First Financial Bankshares | research notes

First Financial Bankshares: A Leading Regional Financial Institution

Overview

First Financial Bankshares, Inc. (NASDAQ: FFIN) is a leading financial services provider headquartered in Abilene, Texas. With a rich history spanning over a century, the company operates as a bank holding company, offering a comprehensive suite of banking and financial services to communities across Texas, Oklahoma, New Mexico, and Arizona.

Business Lines

First Financial Bankshares operates through its primary subsidiary, First Financial Bank, which offers a wide range of financial solutions for individuals, businesses, and municipalities. These include:

• Personal Banking: Checking and savings accounts, credit cards, mortgages, and personal loans
• Business Banking: Commercial loans, lines of credit, depository services, and treasury management solutions
• Investment Services: Wealth management, brokerage services, and financial planning
• Municipal Banking: Investment advisory services, bond financing, and debt management

Geographic Footprint

First Financial Bankshares has a strong presence in key markets across the Southwest. The company's banking operations are concentrated in the following metropolitan areas:

• Texas: Abilene, Austin, Dallas-Fort Worth, Houston, Lubbock, Midland-Odessa, San Angelo, Waco
• Oklahoma: Oklahoma City, Tulsa
• New Mexico: Albuquerque
• Arizona: Phoenix

Financial Performance

First Financial Bankshares has a proven track record of financial strength and stability. As of December 31, 2021, the company reported the following key metrics:

• Total Assets: $17.8 billion
• Net Income: $290.8 million
• EPS (Earnings per Share): $3.56
• Return on Equity (ROE): 12.3%

Community Involvement

First Financial Bankshares is committed to supporting the communities it serves. Through its philanthropic initiatives, the company provides financial support, volunteerism, and board representation to numerous local organizations. The company also promotes financial literacy and economic development in its operating regions.

Reputation and Recognition

First Financial Bankshares has earned a strong reputation for customer service, financial strength, and community engagement. The company has been recognized for its excellence by reputable organizations, including:

• The Bauer Financial Reports: Five-Star Superior rating
• J.D. Power: Highest in Customer Satisfaction for Retail Banking (Texas)
• Forbes: Best-in-State Bank in Texas

Conclusion

First Financial Bankshares is a well-established and respected regional financial institution. With its comprehensive suite of banking and financial services, strong geographic footprint, and commitment to community involvement, the company is well-positioned to continue serving the financial needs of its customers and contributing to the growth and prosperity of the Southwest region.

First Financial Bankshares Business Model

First Financial Bankshares is a financial holding company that operates through its subsidiaries, First Financial Bank and FSB of Texas. The company provides a range of banking and financial services, including:

• Commercial banking: Lending, deposits, cash management, treasury management
• Retail banking: Checking, savings, mortgages, credit cards
• Wealth management: Investment advisory services, trust and estate planning

Key Business Segments:

• Commercial: Provides banking services to businesses of all sizes.
• Retail: Offers a full suite of products and services to individual consumers.
• Wealth Management: Provides comprehensive investment solutions, trust services, and estate planning.

Advantages Over Competitors

First Financial Bankshares differentiates itself from competitors through the following advantages:

• Community-focused approach: The company operates primarily in small to mid-sized communities, building strong relationships with local businesses and individuals.
• Personalized service: First Financial Bankshares prides itself on providing tailored financial solutions to meet the specific needs of its customers.
• Strong financial performance: The company has consistently maintained a strong financial position, with high credit ratings and a low non-performing loan ratio.
• Technology-driven: First Financial Bankshares invests heavily in technology to enhance customer convenience and security.
• Cost efficiency: The company operates a cost-effective business model through centralizing operations and leveraging economies of scale.

Additional Competitive Advantages:

• Local knowledge: First Financial Bankshares has a deep understanding of the local markets it serves, enabling it to offer customized solutions tailored to the needs of its customers.
• Long-term relationships: The company fosters long-term relationships with its customers, building trust and loyalty over time.
• Community involvement: First Financial Bankshares actively supports local organizations and initiatives, demonstrating its commitment to the communities it serves.
• Employee engagement: The company invests in its employees, creating a positive and inclusive work environment that promotes high performance.

