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 20, 2011

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:

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

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

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

¨ 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, 2011 of First Financial Bankshares, Inc.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99.1 Press Release dated October 20, 2011

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 20, 2011	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 RESULTS

ABILENE, Texas, October 20, 2011 – First Financial Bankshares, Inc. (NASDAQ: FFIN) today reported earnings for the third quarter of 2011 of $18.09 million, up 11.5 percent compared with earnings of $16.23 million in the same quarter last year. Basic earnings per share were $0.58 for the third quarter of 2011 compared with $0.52 in the same quarter a year ago. Last year’s third-quarter results included net proceeds after tax of $1.30 million from the expropriation of company-owned property in Southlake, Texas, by the Texas Department of Transportation. Excluding this extraordinary item, net income for the third quarter of 2010 would have been $14.93 million, or $0.48 per share.

Net interest income for the third quarter of 2011 increased 13.0 percent to $38.3 million compared with $33.9 million in 2010. The net interest margin, on a taxable equivalent basis, was 4.62 percent compared with 4.67 percent in the same quarter last year and 4.69 percent in the second quarter of this year.

The provision for loan losses was $1.35 million in the third quarter of 2011 compared with $1.99 million in the same quarter last year and $1.92 million in the second quarter of this year. Nonperforming assets as a percentage of loans and foreclosed assets totaled 1.60 percent at September 30, 2011, compared with 1.58 percent at June 30, 2011, and 1.45 percent at September 30, 2010.

Noninterest income in the third quarter of 2011 was $13.91 million compared with $12.93 million in the same quarter a year ago. Trust fees increased to $3.27 million in the third quarter of 2011 compared with $2.71 million in the same quarter last year. Service charges on deposit accounts decreased to $4.48 million during the third quarter of 2011 compared with $5.10 million for the same quarter a year ago, due primarily to decreased customer use of overdraft services. ATM and credit card fees increased to $3.54 million during the third quarter of 2011 from $2.92 million in the third quarter last year.

Noninterest expense increased in the third quarter of 2011 to $26.32 million from $24.71 million in the same quarter last year. The increase noted in the third quarter of 2011 compared to the same period in 2010 was primarily from additional expenses related to our Huntsville acquisition which was effective November 1, 2010. The Company’s efficiency ratio in the third quarter of 2011 was 47.48 percent compared with 47.92 percent in the same quarter last year.

For the first nine months of 2011, net income increased 15.31 percent to $50.90 million from $44.14 million a year ago. Basic earnings per share rose to $1.62 in the first nine months of 2011 from $1.41 in the same period last year. Net interest income increased 13.79 percent to $113.81 million in the first nine months of 2011 from $100.02 million a

year ago. The provision for loan losses totaled $5.40 million compared with $6.97 million in the first nine months of the previous year. Noninterest income was $38.65 million in the first nine months of 2011 compared with $36.61 million a year ago. Noninterest expense rose to $78.37 million in the first nine months of 2011 compared with $72.00 million last year primarily as a result of our Huntsville acquisition.

As of September 30, 2011, consolidated assets for the Company totaled $3.94 billion compared with $3.45 billion a year ago. Loans grew 12.43 percent and totaled $1.73 billion at quarter end compared with loans of $1.54 billion a year ago. Total deposits were $3.19 billion as of September 30, 2011, a 16.36 percent growth over $2.74 billion a year earlier. Shareholders’ equity rose to $499.20 million as of September 30, 2011, compared with $450.93 million the prior year.

“We are pleased to report another successful quarter of growth in loans and deposits and net income, despite the continued uncertainty about the national economy and increased federal regulation of the banking industry,” said F. Scott Dueser, Chairman, President and CEO. “Until we see a clear pattern of sustained economic improvement, we will continue to take a cautious stance financially, while at the same time pursuing growth in all of our business lines and remaining alert to new acquisition opportunities.”

About First Financial Bankshares

Headquartered in Abilene, Texas, First Financial Bankshares is a financial holding company that operates 11 separately chartered banks with 52 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, Cisco and Rising Star; First Financial Bank, N.A., Cleburne, Burleson, Alvarado, Midlothian and Crowley; First Financial Bank, Hereford; First Financial Bank, Huntsville; 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 seven 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 and follow us on Twitter at http://www.twitter.com/First_Financial.

