a year ago. Shareholders’ equity rose to $368.78 million from $335.50 million a year ago.

“We are pleased to report to our shareholders and customers another quarter and another year of earnings growth,” said F. Scott Dueser, President and Chief Executive Officer. “Over the past year, our bank presidents have done an excellent job of managing their net interest margins as well as improving their efficiency ratios. With the national economy slowing and the large increase in FDIC insurance premiums budgeted for 2009, we will need to continue to manage our margins, improve efficiencies and control credit quality to maximize shareholder value.”

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; Hereford State Bank, Hereford; First Financial Bank, N.A., Mineral Wells; San Angelo National Bank, 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 Weatherford National Bank, Weatherford, Willow Park, Aledo and Brock. 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)

	December 31,
	2008			2007
ASSETS:
Cash and due from banks	$	141,228		$	165,438
Fed funds sold		27,660			99,450
Investment securities		1,318,406			1,120,912
Loans		1,566,143			1,528,020
Allowance for loan losses		(21,529	)		(17,462	)
Net loans		1,544,614			1,510,558
Premises and equipment		65,675			61,670
Goodwill		62,112			62,112
Other intangible assets		1,891			3,095
Other assets		50,799			47,074
Total assets	$	3,212,385		$	3,070,309
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	797,077		$	739,181
Interest-bearing deposits		1,785,676			1,806,902
Total deposits		2,582,753			2,546,083
Short-term borrowings		235,598			166,266
Other liabilities		25,252			22,465
Shareholders’ equity		368,782			335,495
Total liabilities and shareholders’ equity	$	3,212,385		$	3,070,309

	Three Months Ended						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
INCOME STATEMENTS
Interest income	$	39,239		$	43,482		$	159,154		$	169,369
Interest expense		6,593			14,229			35,259			58,557
Net interest income		32,646			29,253			123,895			110,812
Provision for loan losses		3,683			1,377			7,957			2,331
Net interest income after provision for loan losses		28,963			27,876			115,938			108,481
Noninterest income		11,395			12,390			49,453			48,273
Noninterest expense		22,532			22,730			91,587			86,827
Net income before income taxes		17,826			17,536			73,804			69,927
Income tax expense		4,787			5,030			20,640			20,437
Net income	$	13,039		$	12,506		$	53,164		$	49,490
PER COMMON SHARE DATA
Net income — basic	$	0.63		$	0.60		$	2.56		$	2.38
Net income — diluted		0.62			0.60			2.55			2.38
Cash dividends		0.34			0.32			1.34			1.26
Book value								17.73			16.16
Market value								55.21			37.65
Shares outstanding — end of period		20,799,198			20,766,848			20,799,198			20,766,848
Average outstanding shares — basic		20,794,783			20,765,397			20,787,243			20,757,868
Average outstanding shares — diluted		20,863,659			20,800,214			20,841,363			20,800,110
PERFORMANCE RATIOS
Return on average assets		1.64	%		1.68	%		1.74	%		1.72	%
Return on average equity		14.79			15.25			15.27			15.87
Net interest margin (tax equivalent)		4.77			4.50			4.67			4.43
Efficiency ratio		48.88			52.78			50.76			52.83

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

	Quarter Ended
	2008												2007
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	20,048		$	18,677		$	18,377		$	17,462		$	16,728
Loans charged off		(2,406	)		(647	)		(1,374	)		(288	)		(803	)
Loan recoveries		204			253			233			135			160
Net (charge-offs) recoveries		(2,202	)		(394	)		(1,141	)		(153	)		(643	)
Provision for loan losses		3,683			1,765			1,441			1,068			1,377
Balance at end of period	$	21,529		$	20,048		$	18,677		$	18,377		$	17,462
Allowance for loan losses / period-end loans		1.37	%		1.28	%		1.23	%		1.20	%		1.14	%
Allowance for loan losses / nonperforming loans		216.8			245.7			208.4			465.0			541.5
Net charge-offs (recoveries) / average loans (annualized)		0.56			0.10			0.30			0.04			0.17
NONPERFORMING ASSETS
Nonaccrual loans	$	9,893		$	7,947		$	8,963		$	3,933		$	3,189
Accruing loans 90 days past due		36			213			—			19			36
Total nonperforming loans		9,929			8,160			8,963			3,952			3,225
Foreclosed assets		2,602			2,613			1,792			1,908			1,506
Total nonperforming assets	$	12,531		$	10,773		$	10,755		$	5,860		$	4,731
As a % of loans and foreclosed assets		0.80	%		0.69	%		0.71	%		0.38	%		0.31	%
CAPITAL RATIOS
Tier 1 Risk-based		15.89	%		15.41	%		15.25	%		15.08	%		14.65	%
Total Risk-based		17.04			16.49			16.27			16.09			15.62
Tier 1 Leverage		9.68			9.63			9.55			9.34			9.23
Equity to assets		11.48			11.13			11.15			11.49			10.93

