first financial bankshares 2q 2015

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2nd Quarter 2015

First Financial Bankshares, Inc.

Forward Looking Statement

The numbers, as of and for the six months ended June 30, 2015, contained within this presentation are unaudited. 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. The Company does not undertake any obligation to update publicly or revise any forward-looking statements herein because of new information, future events or otherwise.

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Who We Are

$6.1 billion financial holding company headquartered in Abilene, Texas

Group of 13 separate regions (Following the close of Conroe acquisition on July 31, 2015)

125-year history

Growth markets include 50 mile radius of the larger cities of Texas

Recognitions

2015 Proven Performers Award Winner – Bank Intelligence Solutions

KBW Honor Roll – One of twenty five banks named – April 2015

Raymond James Community Bankers Cup #1 – December 2014

Sandler O’Neil Bank & Thrift Small-Cap All Stars – September 2014

American Banker - #11 – Based on three year average Return on Equity – August 2014

ABA Banking Journal - #8 – Top Performing mid-sized banks ($1B - $10B) – May 2014

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What Makes Us Different

One Bank, Thirteen Regions Concept

One Bank Consolidation of backroom operations, technology, and

compliance (lower efficiency ratio)

Thirteen Regions Regional Presidents run their regions Local Boards – Movers and Shakers of the Community

Keep our regions locally focused Make sure we meet the needs of the community Help us make better loan decisions Help us market the region

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FFIN’s Unique Positioning in Texas

Bank Key MarketsComerica DFW, Austin, Houston, California, Michigan, Florida, Mexico

Green Houston, Austin, Dallas (New Public Company – August 2014)

Frost San Antonio, Austin, Corpus Christi, DFW, Rio Grande, West Texas

Independent North and Central Texas

International Bancshares Rio Grande, Houston, San Antonio, Oklahoma

Legacy Texas Dallas

Prosperity Houston, DFW, Austin, West Texas, South Central Texas, and Oklahoma

Southside East Texas

Texas Capital DFW, Austin, San Antonio, and Houston

Triumph Dallas (New Public Company – November 2014)

Veritex Dallas (New Public Company – October 2014)

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First Bank, N.A. - Conroe Acquisition Consummated July 31, 2015 Montgomery, Walker, & Harris Counties (On I-45 North of Houston)

Exxon Mobil Headquarters in the Woodlands Montgomery County – Approximately 500,000 residents, 55% growth from 2000 to

2010, 24th fastest growing county in the United States #4 Market Share in Conroe – 10.6%

8 Branches in Conroe, Magnolia, Tomball, Cut and Shoot, Montgomery, and Huntsville; additional site on Grand Parkway in Spring, Texas to expand

$372.2 million in Assets* $339.4 million in deposits $257.1 million in loans

1.06% Return on Assets in 2014 $61 million purchase price of our stock which represents 16x last twelve months

earnings Conroe acquisition is consistent with our acquisition model of high growth areas,

strong management and excellent earnings opportunity Provides diversification and fits well into our footprint Management and Board share same values to outstanding customer service

*As of June 30, 2015

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4Trust Mortgage Acquisition Consummated – May 31, 2015

Originated $175 million in mortgage loans in 2014 – Compared to $225 million that First Financial Bank originated in 2014

15 year old Company with offices in Fort Worth, Dallas and North Richland Hills

$1.9 million purchase price

Troy Fore is now President of Mortgage Division of First Financial Bank; other owners joining First Financial as EVP’s – Tammie Harding, Kami Graves, and Ryan Craig

Considered one of the top mortgage companies in Fort Worth

Will be able to offer expanded mortgage products and services to their customers

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Texas: Large and Growing

Five most populous states:* Growth (2003 – 2013)

California 38.3 million 8.7%

Texas 26.5 million 20.1%

New York 19.7 million 2.5%

Florida 19.6 million 15.0%

Illinois 12.9 million 2.6%

* U.S. Census Bureau

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Target Markets – Population Growth

Population growth (2003-2013) in FFIN expansion markets:*

Texas 20.1%

Bridgeport & Wise County 13.2%

Fort Worth & Tarrant County 23.2%

Cleburne & Johnson County 12.0%

Weatherford, Willow Park, Aledo & Parker County 25.6%

Granbury & Hood County 18.2%

Stephenville & Erath County 17.9%

* U.S. Census Bureau

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Texas Benefits

State unemployment rate at 4.1%, state’s lowest rate since November 2008

Only Texas and New York have restored all the jobs lost when recession hit in 2007

