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FF

FIRST FINANCIAL BANKSHARES INC (FFIN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS was $0.36, down from $0.47 in Q2 and $0.39 in Q3 2024, primarily driven by a $21.55 million charge-off tied to alleged fraud at a commercial borrower; core margin and loan growth remained solid .
  • Net interest margin held at 3.80% vs 3.81% in Q2 2025 and 3.50% in Q3 2024; efficiency ratio improved YoY to 44.74% on stronger net interest income .
  • Street consensus for Q3 2025 was EPS $0.47 and Revenue $161.1M; actual EPS $0.36 and Revenue $136.83M, reflecting a miss tied to the provision/charge-off impact; management emphasized the event was isolated and is pursuing recoveries *.
  • Loans grew to $8.24B with 8.29% annualized growth vs Q2; deposits and repos rose to $12.85B, aided by $150M of ICS one-way deposits at attractive rates .
  • Capital remained strong (CET1 19.10%); board renewed authorization to repurchase up to 5,000,000 shares through July 31, 2026, supporting capital deployment flexibility .

What Went Well and What Went Wrong

What Went Well

  • Net interest income rose to $127.00M vs $123.73M in Q2 and $107.11M YoY, supporting a stable NIM at 3.80% despite rate dynamics .
  • Trust fees grew 10.74% YoY to $12.95M on AUM growth to $12.05B; mortgage income improved to $4.38M on better origination volume and team restructuring .
  • CEO emphasized core earnings momentum and confidence: “Despite this setback, our core earnings trends remain positive…we are optimistic as we move into the final quarter of the year…” .

What Went Wrong

  • A $21.55M commercial loan charge-off drove provision to $24.44M and net charge-offs to $22.34M, compressing earnings; management views the event as isolated but timing/amount of recovery is uncertain .
  • Noninterest expense rose to $73.67M vs $71.74M in Q2 and $66.01M YoY, with higher salaries/bonuses and software amortization/operational losses .
  • Classified loans increased YoY to $252.96M; while NPAs improved sequentially to 0.71% of loans and foreclosed assets, elevated classifications remain a watch item .

Financial Results

P&L and Margins (quarterly)

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($USD Millions)$107.11 $123.73 $127.00
Provision for Credit Losses ($USD Millions)$6.12 $3.13 $24.44
Net Interest Income After Provision ($USD Millions)$100.99 $120.60 $102.57
Noninterest Income ($USD Millions)$32.36 $32.87 $34.26
Noninterest Expense ($USD Millions)$66.01 $71.74 $73.67
Net Income ($USD Millions)$55.31 $66.66 $52.27
Diluted EPS ($USD)$0.39 $0.47 $0.36
Net Interest Margin (tax equivalent, %)3.50% 3.81% 3.80%
Efficiency Ratio (%)46.45% 44.97% 44.74%

Revenue and EPS vs Wall Street Consensus (SPGI)

MetricQ3 2025 ActualQ3 2025 Consensus
Revenue ($USD Millions)136.83*161.14*
Diluted EPS ($USD)0.36 0.47*
EPS - # of Estimates—5.0*
Revenue - # of Estimates—4.0*

Values retrieved from S&P Global*.

Note: SPGI “Revenue” definition reflects Net Interest Income + Noninterest Income − Provision for Credit Losses; Q3 2025 computed as $127.00M + $34.26M − $24.44M = $136.83M .

Balance Sheet and Asset Quality

MetricQ3 2024Q2 2025Q3 2025
Total Assets ($USD Billions)$13.58 $14.38 $14.84
Loans HFI ($USD Billions)$7.72 $8.07 $8.24
Deposits + Repos ($USD Billions)$11.81 $12.50 $12.90
NPAs / Loans + Foreclosed Assets (%)0.83% 0.79% 0.71%
Allowance for Loan Losses / Loans (%)1.29% 1.27% 1.29%
Net Charge-offs (Annualized %)0.04% 0.04% 1.07%
Classified Loans ($USD Millions)$229.92 $257.07 $252.96
CET1 Capital Ratio (%)18.83% 19.16% 19.10%