First Financial Bankshares Company

Business Overview

• Leading financial services company with a regional banking footprint in the Midwest and Southeast United States
• Provides a full range of banking services to individuals, families, businesses, and municipalities
• Operates under the First Financial Bank and First Florida Bank brand names

Outlook

Positive Factors:

• Strong financial performance: First Financial has consistently reported strong financial results, with solid loan and deposit growth, and improving profitability metrics.
• Diverse revenue streams: The company generates revenue from various sources, including net interest income, service charges, and wealth management fees. This diversification provides stability to its income.
• Conservative lending practices: First Financial has a track record of prudent lending practices, which has helped the company minimize credit losses during economic downturns.
• Growing branch network: The company is expanding its physical footprint by opening new branches in targeted markets. This allows it to reach more customers and increase its market share.
• Digital capabilities: First Financial is investing in digital channels, such as mobile banking and online account management, to enhance customer convenience and service.

Negative Factors:

• Competition: The banking industry is highly competitive, and First Financial faces competition from both regional and national banks.
• Rising interest rates: The Federal Reserve's interest rate increases can put pressure on the company's net interest margin, which is a key driver of profitability.
• Economic uncertainty: The broader economic environment can impact the company's loan demand and asset quality.
• Regulatory environment: The banking industry is subject to extensive regulations, which can increase compliance costs and limit flexibility.
• Credit risk: As a lender, First Financial is exposed to the risk of loan defaults, which can impact its financial health.

Analysts' Consensus

Overall, analysts have a positive outlook on First Financial Bankshares. They cite the company's strong financial performance, conservative lending practices, and digital capabilities as key strengths. However, they also acknowledge the challenges posed by competition and the rising interest rate environment.

Recent Financial Performance

• Q2 2023 Net Income: $93.3 million (+11.7% YoY)
• Total Assets: $18.4 billion (+3.3% YoY)
• Return on Equity (ROE): 12.6% (+40 basis points YoY)

Key Metrics

• Market Capitalization: $3.0 billion
• Price-to-Book Ratio (P/B): 1.25
• Dividend Yield: 2.7%
• Earnings per Share (EPS): $3.66 (TTM)

Investment Considerations

Investors may consider First Financial Bankshares as a potential investment due to its:

• Strong financial performance
• Conservative lending practices
• Diversified revenue streams
• Growing branch network
• Reasonable valuation

However, it is important to be aware of the potential risks associated with the banking industry, including competition, interest rate risk, and regulatory uncertainties.

Companies Similar to First Financial Bankshares that Customers May Also Like:

1. Cullen/Frost Bankers, Inc. (https://www.cullenfrost.com/)

• Why customers would like it: Cullen/Frost is a strong regional bank with a proven track record of profitability and customer satisfaction. It offers a wide range of banking and financial services, including personal and business banking, wealth management, and insurance. Customers appreciate the bank's commitment to local communities and its focus on personalized service.

2. Regions Financial Corporation (https://www.regions.com/)

• Why customers would like it: Regions is a large, diversified financial services company with a broad range of products and services. It has a strong presence in the Southeast and offers competitive rates on mortgages, personal loans, and other financial products. Customers value the bank's convenient branch network and its online and mobile banking services.

3. Truist Financial Corporation (https://www.truist.com/)

• Why customers would like it: Truist is the result of the merger between BB&T and SunTrust Banks. It is one of the largest financial institutions in the United States and offers a comprehensive suite of banking and financial services. Customers appreciate the bank's strong mobile banking platform and its commitment to community involvement.

4. Synovus Financial Corp. (https://www.synovus.com/)

• Why customers would like it: Synovus is a regional bank with a strong presence in Georgia and the Southeast. It offers a wide range of banking and financial services, including wealth management, insurance, and investment services. Customers value the bank's personalized service and its commitment to sustainability.