CEO Magazine ranks Texas best state for business – for seventh consecutive year

Texas created more jobs (310,000) during the prior twelve months, more than any other state

Texas created more private sector jobs than any other state during the past decade

Core Markets: West Central Texas Markets served benefiting from well-established, long- time customers

REGIONASSET SIZE*

LOCATIONSDEPOSIT

MARKET SHARE**MARKET

SHARE RANK**

First Financial Bank(Abilene, Clyde, Moran, Albany, Odessa)

$2,079M 15 48% 1

First Financial Bank(Hereford)

$176M 1 42% 1

First Financial Bank(Eastland, Ranger, Rising Star, Cisco)

$248M 4 66% 1

First Financial Bank(Sweetwater, Roby, Trent, Merkel)

$209M 4 36% 1

First Financial Bank(San Angelo)

$680M 3 19% 2

TOTALS $3,392M 27* Data as of 06-30-15** Data as of 06-30-14

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Expansion Markets REGION ASSET SIZE* LOCATIONS

DEPOSIT MARKET SHARE**

MARKET SHARE RANK**

First Financial Bank (Cleburne, Burleson, Alvarado)

(Midlothian, Waxahachie)

$398M 42

20%4%

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First Financial Bank (Southlake, Trophy Club, Keller, Grapevine)

(Bridgeport, Decatur, Boyd)

$403M 4

3

5%

19%

5

3

First Financial Bank (Stephenville, Granbury, Glen Rose, Acton)

$470M 6 22% 2

First Financial Bank(Weatherford, Aledo, Willow Park, Brock, Ft. Worth)

$480M 7 23% 1

First Financial Bank(Mineral Wells)

$257M 1 38% 1

First Financial Bank(Huntsville, New Waverly)

$192M 2 19% 2

First Financial Bank(Orange, Mauriceville, Vidor)

(Newton, Port Arthur, Beaumont)

$497M 33

41%10%

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TOTALS $2,697M 35

First Financial Bank (Acquired 7-31-15)(Conroe, Magnolia, Tomball, Cut and Shoot, Montgomery, Huntsville,

The Woodlands) - Market Share for Conroe Only

$372M 8 11% 4

* Data as of 06-30-15

** Data as of 06-30-14

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Recent De Novo Growth Lubbock: Office of Trust Company – September 2014 New Waverly: Branch of Huntsville – August 2014 Beaumont: Branch of Orange – August 2014 Weatherford: I-20 Branch – June 2013 (New Building Opened January 2015) San Angelo: HEB Branch – March 2013 Waxahachie: Branch of Cleburne – December 2012 Abilene: Antilley Road Branch – September 2012 Grapevine: Branch of Southlake – March 2012 Cisco: Branch of Eastland – September 2011 Lamesa: Office of Trust Company – April 2011 Odessa: Branch of Abilene – February 2010 Fort Worth: Branch of Weatherford – February 2010 Odessa: Office of Trust Company – April 2009 Merkel: Branch of Sweetwater – July 2008 Brock: Branch of Weatherford – March 2008 Acton: Branch of Stephenville – March 2008 Albany: Branch of Abilene – May 2007 Fort Worth: Office of Trust Company – April 2007 (Building New Building – Planned Opening Dec. 2015)

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Fort Worth – Forest Park Blvd. and Rosedale

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Fort Worth – Forest Park Blvd. and Rosedale

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Years with Company Years in Industry

Scott Dueser Chairman of the Board, President & Chief Executive Officer

39 43

Ron Butler Executive Vice President Chief Administrative Officer

22 33

Gary S. Gragg Executive Vice President Credit Administration

24 36

J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer

12 36

Luke Longhofer Executive Vice President & Loan Review Officer Credit Administration

3 10

Stan Limerick Executive Vice President Chief Information Officer

- 35

Randy Roewe Executive Vice President Chief Risk Officer

- 25

Kirk Thaxton, CTFA President, First Financial Trust & Asset Management

28 31

Gary L. Webb Executive Vice President 12 26

Marna Yerigan Executive Vice President Credit Administration

4 30

Executive Management at First Financial

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Years with Company Years in Industry

Brandon Harris Senior Vice President Appraisal Services

2 15

Monica Houston Senior Vice President Training

20 20

Larry Kentz Senior Vice President & Compliance Officer Compliance

1 35

Michele Stevens Senior Vice President Advertising and Marketing

16 32

Senior Management at First Financial

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Experienced Regional CEOs & PresidentsYears with Company Years in Industry