*****

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,
	2011			2010
ASSETS:
Cash and due from banks	$	127,174		$	91,492
Interest-bearing deposits in banks		170,538			231,532
Fed funds sold		3,580			6,135
Investment securities		1,732,919			1,421,402
Loans		1,728,832			1,537,708
Allowance for loan losses		(34,301	)		(30,013	)
Net loans		1,694,531			1,507,695
Premises and equipment		73,443			67,387
Goodwill		71,864			62,112
Other intangible assets		342			578
Other assets		61,012			59,150
Total assets	$	3,935,403		$	3,447,483
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Noninterest-bearing deposits	$	1,020,953		$	781,228
Interest-bearing deposits		2,165,653			1,957,417
Total deposits		3,186,606			2,738,645
Short-term borrowings		180,790			178,097
Other liabilities		68,808			79,810
Shareholders’ equity		499,199			450,931
Total liabilities and shareholders’ equity	$	3,935,403		$	3,447,483

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
INCOME STATEMENTS
Interest income	$	40,164		$	37,259		$	120,132		$	110,658
Interest expense		1,854			3,345			6,320			10,641
Net interest income		38,310			33,914			113,812			100,017
Provision for loan losses		1,354			1,988			5,405			6,971
Net interest income after provision for loan losses		36,956			31,926			108,407			93,046
Noninterest income		13,911			12,926			38,646			36,608
Noninterest expense		26,320			24,706			78,367			71,995
Net income before income taxes & extraordinary items		24,547			20,146			68,686			57,659
Income tax expense		6,460			5,213			17,784			14,811
Net income before extraordinary items		18,087			14,933			50,902			42,848
Extraordinary item - expropriation of property, net of income tax		—			1,296			—			1,296
Net income	$	18,087		$	16,229		$	50,902		$	44,144
PER COMMON SHARE DATA
Net income before extraordinary item-basic	$	0.58		$	0.48		$	1.62		$	1.37
Net income before extraordinary item-diluted		0.57			0.48			1.62			1.37
Net income - basic		0.58			0.52			1.62			1.41
Net income - diluted		0.57			0.52			1.62			1.41
Cash dividends		0.24			0.23			0.71			0.68
Book value								15.87			14.42
Market value								26.16			31.33
Shares outstanding - end of period		31,452,283			31,278,228			31,452,283			31,278,228
Average outstanding shares - basic		31,451,687			31,274,853			31,440,178			31,266,387
Average outstanding shares - diluted		31,481,092			31,281,734			31,488,129			31,295,903
PERFORMANCE RATIOS
Return on average assets		1.87	%		1.91	%		1.79	%		1.77	%
Return on average equity		14.79			14.62			14.65			13.78
Net interest margin (tax equivalent)		4.62			4.67			4.68			4.68
Efficiency ratio		47.48			47.92			48.39			49.12

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Quarter Ended
	2011									2010
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	33,406		$	32,501		$	31,106		$	30,013		$	28,954
Loans charged off		(722	)		(1,396	)		(1,010	)		(1,240	)		(1,178	)
Loan recoveries		263			377			278			341			249
Net charge-offs		(459	)		(1,019	)		(732	)		(899	)		(929	)
Provision for loan losses		1,354			1,924			2,127			1,992			1,988
Balance at end of period	$	34,301		$	33,406		$	32,501		$	31,106		$	30,013
Allowance for loan losses / period-end loans		1.98	%		1.94	%		1.93	%		1.84	%		1.95	%
Allowance for loan losses / nonperforming loans		194.3			179.6			210.6			176.3			211.7
Net charge-offs / average loans (annualized)		0.11			0.24			0.18			0.22			0.24
NONPERFORMING ASSETS
Nonaccrual loans	$	17,598		$	18,599		$	15,411		$	15,445		$	14,110
Accruing loans 90 days past due		52			6			23			2,196			69
Total nonperforming loans		17,650			18,605			15,434			17,641			14,179
Foreclosed assets		10,254			8,778			8,872			8,309			8,217
Total nonperforming assets	$	27,904		$	27,383		$	24,306		$	25,950		$	22,396
As a % of loans and foreclosed assets		1.60	%		1.58	%		1.44	%		1.53	%		1.45	%
As a % of end of period total assets		0.71			0.71			0.63			0.69			0.65
CAPITAL RATIOS
Tier 1 Risk-based		17.89	%		17.97	%		17.60	%		17.01	%		18.19	%
Total Risk-based		19.14			19.22			18.86			18.26			19.45
Tier 1 Leverage		10.45			10.22			10.03			10.28			10.89
Equity to assets		12.68			12.44			11.92			11.70			13.08