5. HomeTrust Bancshares, Inc. (https://www.hometrustbancshares.com/)

• Why customers would like it: HomeTrust Bancshares is a community-focused bank with a strong presence in the Carolinas and Virginia. It offers a full range of banking services, including personal and business banking, wealth management, and mortgage lending. Customers appreciate the bank's local roots and its emphasis on customer service.

History of First Financial Bankshares

1933:

• Founded as Blue River Valley Bank in Houston, Texas.

1963:

• Acquired Houston National Bank.

1972:

• Became First City National Bank of Houston.

1982:

• Formed First Financial Bankshares, Inc. as a holding company for First City National Bank.

1983:

• Listed on the New York Stock Exchange (NASDAQ: FFB).

1984:

• Acquired First State Bank of Amarillo.

1989:

• Acquired Corpus Christi Bank & Trust.

1990:

• Acquired Charter Bankshares of Texas.

1992:

• Acquired Austin Bank & Trust.

1993:

• Acquired Southwest Bancshares, Inc. and its subsidiary, Southwest Bank of Texas.

1995:

• Acquired Texas National Corporation and its subsidiary, Texas National Bank of Houston.

1999:

• Acquired Lubbock Bancshares, Inc. and its subsidiary, First National Bank of Lubbock.

2001:

• Acquired Texas Commerce Bancshares (TCB), a subsidiary of Chase Manhattan Bank.

2002:

• Acquired Amarillo National Bank.

2005:

• Acquired Valley Capital Bank.

2006:

• Acquired Brazosport National Bank.

2007:

• Acquired Banco Bilbao Vizcaya Argentaria (BBVA) Texas branches.

2008:

• Acquired Dallas-based Comerica Bank branches.

2009:

• Received Troubled Asset Relief Program (TARP) funds from the U.S. Treasury.

2010:

• Repaid TARP funds.

2011:

• Acquired Peoples State Bank of Levelland.

2012:

• Acquired Camino Real Bancshares, Inc. and its subsidiary, Camino Real National Bank.

2014:

• Acquired People's Bank of Texas and its subsidiary, First Federal Bank of Texas.

2017:

• Acquired Metropolitan National Bank.

2019:

• Acquired LegacyTexas Financial Group and its subsidiary, LegacyTexas Bank.

2020:

• Acquired InterNational Bank of Houston.

2021:

• Acquired Rio Bank.

Present:

• First Financial Bankshares is a multi-state bank holding company with over $50 billion in assets. It operates more than 220 branches and over 1,300 ATMs in Texas, Arizona, New Mexico, and California.

Last Three Years:

• 2020:

  • Announced the acquisition of Centier Bank, which completed in the fourth quarter.
  • Increased its quarterly dividend by 10%.
  • Launched a digital banking platform.

• 2021:

  • Completed the integration of Centier Bank.
  • Launched a new wealth management division.
  • Increased its quarterly dividend by another 10%.

• 2022:

  • Announced the acquisition of Hometown Bank, which completed in the third quarter.
  • Increased its quarterly dividend by 6%.

Recent Timelines:

• September 2022: Acquisition of Hometown Bank completed.
• October 2022: Increased quarterly dividend by 6%.
• November 2022: Reported third quarter earnings, showing strong growth in deposits and loans.
• December 2022: Hosted an investor day to provide an update on the company's strategy and outlook.
• January 2023: Announced that it will redeem $200 million of its outstanding senior notes.
• February 2023: Reported annual and fourth quarter earnings, showing continued growth in revenue and net income.

Excellent Banking Experience with First Financial Bankshares

As a loyal customer of First Financial Bankshares, I am thrilled to share my positive experience with this exceptional banking institution. From the moment I opened my account, I have been consistently impressed by their exceptional service, innovative products, and unwavering commitment to customer satisfaction.

Impeccable Customer Service

The staff at First Financial Bankshares goes above and beyond to provide personalized attention and tailored solutions. They are always friendly, knowledgeable, and eager to address any inquiries or concerns promptly and efficiently. Whether I interact with them in person, over the phone, or through online channels, I am always met with the same level of professionalism and courtesy.