Marelyn Shedd, Abilene 23 31

Mike Mauldin, Hereford 12 37

Kirby Andrews, Sweetwater 24 27

Trent Swearengin, Eastland 15 17

Mike Boyd, San Angelo 39 42

Tom O’Neil, Cleburne 16 34

Ron Mullins, Stephenville 8 36

Jay Gibbs, Weatherford 13 40

Mark Jones, Southlake 14 37

Ken Williamson, Mineral Wells 13 43

Robert Pate, Huntsville 17 33

Fred Wren, Huntsville 2 35

Stephen Lee, Southeast Region 7 25

Sam Baker, Conroe 15 39

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2010 2011 2012 2013 2014 2015

$3,776$4,121

$4,502

$5,522

$5,848$6,115*

Chart Title

Growth in Total Assets

Asset Performance

(in millions)


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2010 2011 2012 2013 2014 2015

$959 $1,102 $1,312 $1,362 $1,570 $1,575

$2,154 $2,233$2,321

$2,773$3,180 $3,153

Non Interest Bearing Interest Bearing

Deposit Growth

Growth in FFIN Total Deposits (in millions)

$4,728*

$3,113$3,335

$3,633$4,135

$4,750


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Deposit Products

Time12.7%

Deman

d33.3%

Money

Market42.1%

Sav-ings11.9%


Account Growth

Net Growth in 2011 – 4,036 Accounts


Net Growth in 2013 – 3,308 Accounts*



December 31, 2011

December 31, 2012

December 31, 2013*

December 31, 2014

June 30,2015

Total Number of Accounts

204,063 205,282 208,590 234,614 239,589

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*(Excluding Orange Acquisition)

2010 2011 2012 2013 2014 2015$81 $66 $68 $76 $106 $92

$191 $218 $273 $334 $361 $362 $429 $427

$510 $590 $640 $647

$990 $1,076 $1,238

$1,689 $1,831 $1,867

Real Estate

Commercial

Consumer

Agricultural

Loan Performance

Growth in FFIN Total Loans (in millions)

$1,691$1,787

$2,089

$2,968

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$2,689$2,938


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Overview of Loan Portfolio Commercial

21.8% Agricul-ture3.1%

Consumer12.2%

Real Es-tate

62.9%

Note: Oil & Gas Exposure 2.8%*As of June 30, 2015

Residential Development & Construction 7.4%

1-4 Family 47.8%

Commercial Development and Construc-tion

4.3%

Commercial R/E 26.5%

Other R/E 14.0%

Chart Title

28

Breakdown of R/E Loan Portfolio


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2010 2011 2012 2013 2014 2015*

End of Period 54.3 53.6 57.5 65.0 61.8 62.8

Average Balances

56.0 54.6 56.4 64.3 64.1 61.7

Loan to Deposit Ratio


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Less than 1 year

1 to 3 years

3 to 5 years

5 to 10 years

10 to 15 years

Over 15 years

39.9% 4.1% 4.5% 13.2% 17.6% 11.8% 8.9%

Variable and Fixed Rate Loans

Loan Portfolio Interest Rate Risk Analysis

VariableRate

Fixed Rate


2010 2011 2012 2013 2014 2015

FirstFinancial 1.53% 1.64% 1.22% 1.16% 0.74% 0.61%*

Peer Group 5.37% 4.59% 2.75% 1.97% 1.25% 1.12%**

Sound Lending Practices

Nonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers)

31**As of March 31, 2015*As of June 30, 2015

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2010 2011 2012 2013 2014 2015

$31,106$34,315 $34,839 $33,900

$36,824$38,999*

$8,962$6,626

$3,484 $3,753 $4,465 $2,844*

ALLL Provision

Allowance for Loan Losses and Provision for Loan Losses

(in thousands)


Summary of Bond Portfolio

Agencies 6.42% Corporates 3.42%

Muni 49.57%

MBSs 17.40%

CMOs 22.77%

Trea-suries 0.42%

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2010 2011 2012 2013 2014 2015

$2,297 $2,431

$2,852

$3,361

$3,759$3,970

$1,783 $1,912$2,233

$2,465 $2,774

$2,996

Growth in Trust AssetsTotal Trust Assets

34

Mar

ket V

alue

Boo

k Va

lue


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2010 2011 2012 2013 2014 2015