	Three Months Ended					Year Ended
	December 31,					December 31,
	2008			2007		2008		2007
NONINTEREST INCOME
Gain (loss) on sale of student loans, net	$	(42	)	$	97	$	1,675	$	1,913
Gain on securities transactions, net		346			70		1,052		150
Trust fees		2,211			2,216		9,441		8,747
Service charges on deposits		5,591			6,153		22,597		22,920
Real estate mortgage operations		518			723		2,536		3,347
Net gain (loss) on sale of foreclosed assets		(111	)		60		5		108
ATM and credit card fees		2,281			2,005		8,904		7,521
Other noninterest income		601			1,066		3,243		3,567
Total Noninterest Income	$	11,395		$	12,390	$	49,453	$	48,273
NONINTEREST EXPENSE
Salaries and employee benefits	$	11,740		$	12,334	$	49,285	$	46,944
Net occupancy expense		1,670			1,535		6,735		5,893
Equipment expense		1,941			1,815		7,547		7,220
Printing, stationery and supplies		458			459		1,891		2,004
ATM and credit card expenses		1,172			989		4,443		3,871
Audit fees		310			243		1,194		998
Legal, tax and professional fees		769			722		2,977		2,714
Correspondent bank service charges		300			265		1,169		1,153
Advertising and public relations		655			687		2,590		2,488
Amortization of intangible assets		287			360		1,204		1,494
Other noninterest expense		3,230			3,321		12,552		12,048
Total Noninterest Expense	$	22,532		$	22,730	$	91,587	$	86,827
TAX EQUIVALENT YIELD ADJUSTMENT	$	2,060		$	1,422	$	7,087	$	5,267

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

	Three Months Ended
	December 31, 2008
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	37,872	$	56		0.59	%
Interest bearing deposits in nonaffiliated banks		3,647		24		2.58	%
Taxable securities		928,521		10,171		4.38	%
Tax exempt securities		361,686		5,778		6.39	%
Loans		1,562,908		25,270		6.43	%
Total interest earning assets		2,894,634		41,299		5.68	%
Noninterest earning assets		259,187
Total assets	$	3,153,821
Interest bearing liabilities:
Deposits	$	1,789,348	$	6,219		1.38	%
Fed funds purchased and other short term borrowings		216,092		374		0.69	%
Total interest bearing liabilities		2,005,440		6,593		1.31	%
Noninterest bearing liabilities		797,758
Shareholders’ equity		350,623
Total liabilities and shareholders’ equity	$	3,153,821
Net interest income and margin (tax equivalent)			$	34,706		4.77	%

	Year Ended
	December 31, 2008
	Average		Tax Equivalent		Yield /
	Balance		Interest		Rate
Interest earning assets:
Fed funds sold	$	76,911	$	1,677		2.18	%
Interest bearing deposits in nonaffiliated banks		3,584		113		3.14	%
Taxable securities		851,099		38,286		4.50	%
Tax exempt securities		334,204		20,658		6.18	%
Loans		1,537,027		105,508		6.86	%
Total interest earning assets		2,802,825		166,242		5.93	%
Noninterest earning assets		261,204
Total assets	$	3,064,029
Interest bearing liabilities:
Deposits	$	1,775,158	$	33,110		1.87	%
Fed funds purchased and other short term borrowings		178,721		2,149		1.20	%
Total interest bearing liabilities		1,953,879		35,259		1.80	%
Noninterest bearing liabilities		761,879
Shareholders’ equity		348,271
Total liabilities and shareholders’ equity	$	3,064,029
Net interest income and margin (tax equivalent)			$	130,983		4.67	%