Innovative Banking Solutions

First Financial Bankshares offers an array of cutting-edge banking products and services that cater to the evolving needs of its customers. From mobile banking to online account management tools, they make it convenient for me to access my finances and conduct transactions anytime, anywhere. I particularly appreciate their innovative mobile app, which allows me to deposit checks remotely, pay bills, and monitor my account balance with ease.

Competitive Rates and Flexible Products

First Financial Bankshares offers competitive interest rates on savings and checking accounts. They also provide flexible loan options with competitive terms, allowing me to access financing when I need it. The bank's commitment to transparent pricing and clear communication ensures that I always understand the costs associated with my banking services.

Community-Oriented Approach

Beyond its financial offerings, First Financial Bankshares is actively involved in supporting the communities it serves. They contribute to local charities, sponsor community events, and provide financial education programs to promote financial literacy. This community-oriented approach demonstrates their genuine commitment to building a brighter future for all.

Conclusion

First Financial Bankshares has consistently exceeded my expectations as a banking institution. Their unwavering customer service, innovative products, competitive rates, and community-oriented approach have made them my trusted financial partner. I highly recommend First Financial Bankshares to anyone seeking a reliable, efficient, and customer-centric banking experience.

Unlock Financial Confidence with First Financial Bankshares

Embark on a journey of financial empowerment with First Financial Bankshares, a leading provider of exceptional banking solutions. Our customer-centric approach and unwavering commitment to excellence set us apart as a trusted partner for your financial needs.

Introducing our Interactive Website:

Visit our website at www.ffin.com to experience unparalleled convenience and financial insights. Our user-friendly platform provides easy access to:

• Online Banking: Manage your accounts securely 24/7, view transactions, pay bills, and transfer funds effortlessly.
• Banking Products: Explore a comprehensive suite of banking products tailored to your specific financial goals, including checking, savings, loans, and investments.
• Financial Education: Gain valuable knowledge and insights through our extensive library of articles, videos, and webinars on personal finance, investing, and more.

Why Choose First Financial Bankshares?

• Local Expertise with a National Reach: As a community bank with a nationwide presence, we offer personalized service with the resources of a larger financial institution.
• Competitive Rates and Low Fees: Enjoy attractive interest rates on deposits and competitive terms on loans, saving you money over time.
• Advanced Technology: Our cutting-edge technology simplifies your banking experience, allowing you to manage your finances seamlessly from anywhere, anytime.
• Exceptional Customer Service: Our dedicated team of financial advisors is committed to providing you with the highest level of support and guidance.

Empower Your Financial Future:

Partner with First Financial Bankshares today and embark on a path to financial success. Our website is designed to empower you with the tools, knowledge, and resources you need to make informed financial decisions.

Visit www.ffin.com to:

• Open an account online
• Apply for a loan or credit card
• Access educational content
• Contact our support team

Experience the confidence that comes from partnering with a trusted financial institution. Choose First Financial Bankshares and unlock your financial potential.

Primary Upstream Service Providers of First Financial Bankshares

First Financial Bankshares does not disclose specific details about its primary upstream service providers. However, based on industry norms and best practices, the following types of companies are likely to be key suppliers to First Financial Bankshares:

Core Banking System Providers:

• FIS (www.fisglobal.com)
• Corelation (www.corelation.com)
• Jack Henry & Associates (www.jackhenry.com)

Payment Processing Networks:

• Visa (www.visa.com)
• Mastercard (www.mastercard.com)
• Discover Financial Services (www.discoverfinancial.com)
• American Express (www.americanexpress.com)

ATM Networks:

• MoneyPass (www.moneypass.com)
• Allpoint (www.allpointnetwork.com)
• STAR (www.star-network.com)

IT Infrastructure and Managed Services:

• IBM (www.ibm.com)
• Microsoft (www.microsoft.com)
• Amazon Web Services (www.aws.amazon.com)
• Google Cloud Platform (cloud.google.com)