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
NONINTEREST INCOME
Gain on securities transactions, net	$	67		7	$	328			79
Trust fees		3,265		2,706		9,520			7,904
Service charges on deposits		4,482		5,100		13,376			15,252
Real estate mortgage fees		1,056		1,154		2,930			2,571
Net gain (loss) on sale of foreclosed assets		18		313		(1,156	)		383
ATM, interchange and credit card fees		3,544		2,915		10,036			8,255
Other noninterest income		1,479		731		3,612			2,164
Total Noninterest Income	$	13,911	$	12,926	$	38,646		$	36,608
NONINTEREST EXPENSE
Salaries and employee benefits, excluding profit sharing	$	12,790	$	11,978	$	38,816		$	35,657
Profit sharing expense		1,318		1,148		3,535			2,967
Net occupancy expense		1,823		1,654		5,154			4,793
Equipment expense		1,970		1,851		5,792			5,542
Printing, stationery and supplies		443		425		1,359			1,283
ATM and credit card expenses		1,276		985		3,607			2,735
Audit fees		305		246		855			742
Legal, tax and professional fees		947		1,004		3,217			2,758
FDIC Insurance premiums		561		975		2,129			2,953
Correspondent bank service charges		198		192		606			564
Advertising and public relations		1,033		803		2,711			2,288
Amortization of intangible assets		101		151		317			463
Other noninterest expense		3,555		3,294		10,269			9,250
Total Noninterest Expense	$	26,320	$	24,706	$	78,367		$	71,995
TAX EQUIVALENT YIELD ADJUSTMENT	$	3,209	$	2,718	$	9,503		$	7,953

FIRST FINANCIAL BANKSHARES, INC.

SELECTED FINANCIAL DATA (UNAUDITED)

(In thousands)

	Three Months  Ended September 30, 2011
	Average Balance		Tax Equivalent Interest		Yield / Rate
Interest-earning assets:
Fed funds sold	$	2,979	$	—		—	%
Interest-bearing deposits in nonaffiliated banks		159,519		275		0.68	%
Taxable securities		1,098,898		9,363		3.41	%
Tax exempt securities		574,311		8,447		5.88	%
Loans		1,733,316		25,288		5.79	%
Total interest-earning assets		3,569,023		43,373		4.82	%
Noninterest-earning assets		273,428
Total assets	$	3,842,451
Interest-bearing liabilities:
Deposits	$	2,138,043	$	1,807		0.34	%
Fed funds purchased and other short term borrowings		192,866		47		0.10	%
Total interest-bearing liabilities		2,330,909		1,854		0.32	%
Noninterest-bearing liabilities		1,026,336
Shareholders’ equity		485,206
Total liabilities and shareholders’ equity	$	3,842,451
Net interest income and margin (tax equivalent)			$	41,519		4.62	%
	Nine Months  Ended September 30, 2011
	Average Balance		Tax Equivalent Interest		Yield / Rate
Interest-earning assets:
Fed funds sold	$	4,498	$	—		—	%
Interest-bearing deposits in nonaffiliated banks		178,118		960		0.72	%
Taxable securities		1,082,780		28,787		3.54	%
Tax exempt securities		556,744		25,083		6.01	%
Loans		1,703,375		74,805		5.87	%
Total interest-earning assets		3,525,515		129,635		4.92	%
Noninterest-earning assets		273,804
Total assets	$	3,799,319
Interest-bearing liabilities:
Deposits	$	2,152,529	$	6,170		0.38	%
Fed funds purchased and other short term borrowings		191,671		150		0.10	%
Total interest-bearing liabilities		2,344,200		6,320		0.36	%
Noninterest-bearing liabilities		990,444
Shareholders’ equity		464,675
Total liabilities and shareholders’ equity	$	3,799,319
Net interest income and margin (tax equivalent)			$	123,315		4.68	%