First Financial Bankshares 2nd QTR 2017

2nd Quarter 2017

First Financial Bankshares, Inc.

1

Forward Looking Statement

The numbers, as of and for the quarter and six-months ended June 30, 2017, 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.

22

Who We Are

$6.9 billion financial holding company

headquartered in Abilene, Texas

Group of 10 separate regions

127 year history

Growth markets include 50 mile radius of

Dallas, Fort Worth, and Houston

3

Recognitions – Financial Exploitation Prevention Program

Texas Bankers Association Cornerstone Award for Day of

Service – May 2017

Texas Bankers Association 2016 Leaders in Financial Education

Award – May 2016

House Investments and Financial Services Committee – March 2016

Texas Senate Committee on Business and Commerce – Jan. 2016

AARP Roundtable Discussion – November 2015

ABA Foundation Community Commitment Award – November 2015

White House Conference on Aging – July 2015

4

55

Recognitions

Raymond James Community Bankers Cup #2, One of thirty

banks named– April 2017

KBW Honor Roll – One of fifteen banks named – April 2017

SNL - #5 Best-Performing Regional Bank – April 2016

2015 Proven Performers Award Winner – Bank Intelligence

Solutions

American Banker - #15 – Based on three year average Return on

Equity – May 2015

66

What Makes Us Different

One Bank, Eleven Regions Concept

One Bank

Consolidation of backroom operations, technology, and

compliance (lower efficiency ratio)

Ten 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

77

FFIN’s Unique Positioning in Texas

Bank Key Markets

Comerica DFW, Austin, Houston, California, Michigan, Florida, Mexico

Green Houston, Austin, Dallas

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

Veritex Dallas

88

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

$374 million in Assets at acquisition date

$343 million in deposits

$248 million in loans

1.06% Return on Assets in 2014

$61.0 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

99

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

Are now offering expanded mortgage products and services to customers

10

1111

Texas: Large and Growing

Five most populous states:* Growth

(2005 – 2015)

California 39.2 million 8.3%

Texas 27.7 million 21.1%

Florida 20.3 million 14.0%

New York 19.8 million 2.8%

Illinois 12.9 million 0.8%

* U.S. Census Bureau

1212

Target Markets – Population Growth

Population growth (2005-2015) in FFIN expansion markets:*

Texas 21.1%

Bridgeport & Wise County 20.1%

Fort Worth & Tarrant County 20.9%

Cleburne & Johnson County 14.6%

Weatherford, Willow Park, Aledo & Parker County 31.8%

Granbury & Hood County 18.0%

Stephenville & Erath County 16.3%

Conroe & Montgomery County 46.0%

* U.S. Census Bureau

1313

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

Eastland, Ranger, Rising Star, Cisco,

Sweetwater, Roby, Trent, Merkel)

$2,431M 23 46% 1


(Hereford)

$190M 1 45% 1


(San Angelo)

$685M 3 26% 1

TOTALS $3,306M 27

* Data as of 6-30-17

** Data as of 06-30-16

1414

Expansion Markets

REGION ASSET SIZE* LOCATIONSDEPOSIT MARKET

SHARE**

MARKET SHARE

RANK**


(Cleburne, Burleson, Alvarado)

(Midlothian, Waxahachie)

$475M 4

2

20%

10%

2

4


(Southlake, Trophy Club, Keller, Grapevine)

(Bridgeport, Decatur, Boyd)

$531M 4

3

4%

20%

5

2


(Stephenville, Mineral Wells, Granbury, Glen Rose, Acton)

$780M 7 30% 1


(Weatherford, Aledo, Willow Park, Brock)

$519M 6 23% 1


(Ft. Worth)

$80M 1 - -


(Orange, Mauriceville, Vidor)

(Newton, Port Arthur, Beaumont)

$522M 3

3

37%

3%

1

7


(Conroe, Magnolia, Cut and Shoot, Montgomery, Huntsville, Willis, Tomball,

New Waverly)

(Market Share for Huntsville, Conroe, Magnolia, Cut and Shoot, Montgomery and Willis Only)

$604M 9 10% 5

TOTALS $3,511M 42

* Data as of 3-31-17

** Data as of 06-30-16

1515

Recent De Novo Growth

New Waverly: Branch of Huntsville – August 2014

Beaumont: Branch of Orange – August 2014

Weatherford: I-20 Branch – June 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 (New Building – Opened August 2016)

Lamesa: Office of Trust Company – April 2011

Odessa: Branch of Abilene – February 2010 (New Building – Opened September 2016)

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 (New Building – Opened May 2016)

Fort Worth – Forest Park Blvd. and Rosedale (Opened May 2016)