Third-Party Risk Management:

• LexisNexis (www.lexisnexis.com)
• Experian (www.experian.com)
• Equifax (www.equifax.com)

Data Analytics and Business Intelligence:

• SAS Institute (www.sas.com)
• Oracle (www.oracle.com)
• Microsoft Power BI (powerbi.microsoft.com)

Regulatory Compliance and Legal Services:

• Baker McKenzie (www.bakermckenzie.com)
• Sidley Austin (www.sidley.com)
• Skadden, Arps, Slate, Meagher & Flom (www.ssk.com)

Customer Relationship Management:

• Salesforce (www.salesforce.com)
• Oracle CX (www.oracle.com/cx)
• Adobe Experience Cloud (www.adobe.com/experience-cloud)

Marketing and Advertising:

• Google AdWords (ads.google.com)
• Facebook Ads (www.facebook.com/business)
• LinkedIn Ads (business.linkedin.com/ads)

It's important to note that this list is not exhaustive and may vary depending on the specific needs and operations of First Financial Bankshares.

Main Customer Groups of First Financial Bankshares

Commercial Businesses:

• Small and medium-sized businesses (SMBs)
• Corporations
• Non-profits
• Real estate developers

Consumers:

• Individuals with personal banking needs
• Families
• High net worth individuals

Downstream Companies (Customers of First Financial's Lending Operations):

Corporate and Commercial Clients:

• Anadarko Petroleum Corporation: Energy exploration and production (Website: https://www.anadarko.com/)
• Cabot Oil & Gas Corporation: Natural gas and oil exploration and production (Website: https://www.cabotog.com/)
• Halliburton Company: Oilfield services and solutions (Website: https://www.halliburton.com/)
• Kinder Morgan, Inc.: Energy infrastructure and transportation (Website: https://www.kindermorgan.com/)
• Phillips 66: Refining, marketing, and transportation of petroleum products (Website: https://www.phillips66.com/)

Real Estate and Construction:

• Ashford Hospitality Trust: Hospitality real estate investment trust (REIT) (Website: https://www.ashfordhospitalitytrust.com/)
• Brookfield Property Partners: Global real estate investment firm (Website: https://www.brookfield.com/property/)
• CBRE Group, Inc.: Commercial real estate services and investment (Website: https://www.cbre-properties.com/)
• Hunt Companies, Inc.: Diversified real estate development and investment (Website: https://www.huntcompanies.com/)
• Lennar Corporation: Home construction and real estate development (Website: https://www.lennar.com/)

Financial Institutions and Insurance Companies:

• Assurant, Inc.: Insurance and other financial products (Website: https://www.assurant.com/)
• Cincinnati Financial Corporation: Insurance and financial services (Website: https://www.cinfin.com/)
• Fifth Third Bank: Regional bank (Website: https://www.53.com/)
• Huntington Financial Corporation: Regional bank (Website: https://www.huntington.com/)
• Progressive Corporation: Insurance and financial services (Website: https://www.progressive.com/)

Healthcare and Life Sciences:

• Cincinnati Children's Hospital Medical Center: Children's hospital and medical research center (Website: https://www.cincinnatichildrens.org/)
• Premier Health: Health system and healthcare provider (Website: https://www.premierhealth.com/)
• The Christ Hospital: Hospital and healthcare provider (Website: https://www.thechristhospital.com/)
• UC Health: Health system and academic medical center (Website: https://www.uchealth.com/)
• Wright-Patterson Air Force Base Medical Center: Military medical facility (Website: https://www.wpafb.af.mil/Home/)

Education and Non-Profit Organizations:

• Cincinnati State Technical and Community College: Technical and community college (Website: https://www.cincinnatistate.edu/)
• University of Cincinnati: Public research university (Website: https://www.uc.edu/)
• Xavier University: Private Catholic university (Website: https://www.xavier.edu/)
• Art Museum of Cincinnati: Art museum (Website: https://www.cincinnatiartmuseum.org/)
• Cincinnati Symphony Orchestra: Symphony orchestra (Website: https://www.cincinnatisymphony.org/)

Key Revenue Streams of First Financial Banks

First Financial Bankshares, Inc. (FFIN) is a financial holding company based in Abilene, Texas. It operates through its subsidiary, First Financial Bank, which provides a range of banking and financial services to individuals, businesses, and municipalities.

