2013 ffin annual meeting presentation

2013 Annual Shareholder Meeting

Years with Company Years in Industry

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

37 42

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

10 34

Gary L. Webb Executive Vice President Operations

10 24

Gary S. Gragg Executive Vice President Credit Administration

22 34

Marna Yerigan Executive Vice President Credit Administration

2 29

Ron Butler Executive Vice President Chief Administrative Officer

19 31

Senior Management at First Financial

Years with Company Years in Industry

Michele Stevens Senior Vice President Advertising and Marketing

37 42

Courtney Jordan Senior Vice President Training

10 34

Bob Goodner Senior Vice President & Compliance Officer Compliance

12 35

Luke Longhofer Senior Vice President & Loan Review Officer Credit Administration

3 10

Brandon Harris Senior Vice President Appraisal Services

1 15

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

26 30

Senior Management at First Financial

Experienced Regional CEOs & Presidents

Years with Company Years in Industry

Marelyn Shedd, Abilene 22 30

Mike Mauldin, Hereford 10 35

Kirby Andrews, Sweetwater 22 25

Trent Swearengin, Eastland 13 15

Mike Boyd, San Angelo 37 41

Tom O’Neil, Cleburne 15 33

Matt Reynolds, Cleburne 8 31

Ron Mullins, Stephenville 7 35

Jay Gibbs, Weatherford 11 39

Mark Jones, Southlake 12 35

Ken Williamson, Mineral Wells 11 42

Robert Pate, Huntsville 16 32

Fred Wren, Huntsville 1 34

Gary Tucker, First Technology Services 22 38

Board of DirectorsYears as Board

MemberCommittee

Appointment

Steven L. Beal Director and Former President and COO of Concho Resources Inc.

3

Executive / Audit

Compensation

Nominating/Corporate Governance

Tucker S. Bridwell President, Mansefeldt Investment Corporation 6

Lead Director / Executive

Audit / Nominating/

Corporate Governance

Joseph E. Canon Executive Director, Dodge Jones Foundation 17

Compensation

Asset and Liability

David Copeland President, SIPCO, Inc. and Shelton Family Foundation

15Executive / Audit

Nominating/Corporate Governance

Asset and Liability

F. Scott Dueser Chairman of the Board, President and CEO 22 Executive

Murray Edwards Principal, The Edwards Group 7

Executive / Audit

Nominating /Corporate Governance

Board of Directors

Years as Board Member

Committee Appointment

Ron Giddiens G&G Investments

3Audit

Asset and Liability

Tim LancasterPresident & CEO Hedrick Health System - Proposed - Audit

Kade L. Matthews Ranching and Investments 14 Compensation

Johnny E. Trotter President and CEO Livestock Investors, Ltd. 9

Executive

Compensation

Nominating/Corporate Governance

Independent Public Auditors

Forward Looking Statement

The numbers, as of and for the three months ended March 31, 2013, 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.

2012 Financial Review

Earnings

2007 2008 2009 2010 2011 2012

$49.5$53.1 $53.8

$59.7

$68.4

$74.2Chart Title

26th Consecutive Year of Increased Earnings

FFIN Earnings (in millions)

2007 2008 2009 2010 2011 2012

$1.59$1.71 $1.72

$1.91

$2.17

$2.36Chart Title

Strong Shareholder Earnings

Basic Earnings Per Share

2006 2007 2008 2009 2010 2011 2012

FirstFinancial 53.57% 52.83% 50.76% 50.11% 49.49% 48.37% 48.14%

Peer Group 61.29% 63.12% 68.12% 69.53% 67.33% 65.57% 65.75%

Working Harder and Smarter

Efficiency Ratio (FFIN vs. Peers)

3rd Qtr. '09

4th Qtr. '09

1st Qtr. '10

2nd Qtr. '10

3rd Qtr. '10

4th Qtr. '10

1st Qtr. '11

2nd Qtr. '11

3rd Qtr. '11

4th Qtr. '11

1st Qtr. '12

2nd Qtr. '12

3rd Qtr. '12

4th Qtr. '12

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

2006 2007 2008 2009 2010 2011 2012

1.68% 1.72% 1.74% 1.72% 1.75% 1.78% 1.75%

1.10%

0.87%

-0.03%

-0.18%

0.24%

0.79%

0.98%

FFIN Outperforms Peers

Percentage Return on Average Assets

Pe

er

Gro

up

Fir

st

Fin

an

cia

l

2006 2007 2008 2009 2010 2011 2012

16.20%15.87%

15.27%

13.63% 13.74% 14.44% 13.85%12.61%

9.45%

-1.83%-2.57%

0.88%

7.27%8.72%

Strong Return on Capital

Percentage Return on Average EquityP

ee

r G

rou

p

Fir

st

Fin

an

cia

l

12-31-12 03-31-13To be considered

well Capitalized

Tier 1

Leverage Ratio10.60 10.69 > 5.00

Tier 1 Risk

Based Capital Ratio17.43 17.54 > 6.00

Risk Based

Capital Ratio18.68 18.80 > 10.00

Capital Ratios

2007 2008 2009 2010 2011 2012

$3,070$3,212 $3,279

$3,776

$4,121

$4,500Chart Title

Growth in Total Assets

Asset Performance

(in millions)