Noninterest Income Breakdown

Category ($USD Millions)Q3 2024Q2 2025Q3 2025
Trust Fees$11.69 $12.75 $12.95
Service Charges on Deposits$6.43 $6.13 $6.45
Debit Card Fees$5.53 $5.22 $5.33
Credit Card Fees$0.62 $0.71 $0.70
Mortgage Gain on Sale & Fees$3.36 $4.13 $4.38
Loan Recoveries (Interest/Fees)$1.36 $0.81 $1.66
Other Noninterest Income$3.14 $2.93 $2.92

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per Share ($)Q3 2025$0.18 (Q1–Q4 2024) $0.19 Raised vs 2024 run-rate
Share Repurchase AuthorizationThrough Jul 31, 2026Up to 5,000,000 shares through Jul 31, 2025 Renewed up to 5,000,000 shares through Jul 31, 2026 Renewed/extended
ICS One-Way Deposits ($USD Millions)Quarter-end$0 at Q2 2025 $150 at Q3 2025 Added tactical funding

No formal quantitative guidance ranges were provided for revenue, margins, opex, OI&E, or tax rate in the Q3 materials .

Earnings Call Themes & Trends

Note: We were unable to locate a Q3 2025 earnings call transcript in our document system; we relied on company press releases for qualitative themes [—].

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Credit Quality / ProvisionProvision $3.53M; NPA 0.78% Provision $3.13M; NPA 0.79% Provision $24.44M due to $21.55M fraud-related charge-off; NPA 0.71% Deteriorated due to isolated event; core metrics otherwise stable
Net Interest Margin3.74% (improving) 3.81% (further improvement) 3.80% (stable) Stabilizing near 3.8%
Loan GrowthModest growth; loans $7.95B Loans grew $129M; $8.07B Loans $8.24B; +$169M in Q3 Accelerating sequentially
Trust & WealthTrust fees $12.65M; AUM $10.86B Trust fees $12.75M; AUM $11.46B Trust fees $12.95M; AUM $12.05B Consistent growth
Mortgage$2.83M (soft volume) $4.13M (improved margins/volume) $4.38M (stronger origination volume) Improving
Capital & RepurchasesCET1 19.12% CET1 19.16%; plan renewed subsequently CET1 19.10%; repurchase capacity in place Strong/consistent

Management Commentary

  • “This quarter was impacted by a $21.55 million credit loss believed to be due to fraudulent activity associated with a commercial borrower…we believe this to be isolated…Despite this setback, our core earnings trends remain positive…” — F. Scott Dueser, Chairman & CEO .
  • Q2 tone: “Our outlook for the remainder of the year is good as we have opportunities to improve our investment yields, continue loan growth and focus on growing deposits in our markets.” — F. Scott Dueser .
  • Q1 tone: “Strong deposit inflows have supported loan growth…margin growth…Company remains financially strong, sound and secure…” — F. Scott Dueser .

Q&A Highlights

We did not find a Q3 2025 earnings call transcript or Q&A in our document catalog. As such, no Q&A highlights or guidance clarifications can be provided from a call record [—].

Estimates Context

  • Q3 2025 EPS: Actual $0.36 vs consensus $0.47; 5 EPS estimates contributed to the consensus *.
  • Q3 2025 Revenue (SPGI-defined): Actual $136.83M vs consensus $161.14M; 4 revenue estimates contributed to the consensus *.
  • Misses were driven by a one-time credit event: a $21.55M charge-off increasing provision to $24.44M, dampening net income despite stronger net interest income and stable margin .

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • One-time credit event overshadowed otherwise constructive fundamentals (NIM stability, loan/deposit growth, trust/mortgage momentum); monitor recovery trajectory and any spillover into classifications .
  • Core profitability remains resilient with NIM ~3.8% and improving efficiency; watch for continued balance sheet remix and security yield improvements into Q4 .
  • Asset quality metrics outside the event are steady-to-better (NPAs down sequentially to 0.71%); allowance/coverage ratios remain adequate at 1.29% of loans .
  • Capital is robust (CET1 19.10%); repurchase authorization of up to 5,000,000 shares provides optionality if valuation warrants deployment .
  • Deposit growth and tactical ICS deposits support funding flexibility; assess sustainability and pricing as rates evolve .
  • Expect Street models to reset lower near term given provision/charge-offs; upside depends on recovery outcomes and continued margin/loan growth execution .
  • Near-term trading likely keyed to clarity on fraud recovery and any updates on classified loans; medium-term thesis rests on stable NIM, asset quality normalization, and disciplined expense control .