$10,808

$12,671

$14,464

$16,317

$18,766

$5,198 $6,254

$7,124 $7,746 $9,125 $9,472

Total Trust Fees

Growth in FFTAM Fees (Full year and 1st 6 months) (in thousands)

thru June 30th

36

2010 2011 2012 2013 2014 2015

$3,254

$4,176

$5,183

$6,142

$7,109

$1,553 $2,078

$2,597 $2,900

$3,542 $3,631

Total Trust Net Income

Growth in FFTAM Net Income (Full year and 1st 6 months) (in thousands)

thru June 30th

2010 2011 2012 2013 2014 2015

$59.7

$68.4$74.2

$78.9

$89.6

$27.9$32.8 $36.1 $38.1

$43.5$49.3

28th Consecutive Year of Increased Earnings

FFIN Earnings (Full year and 1st 6 months) (in millions)

37

thru June 30th

38

2010 2011 2012 2013 2014 2015

$0.95

$1.09$1.18

$1.24

$1.40

$0.45$0.52

$0.58 $0.60$0.68

$0.77

thru June 30th

Strong Shareholder Earnings

Basic Earnings Per Share

*Per share amounts reflect the 2 for 1 stock split that was effective June 2, 2014.

2010 2011 2012 2013 2014

1.75% 1.78% 1.75%1.64% 1.65%

0.24%

0.80%

0.98% 1.04% 0.94%

FFIN Outperforms Peers

Percentage Return on Average Assets

Peer

Gro

up

Firs

t Fin

anci

al

39

2010 2011 2012 2013 2014

13.74%14.44%

13.85% 13.75% 14.00%

0.88%

7.27%

8.56% 8.89% 8.23%

Strong Return on Capital Percentage Return on Average Equity

Peer

Gro

up

Firs

t Fin

anci

al

40

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2011 2012 2013 2014 2015

Shareholders’Equity 508,537 556,963 587,647 681,537 701,193

As a Percent of Total Assets

12.34 12.37 11.25 11.65 11.47

Tangible

Capital436,415 484,990 490,163 584,178 602,154

Tier 1

Leverage Ratio10.33 10.60 9.84 9.89 9.84

Tier 1 Risk

Based Capital Ratio17.49 17.43 15.82 16.05 16.25

Risk Based

Capital Ratio18.74 18.68 16.97 17.16 17.36

Capital & Capital Ratios(dollars in thousands)


1st Qtr. '12

2nd Qtr. '12

3rd Qtr. '12

4th Qtr. '12

1st Qtr. '13

2nd Qtr. '13

3rd Qtr. '13

4th Qtr. '13

1st Qtr. '14

2nd Qtr. '14

3rd Qtr. '14

4th Qtr. '14

1st Qtr. '15

2nd Qtr. '15

3.00%

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

5.00%

First Financial Peer Group

Net Interest Margin

Quarterly Interest Margin

42

2010 2011 2012 2013 2014 2015

FirstFinancial 49.49% 48.37% 48.14% 50.20% 49.24% 46.73%*

Peer Group 67.33% 65.57% 65.77% 67.80% 66.76% 64.29%**

Working Harder and Smarter

Efficiency Ratio (FFIN vs. Peers)

43

**As of March 31, 2015*As of June 30, 2015

Stock cost in January 2014 $33,060

Dividend declared ($0.55 x 1,000 shares) $ 550

Decrease in stock price during 2014($33.06 to $29.88 X 1,000 shares) -$3,180

2014 return on investment -7.96%

2013 return on investment 72.11%



2010 return on investment -2.99%

5 year compound average return 12.36%

Total Return on Investment

12.36%

Assume you owned 1,000 shares of FFIN stock on January 1, 2014…

44*Adjusted for 2 for 1 stock split effective June 2, 2014.

Dividends Per Share

2010 2011 2012 2013 2014

$0.46 $0.48$0.50 $0.52

$0.55

Chart Title

Annual Dividends Declared Per Share*

45*Per share amounts reflect the 2 for 1 stock split that was effective June 2, 2014.

Strong Stock Performance

-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

200.00%

FFIN S&P 500 NASDAQ Dow JonesJan . ‘07 Mar. ’15Dec . ‘09Dec ‘07 Dec ‘08 Dec. ‘10 Dec. ’11 Dec. ’12 Dec. ’13 Dec. ’14

46

Challenges

Regulatory reform from Washington

Stagnant national economy

Oil & gas price decline

Low interest rate environment

Maintaining net interest margin

47

Opportunities

Loan Growth

Mortgage Lending

Trust Services

Treasury Management

Mobile Banking

Lower Efficiency Ratio

Potential Acquisitions

48

first financial bankshares 2q 2015

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