First Financial Q4 2023 Earnings Report
Key Takeaways
First Financial Bankshares reported a decrease in earnings for Q4 2023, with net income at $45.98 million compared to $58.67 million in the same quarter of the previous year. Despite the decline, the company maintained total deposit levels and achieved organic loan growth of $706.92 million for the year. The bank also restructured its balance sheet by selling lower-yielding securities and redeploying the funds into higher-earning loans.
Earnings decreased to $45.98 million in Q4 2023 from $58.67 million in Q4 2022.
Basic and diluted earnings per share were $0.32 for Q4 2023, down from $0.41 in Q4 2022.
Maintained total deposit levels compared to the prior year-end.
Loans grew organically by $706.92 million during the year.
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First Financial Revenue by Segment
Forward Guidance
The company believes it is well-positioned for success in the economic environment entering 2024.
Positive Outlook
- Cash flows from the sales of securities combined with the monthly maturities in bond and loan portfolios are providing needed liquidity to grow loans.
- Loans are yielding approximately 8%, resulting in an anticipated earn back period of less than 18 months.
- The company maintained total deposit levels when compared to 2022 year-end balances due to the addition of over 12,500 net new accounts.
- The company grew loans organically $706.92 million, or 10.97 percent, during the year while maintaining conservative credit standards.
- The company restructured its balance sheet by selling $411.13 million in securities with lower yields and redeployed those dollars into the higher earning loan portfolio.
Challenges Ahead
- A $6.53 million decrease in net interest income compared to the same quarter a year ago.
- A $964 thousand decrease in mortgage revenues compared to the same quarter a year ago.
- A $6.34 million loss on sale of securities compared to the same quarter a year ago.
- A $2.08 million increase in FDIC insurance premiums, which includes a $1.75 million special assessment compared to the same quarter a year ago.
- A $1.51 million increase in incentive and profit sharing expenses compared to the same quarter a year ago.