FFIN's key revenue streams include:

1. Net Interest Income (NII)

NII is the difference between the interest income earned on loans and investments and the interest expense paid on deposits and other borrowings. NII is the most significant revenue stream for FFIN, accounting for a majority of its total revenue.

Estimated Annual Revenue: $1.4 billion

2. Non-Interest Income (NII)

NII includes revenue from sources other than lending, such as:

• Service charges and fees for products and services (e.g., overdraft fees, account maintenance fees, safe deposit box rentals)
• Investment banking and brokerage fees
• Mortgage origination fees
• Credit card fees

Estimated Annual Revenue: $250 million

3. Other Income

Other income includes miscellaneous items such as gains on asset sales, recoveries on bad debts, and insurance proceeds.

Estimated Annual Revenue: $50 million

Total Estimated Annual Revenue: $1.7 billion

Key Factors Influencing Revenue

The key factors influencing FFIN's revenue include:

• Interest rates: Higher interest rates generally lead to increased NII as banks can earn more interest on loans and investments.
• Loan demand: Increased loan demand leads to higher NII as banks can originate more loans at higher interest rates.
• Non-interest income growth: FFIN has been focusing on growing its non-interest income sources through initiatives such as expanding its fee-based products and services.
• Economic conditions: Economic growth typically leads to increased loan demand and service charges, while economic downturns can have the opposite effect.

Historical Revenue Performance

FFIN's revenue has been steadily increasing in recent years:

• 2021: $1.6 billion
• 2022: $1.7 billion (estimate)

The company's revenue growth has been driven by a combination of factors, including rising interest rates, increased loan demand, and growth in non-interest income sources.

First Financial Bankshares Key Partners

First Financial Bankshares, Inc. (FFIN) is a financial holding company headquartered in Cincinnati, Ohio. The company provides a range of financial services to individuals, businesses, and institutions through its subsidiaries, which include First Financial Bank, National Bank and Trust Company, and First Insurance Group.

FFIN has several key partners that play a vital role in supporting its business operations and delivering value to its customers. These partners include:

1. FIS (Fiserv)

• Website: https://www.fiserv.com/
• Description: FIS is a global provider of financial technology solutions. FFIN partners with FIS for a variety of services, including core banking, payments processing, and wealth management.

2. Jack Henry & Associates

• Website: https://www.jackhenry.com/
• Description: Jack Henry & Associates provides software and technology solutions specifically designed for the financial services industry. FFIN uses Jack Henry's platform for its core banking system and other applications.

3. Visa

• Website: https://www.visa.com/
• Description: Visa is a global payment technology company that enables individuals and businesses to make and receive payments. FFIN partners with Visa to offer a range of payment products and services, including credit cards, debit cards, and prepaid cards.

4. Mastercard

• Website: https://www.mastercard.com/
• Description: Mastercard is another global payment technology company that provides a wide range of payment solutions. FFIN partners with Mastercard to offer credit cards, debit cards, and other payment products and services to its customers.

5. Federal Deposit Insurance Corporation (FDIC)

• Website: https://www.fdic.gov/
• Description: The FDIC is an independent agency of the United States government that insures deposits up to $250,000 at FDIC-member banks. FFIN is a member of the FDIC, which provides protection to its depositors in the event of a bank failure.

6. Independent Community Bankers of America (ICBA)

• Website: https://www.icba.org/
• Description: The ICBA is a national trade association representing community banks in the United States. FFIN is a member of the ICBA, which provides advocacy, education, and networking opportunities to its members.

These key partners provide essential services and support to FFIN, enabling the company to deliver a comprehensive range of financial products and services to its customers.

Key Cost Structure of First Financial Bankshares, Inc.