2006 2007 2008 2009 2010 2011 2012$73 $84 $77 $73 $81 $66 $68

$165 $182 $191 $175 $191 $218 $273 $31 $32 $52

$344 $394 $391 $406 $429 $427

$510

$760 $836 $855 $860

$990 $1,076

$1,238

Real Estate

Commercial

Student

Consumer

Agricultural

Loan Performance

Growth in FFIN Total Loans (in millions)

$1,373

$1,566 $1,514

$1,690$1,787

$1,528

$2,089

2007 2008 2009 2010 2011 2012

FirstFinancial 0.31% 0.80% 1.46% 1.53% 1.64% 1.22%

Peer Group 0.98% 2.63% 5.41% 5.37% 4.64% 3.70%

Sound Lending Practices

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

2007 2008 2009 2010 2011 2012

$739 $797 $836 $959 $1,102$1,312

$1,807 $1,786 $1,849$2,154

$2,233$2,321

Non Interest Bearing Interest Bearing

Deposit Growth

Growth in FFIN Total Deposits (in millions)

$3,633

$2,546 $2,583 $2,685

$3,113$3,335

1st Quarter 2013 Summary

2008 2009 2010 2011 2012 2013

$13.2 $13.7 $13.7

$16.3$17.8 $18.6

1st Quarter Earnings

(in millions)FFIN Earnings

Account Growth

Net Growth in 2011 – 4,036 Accounts

Net Growth in 2012 – 1,219 Accounts

New Growth in 2013 – 1,139 Accounts

December 31, 2010

December 31, 2011

December 31, 2012

March 31, 2013

Total Number of Accounts

200,027 204,063 205,282 206,421

2008 2009 2010 2011 2012 2013

$0.42 $0.44 $0.44

$0.52$0.56

$0.59

Shareholder Earnings – 1st Quarter

Basic Earnings Per Share

2007 2008 2009 2010 2011 2012

$1,428

$1,631 $1,664$1,783

$1,912

$2,233Chart Title

Growth in Trust Assets

Total Trust Assets – Book Value (in millions)

2007 2008 2009 2010 2011 2011

$8,746$9,441 $9,083

$10,809

$12,671

$14,464Chart Title

Total Trust Fees

Growth in FFTAM Fees (in thousands)

2009 2010 2011 2012

$745

$1,159

$1,835

$2,167

Chart Title

Growth in Mineral Management

Revenue from Mineral Management

(in thousands)

2007 2008 2009 2010 2011 2012

$2,549$2,810 $2,631

$3,254

$4,176

$5,183Chart Title

Growth in FFTAM Income

Net Trust Income

(in thousands)

Managed Equity Styles

Equity Income

Core Domestic

Core Diversified

Core World

Strategic Growth

36

2008 2009 2010 2011 2012 2013

$737

$606

$739

$1,015

$1,225

$1,422Chart Title

Growth in FFTAM Income

Net Trust Income – 1st Quarter

(in thousands)

Joe E. Canon, J.D. Executive Director, Dodge Jones Foundation

David Copeland President, Shelton Family Foundation

John L. BeckhamBeckham Rector & Eargle, LLP

F. Scott Dueser President, First Financial Bankshares, Inc.

David F. Lupton President, Angelo Glass & Mirror Company, Inc.

Bill Parham Boucher Morgan & Young CPAs

Ronnie CoxInvestments

Sarah CampbellPortfolio Manager

Kirk W. Thaxton Chairman of the Board, President & CEO, First Financial Trust & Asset Management

