Executive Summary

Solid quarter with accelerating momentum: diluted EPS rose to $0.43, up 10% q/q and 34% y/y; net interest margin expanded 17 bps q/q to 3.67% on balance-sheet remix and earning-asset growth .
Loan growth remained strong: loans HFI reached $7.91B, +2.5% q/q (+9.8% annualized) and +10.7% y/y; deposits grew to $12.10B, up $0.96B y/y, supporting higher NII of $116.1M (+8.4% q/q, +19.1% y/y) .
Credit remained manageable with ACL at 1.24% of loans; provision fell to $1.0M from $6.1M in Q3, while NPA ratio improved slightly q/q to 0.80% (vs 0.83% in Q3), though up vs 0.49% a year ago .
Equity dipped q/q on OCI pressure from higher long rates (AOCI unrealized loss -$424.3M vs -$329.8M in Q3), partially offsetting retained earnings; efficiency ratio improved y/y to 46.8% from 52.0% on stronger NII and absence of securities losses .
S&P Global consensus (EPS/Revenue) was unavailable via API at time of analysis; we cannot classify beats/misses versus Street for this quarter. Values would be from S&P Global if available.*

What Went Well and What Went Wrong

What Went Well

Net interest margin inflected higher to 3.67% from 3.50% in Q3 and 3.33% in Q4’23, as securities cash flows were redeployed into higher-yielding loans and earning assets expanded (avg IEA $12.86B vs $12.48B in Q3) .
Broad-based fee momentum: trust fees +8% q/q and +19% y/y on AUM growth to $10.83B; mortgage income $3.01M vs $1.94M y/y; debit card fees +$482K y/y .
Management highlighted sustained momentum entering 2025, citing growth in earning assets/funding sources and margin improvement: “We are very pleased…strong growth in earnings, loans and deposits…improvement in our margin” — F. Scott Dueser, CEO .

What Went Wrong

Other comprehensive income (securities AOCI) deteriorated with unrealized losses at -$424.3M vs -$329.8M in Q3 due to a rise in longer-term rates, reducing shareholders’ equity to $1.61B from $1.66B in Q3 .
Credit normalization: net charge-offs increased to $1.94M (vs $0.79M in Q3), and classified loans rose to $233.85M vs $176.21M a year ago; NPA ratio at 0.80% vs 0.49% a year ago .
Operating costs stepped up q/q to $70.10M (profit sharing/bonus accruals; growth investments in middle market lending, audit/risk), leading to a slight q/q efficiency ratio uptick to 46.81% from 46.45% (but improved vs 51.97% y/y) .

Financial Results

Income statement and profitability (oldest → newest)

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Net Interest Income ($M)	97.51	103.27	107.11	116.12
Noninterest Income ($M)	21.98	31.27	32.36	30.98
Net Income ($M)	45.98	52.49	55.31	62.32
Diluted EPS ($)	0.32	0.37	0.39	0.43
Net Interest Margin (TE)	3.33%	3.48%	3.50%	3.67%
Efficiency Ratio	51.97%	47.41%	46.45%	46.81%
ROAA	1.42%	1.61%	1.66%	1.81%
ROAE	14.26%	14.43%	14.00%	15.17%
Avg Interest-Earning Assets ($B)	11.93	12.23	12.48	12.86

Notes: “TE” = tax-equivalent; Q4 2023 avg IEA from period table embedded with Q4 2024 exhibit .

Balance sheet (end of period; oldest → newest)

Metric	Dec 31, 2023	Jun 30, 2024	Sep 30, 2024	Dec 31, 2024
Total Assets ($B)	13.11	13.16	13.58	13.98
Loans HFI ($B)	7.15	7.52	7.72	7.91
Total Deposits ($B)	11.14	11.41	11.76	12.10
Repurchase Agreements ($B)	0.38	0.14	0.06	0.06
Borrowings ($B)	0.02	0.024	0.026	0.136
Shareholders’ Equity ($B)	1.50	1.52	1.66	1.61

Credit quality and reserves

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Provision for Credit Losses ($M)	0.00	5.89	6.12	1.00
Net Charge-offs ($M)	0.98	0.30	0.79	1.94
ACL ($M)	88.73	95.17	99.94	98.33
ACL / Loans (%)	1.24%	1.27%	1.29%	1.24%
Nonperforming Assets ($M)	35.10	61.19	64.42	63.10
NPA Ratio (% of Loans+REO)	0.49%	0.81%	0.83%	0.80%
Classified Loans ($M)	176.21	219.26	229.92	233.85

Fee income mix (selected)

Metric	Q4 2023	Q3 2024	Q4 2024
Trust Fees ($M)	10.68	11.69	12.66
Mortgage Gain-on-Sale & Fees ($M)	1.94	3.36	3.01
Debit Card Fees ($M)	5.02	5.53	5.51
AUM (Trust) ($B, period-end)	9.78	10.86	10.83

Guidance Changes

FFIN did not provide quantitative guidance in the Q4 release or 8-K. Dividend remained $0.18 per share for the quarter.