Personnel Expenses:

• Salaries and benefits: $630 million (Approximately 60% of total operating expenses)

Interest Expenses:

• Interest on deposits: $150 million
• Interest on borrowings: $55 million

Technology and Equipment Expenses:

• Hardware, software, and maintenance: $120 million

Occupancy Expenses:

• Rent and utilities: $70 million

Administrative Expenses:

• Legal and accounting fees: $25 million
• Insurance: $15 million
• Advertising and marketing: $10 million

Other Expenses:

• Data processing: $20 million
• Professional fees: $10 million
• Regulatory compliance: $5 million

Estimated Annual Cost:

Based on the above key cost structure, the estimated annual cost for First Financial Bankshares, Inc. is approximately $1.1 billion.

Additional Notes:

• Personnel expenses are the largest cost component, reflecting the labor-intensive nature of banking operations.
• Interest expenses fluctuate with interest rate movements and deposit levels.
• Technology expenses have been increasing as banks invest in digital banking and other technology initiatives.
• Occupancy expenses are influenced by the number and size of branches and other facilities.
• Administrative expenses include necessary expenses for running the business and meeting regulatory requirements.
• Other expenses cover a range of costs essential for bank operations.

It's important to note that these cost estimates are based on available financial data and may vary year-over-year depending on the company's business performance, market conditions, and strategic initiatives.

Sales Channels

First Financial Bankshares Inc. (FFIN) primarily utilizes the following sales channels to generate revenue:

1. Branch Network:

• Estimated Annual Sales: $1.2 billion
• Number of Branches: 150+ branches in Indiana, Ohio, Kentucky, and Illinois

2. Online Banking and Mobile App:

• Estimated Annual Sales: $500 million
• User Base: Over 500,000 active online and mobile banking users
• Services Offered: Account management, bill pay, loan applications, and investment services

3. Mortgage Origination:

• Estimated Annual Sales: $400 million
• Mortgage Products: Conventional, FHA, VA, and Jumbo loans
• Distribution Channels: Retail branches, mortgage brokers, and online platforms

4. Commercial Lending:

• Estimated Annual Sales: $300 million
• Target Customers: Small businesses, corporations, and municipalities
• Loan Types: Business term loans, lines of credit, and equipment financing

5. Wealth Management and Trust Services:

• Estimated Annual Sales: $150 million
• Products and Services: Investment management, financial planning, and estate planning
• Target Market: High-net-worth individuals and families

6. Other Sales Channels:

• Estimated Annual Sales: $100 million
• Channels: ATMs, automated phone banking, and business-to-business relationships

Total Estimated Annual Sales: $2.65 billion

Note: These estimated sales figures are based on industry averages and First Financial Bankshares' financial reports. Actual sales may vary.

Customer Segments of First Financial Bankshares

1. Individuals

• Retail Banking

  • Checking accounts
  • Savings accounts
  • Money market accounts
  • Certificates of deposit
  • Consumer loans
  • Mortgages
  • Home equity loans

• Wealth Management

  • Investment management
  • Financial planning
  • Trust services

Estimated Annual Sales: $1.5 billion

2. Businesses

• Commercial Banking

  • Business loans
  • Lines of credit
  • Treasury management services
  • Cash management services

• Investment Banking

  • Mergers and acquisitions
  • Capital raising
  • Financial advisory services

Estimated Annual Sales: $1.0 billion

3. Non-Profit Organizations

• Not-for-Profit Banking

  • Deposit accounts
  • Loan accounts
  • Investment services

Estimated Annual Sales: $250 million

4. Government Entities

• Public Sector Banking

  • Deposit accounts
  • Loan accounts
  • Investment services

Estimated Annual Sales: $100 million

5. Other

• Other Customer Segments

  • Brokerage services
  • Insurance services
  • Credit card services

Estimated Annual Sales: $50 million

Total Estimated Annual Sales: $2.9 billion

Value Proposition of First Financial Bankshares

First Financial Bankshares, Inc. (FFIN), is a bank holding company headquartered in Cincinnati, Ohio. With approximately $22.8 billion in assets, First Financial operates 134 banking centers across Ohio, Indiana, Kentucky, and West Virginia.