Board of Directors – First Financial Trust & Asset Management

The More Things Change,

The More We Stay The Same

Customer Service First

Mobile Banking

43

Challenges

Overwhelming number of unreasonable regulations

from Washington

Stagnant national economy

Inept federal government

Low interest rate environment

Maintaining net interest margin

Keep nonperforming assets to a minimum

Consolidation of Charters

Regulatory compliance

Technology complexities

Cost Savings

Opportunities

Loan Growth

Mortgage Lending

Trust Services

Treasury Management

Mobile Banking / Picture Pay

Lower Efficiency Ratio

Potential Acquisitions

Recent De Novo Growth Weatherford – I-20 Branch – Expected to Open 2nd Qtr. 2013

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

Grapevine

48

Antilley Road - Abilene

49

Waxahachie

50

HEB – San Angelo

I-20 - Weatherford

52

Core Markets: West Central Texas

Markets served benefiting from well-established, long- time customers

REGIONASSET

SIZE*LOCATIONS

DEPOSIT

MARKET SHARE**

MARKET

SHARE RANK**

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

$1,531 M 15 43% 1

First Financial Bank(Hereford)

$166 M 1 43% 1

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

$228M 4 58% 1

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

$188 M 4 34% 1

First Financial Bank(San Angelo)

$462M 3 19% 2

TOTALS $2,575M 27* Data as of 03-31-13** Data as of 06-30-12

Expansion Markets REGION ASSET SIZE* LOCATIONS

DEPOSIT MARKET

SHARE**

MARKET SHARE

RANK**

First Financial Bank

(Cleburne, Burleson, Alvarado, Midlothian,

Waxahachie)

$344 M 6 22% 1

First Financial Bank

(Southlake, Trophy Club, Keller, Grapevine

Bridgeport, Decatur, Boyd)

$355 M 4

3

7%

16%

5

3

First Financial Bank

(Stephenville, Granbury, Glen Rose, Acton)

$392 M 6 22% 2

First Financial Bank

(Weatherford, Aledo, Willow Park, Brock, Ft. Worth)

$424 M 7 24% 1

First Financial Bank

(Mineral Wells)

$215 M 1 34% 1

First Financial Bank

(Huntsville)

$177 M 1 20% 2

TOTALS $1,907 28 * Data as of 03-31-13** Data as of 06-30-12

55

Orange Acquisition

Definitive Agreement Signed - February 2013

Orange, Jefferson and Newton Counties Approximately 350,000 Residents Strategically located on Interstate 10 – 100 miles east of Houston Three Major Shipping Ports for Energy and Petrochemical industries Large refineries, natural gas terminals and recent investment from large

Fortune 500 Companies, such as Exxon Mobil, DuPont and Goodyear

$443.8 million in Assets* $381.1 million in deposits $295.9 million in loans

Approximately 1.3x book; 13x last twelve months earnings (tax effected) Orange acquisition is consistent with our acquisition model of high growth areas

and along the Interstates Provides Diversification #1 Market Share in Orange County – 40%, more than twice the nearest competitor

*As of Dec. 31, 2012

Stephen Lee – President Orange Savings Bank

57

Tommy GunnCity Attorney

Paul PevetoCFO, Cloeren, Inc.

Walter Riedel Executive Director, H.J. Lutcher Stark Foundation

Ross Smith President & CEO, Akrotex

Board of Directors – Orange Savings Bank

Orange

59

Mauriceville

60

Newton

61

Vidor

62

Port Arthur

63

2007 2008 2009 2010 2011 2012

$49.5$53.1 $53.8

$59.7

$68.4

$74.2Chart Title

26th Consecutive Year of Increased Earnings

FFIN Earnings (in millions)

Recognitions

KBW Honor Roll – One of Forty-seven banks named – April 2013

SNL Financial #11 Best Performing Community Bank ($500M - $5B) – March 2013

Nifty 50: Bank Director Magazine - #5 – Based on Return on Equity / Average Tangible Equity – January 2013

American Banker - #19 – Based on three year average Return on Equity – August 2012

ABA Banking Journal - #13 – Top Performing mid-sized banks ($1B - $10B) – May 2012

Stock cost in January 2012 $33,430

Dividend declared ($0.99 x 1,000 shares) $ 990

Increase in stock price during 2012($39.01 from $33.43 X 1,000 shares) $2210,720

2012 return on investment 19.65%

2011 return on investment 0.61%

2010 return on investment -2.99%

2009 return on investment 0.69%

2008 return on investment 50.20%

5 year compound average return 9.55%

Total Return on Investment

$5,580

Assume you owned 1,000 shares of FFIN stock on January 1, 2012…

Strong Stock Performance

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

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

Dividends Per Share

2006 2007 2008 2009 2010 2011 2012

$0.79$0.84

$0.89 $0.91 $0.91$0.95

$0.99Chart Title

Annual Dividends Declared Per Share

Increase Cash Dividend

Today $0.25 per share quarterly

Increase cash divided to $0.26 per quarter – 4.0% increase

Shareholders of record as of June 14, 2013

Dividend payable July 1, 2013

www.ffin.com