161616

Fort Worth – Forest Park Blvd. and Rosedale

1717

18

Years with Company Years in Industry

Scott DueserChairman of the Board, President &

Chief Executive Officer

41 46

Ron ButlerExecutive Vice President

Chief Administrative Officer

24 36

Troy ForePresident

First Financial Mortgage

2 36

Gary S. GraggExecutive Vice President

Lending

27 39

J. Bruce Hildebrand, CPAExecutive Vice President

Chief Financial Officer

15 39

Monica HoustonExecutive Vice President

Retail Banking & Training

21 21

Executive Management at First Financial

18

19


Luke LonghoferExecutive Vice President & Loan Review Officer

Lending

7 15

Randy RoeweExecutive Vice President

Chief Risk Officer

2 25

Kirk Thaxton, CTFAPresident

First Financial Trust & Asset Management

31 34

Marna YeriganExecutive Vice President

Lending

6 33

Executive Management at First Financial

19

20


Brandon Harris

Senior Vice President

Appraisal Services

3 16

Larry Kentz

Senior Vice President & Compliance Officer

Compliance

3 36

Michele Stevens


Advertising and Marketing

17 32

J. Kyle McVey


Chief Accounting Officer

7 9

Senior Management at First Financial

20

Experienced Regional CEOs & Presidents

21


Marelyn Shedd, Abilene 26 34

Kirby Andrews, Sweetwater 27 30

David Bailey, Eastland 14 14

Mike Mauldin, Hereford 15 39

Chris Evatt, San Angelo 16 16

Tom O’Neil, Cleburne 19 37

Trent Swearengin, Stephenville 18 20

Jay Gibbs, Weatherford 15 43

Justin Hooper, Weatherford 13 24

Mark Jones, Southlake 17 40

Stephen Lee, Southeast Region 4 28

Sam Baker, Conroe 2 41

Robert Pate, Conroe 20 36

Martin Noto, Fort Worth 2 33

2222

$4,502

$5,222

$5,848

$6,665$6,810 $6,947*

2012 2013 2014 2015 2016 2017

Growth in Total Assets

Asset Performance

(in millions)

*As of June 30, 2017

2323

$1,312 $1,362 $1,570 $1,746 $1,718 1,856

$2,321$2,773

$3,180$3,444 $3,761 $3,770

2012 2013 2014 2015 2016 2017

Non Interest Bearing Interest Bearing

Deposit Growth

Growth in FFIN Total Deposits (in millions)

$5,626*

$3,633

$4,135

$4,750

$5,190$5,479


2424

Deposit Products

Time8.5%

Demand33.0%

Money Market45.6%

Savings12.9%


2525

Account Growth

Net Growth in 2013 – 3,308 Accounts*

Net Growth in 2014 – 10,687 Accounts

Net Growth in 2015 – 5,886 Accounts**

Net Growth in 2016 – 3,015 Accounts

Net Growth in 2017 - 4,091 Accounts

December 31,

2013

December 31,

2014

December 31,

2015

December 31,

2016

June 30,

2017

Total Number

of Accounts

208,590 234,614 251,699 254,714 258,805

*(Excluding Orange Acquisition)

**(Excluding Conroe Acquisition)

2626

$68 $76 $106 $102 $84 $77

$273 $334 $361 $386 $409 $423

$510 $590

$640 $685 $674 $668

$1,238

$1,689 $1,831

$2,178 $2,217 $2,290

2012 2013 2014 2015 2016 2017

Real Estate

Commercial

Consumer

Agricultural

Loan Performance

Growth in FFIN Total Loans (in millions)

$2,089

$2,689

$2,938

$3,458$3,351 $3,384


2727

Overview of Loan Portfolio

Commercial 19.3% Agriculture

2.2%

Consumer12.2%

Real Estate66.3%

Note: Oil & Gas Exposure 2.03%


2828

Residential Development & Construction

7.7%

1-4 Family 45.4%

Commercial Development and

Construction5.8%

Commercial R/E 24.4%

Other R/E 16.7%

Breakdown of R/E Loan Portfolio


2929

Oil & Gas Portfolio Analysis

Oil & Gas Supplemental Information (dollars in thousands)

December 31, 2016 June 30, 2017

Oil & Gas Loans 78,483 70,187

% of Total Loans 2.32% 2.03%

Classified Oil & Gas Loans 32,518 24,404

Non Accrual Oil & Gas Loans 4,092 2,860

Quarter Ended Net Charge-offs 105 50

ALLL of % of Oil & Gas 6.28% 7.24%

3030

2012 2013 2014 2015 2016 2017*

End ofPeriod 57.5 65.0 61.8 64.6 61.8 61.5

Average

Balances56.4 64.3 64.1 63.0 64.9 60.9

Loan to Deposit Ratio


3131

2012 2013 2014 2015 2016 2017

FirstFinancial 1.22% 1.16% 0.74% 0.90% 0.86% 0.72%*

Peer Group 3.67% 2.71% 1.92% 1.32% 1.05% 1.01%**

Sound Lending Practices

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


**As of March 31, 2017

3232

Less than 1

year1 to 2 years 3 to 5 years 6 to 10 years

Over 10

years

34.59% 13.30% 32.49% 14.35% 5.27%

Loan Repricing

Loan Portfolio Interest Rate Risk Analysis


3333

$34,839 $33,900$36,824

$41,877

$45,779$47,410*

$3,484 $3,753 $4,465

$9,685 $10,212

$3,675*

2012 2013 2014 2015 2016 2017

ALLL Provision

Allowance for Loan Losses and Provision for Loan Losses

(in thousands)