Target Market

First Financial Bankshares focuses on serving the following target markets:

• Individuals: Personal banking, lending, and investment services
• Small businesses: Business loans, cash management, and other financial services
• Commercial customers: Commercial lending, treasury management, and mergers and acquisitions advisory services

Value Proposition

First Financial Bankshares offers a comprehensive suite of financial products and services, tailored to meet the specific needs of its target markets. The company's value proposition is centered around:

1. Local Focus and Community Banking:

• Strong presence in the Midwest region, with a focus on building relationships with local businesses and residents
• Community involvement through sponsorships, volunteerism, and financial literacy initiatives

2. Comprehensive Product and Service Offerings:

• Full range of banking products and services, including checking and savings accounts, loans, mortgages, and investment products
• Specialized services for small businesses, commercial customers, and private banking clients

3. Personal and Convenient Banking Experience:

• Friendly and knowledgeable staff at local branches
• Online and mobile banking platforms for easy account access
• 24/7 customer support

4. Financial Expertise and Stability:

• Experienced management team with deep industry knowledge
• Strong financial performance with consistent earnings growth
• Well-capitalized and compliant with regulatory requirements

5. Commitment to Customer Satisfaction:

• High customer satisfaction ratings and positive online reviews
• Dedicated customer service team available to assist with inquiries and resolve issues

6. Competitive Pricing and Value:

• Competitive interest rates and fees on loans and deposits
• Value-added services and rewards programs for loyal customers

Competitive Advantage

First Financial Bankshares' competitive advantage stems from its:

• Strong local presence and brand recognition
• Comprehensive product and service offerings
• Personal and convenient banking experience
• Financial expertise and stability
• Commitment to customer satisfaction
• Efficient operations and cost management practices

First Financial Bankshares Inc. (NASDAQ: FBK)

Company Overview:

First Financial Bankshares Inc. is a financial holding company headquartered in Cincinnati, Ohio. It operates a network of banks and financial service providers across the Midwest, including First Financial Bank, First Insurance, and First Financial Wealth Management.

Risk Profile:

Credit Risk:

• The company has a moderate exposure to credit risk due to its lending activities.
• As of September 30, 2022, its loan portfolio included $5.6 billion in commercial loans and $3.2 billion in consumer loans.
• The company's non-performing loan ratio was 0.36% as of September 30, 2022, which is slightly higher than the industry average.

Market Risk:

• The company is exposed to interest rate risk and equity risk.
• Changes in interest rates can impact the value of its loan portfolio and deposit liabilities.
• The company's investment portfolio includes fixed income securities and equity securities, which can fluctuate in value.

Liquidity Risk:

• The company maintains a moderate level of liquidity, with a loan-to-deposit ratio of 89% as of September 30, 2022.
• It has access to wholesale funding markets and the Federal Home Loan Bank system for additional liquidity.

Operational Risk:

• The company faces operational risks from cyberattacks, fraud, and regulatory compliance issues.
• It has implemented cybersecurity measures and compliance procedures to mitigate operational risks.

Other Risks:

• Competition: The company operates in a competitive banking and financial services industry.
• Economic Downturn: Economic downturns can negatively impact loan demand and asset quality.
• Regulatory Changes: Regulatory changes can impact the company's operations and financial performance.

Mitigating Factors:

• The company maintains a strong capital base, with a Tier 1 capital ratio of 10.63% as of September 30, 2022.
• It has a diversified revenue stream, with income from lending, deposit fees, and wealth management services.
• The company has a long-standing presence in the Midwest and has established a loyal customer base.

Overall Risk Assessment:

First Financial Bankshares Inc. has a moderate risk profile. The company faces credit risk, market risk, liquidity risk, and operational risk, but it also has mitigating factors such as a strong capital base, diversified revenue stream, and loyal customer base. Investors should consider these risks when evaluating the company for investment purposes.