Metric	Period	Previous Guidance	Current Guidance	Change
Quantitative revenue/EPS guidance	FY/Quarter	None disclosed	None disclosed	Maintained (no guidance)
Quarterly Dividend ($/sh)	Q4 2024	$0.18 (Q3’24)	$0.18 (Q4’24 declared)	Maintained

Earnings Call Themes & Trends

Note: We could not locate a Q4 2024 earnings call transcript in the document set; themes below are synthesized from company releases across quarters.

Topic	Q2 2024 (Prev-2)	Q3 2024 (Prev-1)	Q4 2024 (Current)	Trend
Net Interest Margin	NIM 3.48%; improving via asset remix toward loans	NIM 3.50%; further expansion	NIM 3.67%; strong sequential expansion	Improving
Loan Growth	+$290M q/q; 16.2% annualized	+$203M q/q; 10.8% annualized	+$190M q/q; 9.8% annualized	Sustained, moderating pace
Deposits/Funding	Deposits $11.41B; y/y growth	Deposits $11.76B; +$265M q/q	Deposits $12.10B; +$343M q/q	Positive
Fee Income (Trust, Mortgage)	Trust +$1.83M y/y; Mortgage up q/q/y/y	Trust +16% y/y; Mortgage modest softness y/y	Trust +8% q/q; Mortgage +55% y/y	Positive
Credit Quality	Nonperformers up q/q due to one DFW CRE loan; ACL 1.27%	NPA 0.83%; ACL 1.29%	NPA 0.80%; ACL 1.24%; NCOs up	Normalizing
OCI/Securities	Unrealized losses -$403.3M YE’23; -$441.6M at 6/30	Unrealized losses improved to -$329.8M	Unrealized losses widened to -$424.3M	Rate-sensitive

Management Commentary

“We finished 2024 with strong growth in earnings, loans and deposits…growing our earning assets and funding sources while seeing improvement in our margin. As we enter 2025, we will continue to remain focused on maintaining this momentum…” — F. Scott Dueser, Chairman and CEO .
Operating expense commentary: salary/benefit costs rose on profit sharing/bonus accruals and investments in middle market lending and audit/risk; non-salary opex up on software, occupancy, and professional fees, partially offset by lower FDIC special assessment y/y .
Fee drivers: trust AUM reached $10.83B (vs $9.78B y/y) supporting trust fees; mortgage income up on higher volumes; debit card fees increased y/y .

Q&A Highlights

The Q4 2024 earnings call transcript was not available in the document set; therefore, Q&A specifics and any in-call guidance clarifications could not be assessed from primary sources in this analysis window.

Estimates Context

S&P Global (Capital IQ) consensus for Q4 2024 EPS and revenue was unavailable via API at the time of request due to request limits; as a result, we cannot quantify beats/misses vs Street for this quarter. If provided, consensus benchmarks would be sourced from S&P Global.*

Key Takeaways for Investors

Positive operating momentum: faster NIM expansion to 3.67% and sequential NII strength signal beneficial balance-sheet remix and improved asset yields .
Growth sustained: loans +10.7% y/y and deposits +8.6% y/y (deposits), supporting top-line resilience and funding stability into 2025 .
Credit normalizing but contained: NCOs rose q/q and NPAs elevated vs last year; ACL at 1.24% provides cushion as classified loans remain higher y/y .
OCI remains a swing factor: longer-duration securities AOCI widened in Q4 on higher long rates, pressuring equity/TCE despite strong earnings; rate path will influence reported capital metrics near term .
Expense discipline vs growth investment: opex rose on incentives and strategic hires; efficiency improved y/y as revenue outpaced costs — monitor operating leverage if growth slows .
Fees provide ballast: trust fee momentum (AUM growth) and recovering mortgage activity diversify revenue beyond NII .
Near-term focus: watch 1) NIM trajectory as securities continue to roll into loans, 2) credit trends in CRE/residential portfolios, and 3) AOCI sensitivity to rate moves — all likely stock catalysts post-print .

Footnotes:

S&P Global consensus data unavailable via API at analysis time. Values would be retrieved from S&P Global.

FIRST FINANCIAL BANKSHARES INC (FFIN)·Q4 2024 Earnings Summary