*As of and for 6 months

ended June 30, 2017

3434

Summary of Bond Portfolio

Agencies 2.65%Corporates

0.92%

Muni 50.08%

MBSs 23.68%

CMOs 22.29%

Treasuries 0.38%


3535

$2,233$2,465

$2,774$3,060

$3,374

$3,635*

$2,852

$3,361

$3,759 $3,870

$4,373

$4,733*

2012 2013 2014 2015 2016 2017

Growth in Trust Assets

Total Trust Assets – Book Value / Fair Value (in millions)


Bo

ok

Va

lue

Fa

ir V

alu

e

3636

$14,464

$16,317

$18,766 $19,252 $19,636

$7,124 $7,746

$9,125 $9,472 $9,380

$11,764

2012 2013 2014 2015 2016 2017

Total Trust Fees

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

thru

June 30th

3737

$5,183

$6,142

$7,109$7,449

$7,190

$2,597 $2,900

$3,542 $3,631 $3,350

$4,263

2012 2013 2014 2015 2016 2017

Total Trust Net Income

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

thru

June 30th

38

$74.2$78.9

$89.6

$100.4$104.8

$36.1 $38.1$43.5

$49.3$52.5 $54.9

2012 2013 2014 2015 2016 2017

30th Consecutive Year of Increased Earnings

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

38

thru

June 30

39

$1.18 $1.24

$1.40

$1.55 $1.59

$0.58 $0.60$0.68

$0.77 $0.80 $0.83

2012 2013 2014 2015 2016 2017

Strong Shareholder Earnings

Basic Earnings Per Share (Full year and 1st 6 months)

39

thru

June 30th

40

1.75%1.64% 1.65% 1.61% 1.59%

0.98% 1.03% 0.95% 0.95%1.00%

2012 2013 2014 2015 2016

FFIN Outperforms Peers

Percentage Return on Average Assets

Pe

er

Gro

up

Fir

st

Fin

an

cia

l

40

41

13.85% 13.75% 14.00%13.60%

12.36%

8.56% 8.88%8.32%

8.59%9.13%

2012 2013 2014 2015 2016

Strong Return on Capital

Percentage Return on Average Equity

Pe

er

Gro

up

Fir

st

Fin

an

cia

l

41

4242

2013 2014 2015 2016 2017*

Shareholders’Equity 587,647 681,537 804,986 837,885 887,442

As a Percent of Total

Assets11.25 11.65 12.08 12.30 12.77

Tangible

Capital490,163 584,178 660,537 694,282 744,322

Tier 1

Leverage Ratio9.84 9.89 9.96 10.71 10.79

Common Equity

Tier 1 Capital Ratio15.82 16.05 15.90 17.30 17.79

Tier 1 Capital Ratio 15.82 16.05 15.90 17.30 17.79

Total

Capital Ratio16.97 17.16 16.97 18.45 18.97

Capital & Capital Ratios

(dollars in thousands)


43

3.00%

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

5.00%

1st Qtr.'14

2nd Qtr.'14

3rd Qtr.'14

4th Qtr.'14

1st Qtr.'15

2nd Qtr.'15

3rd Qtr.'15

4th Qtr.'15

1st Qtr.'16

2nd Qtr.'16

3rd Qtr.'16

4th Qtr.'16

1st Qtr.'17

2nd Qtr.'17

First Financial Peer Group

Net Interest Margin

Quarterly Interest Margin

43

4444

2012 2013 2014 2015 2016 2017

FirstFinancial 48.14% 50.20% 49.24% 47.61% 49.22% 49.49%*

Peer Group 65.77% 67.87% 66.94% 63.92% 62.83% 61.20%**

Working Harder and Smarter

Efficiency Ratio (FFIN vs. Peers)

**As of and for 3 months

ended March 31, 2017

*As of and for 6 months

ended June 30, 2017

4545

Stock cost in January 2016 $30,170

Dividend declared ($0.70 x 1,000 shares) $ 700

Increase in stock price during 2016

($30.17 to $45.20 X 1,000 shares)$15,030

2016 return on investment 52.14%


2014 return on investment -7.96%



5 year compound average return 12.36%

Total Return on Investment

21.94%

Assume you owned 1,000 shares of FFIN stock on January 1, 2016…

4646

Dividends Per Share

$0.50 $0.52 $0.55

$0.62

$0.70

2012 2013 2014 2015 2016

Annual Dividends Declared Per Share

Increased Cash Dividend

Announced at shareholder meeting on April 25, 2017

Increased cash Dividend by $0.01 to $0.19 per quarter – 5.6% increase

2017 Dividend will be $0.75

47

4848

Strong Stock Performance

-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

FFIN S&P 500 NASDAQ Dow JonesJan . ‘07 Dec. ’16Dec . ‘09Dec ‘07 Dec ‘08 Dec. ‘10 Dec. ’11 Dec. ’12 Dec. ’13 Dec. ’14 Dec. ’15 Jun. ’17

49

Focus for 2017

Grow Loans and Deposits

Grow Mortgage and Trust

Improve our net Interest margin

Increase our fee income

Control expenses

Improve credit quality

Make an acquisition