First Financial Bankshares Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 17 July 2026: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Second-quarter net income rose year over year: Net income was $71.89 million, against $66.66 million a year earlier and $71.54 million in the first quarter. Basic and diluted EPS were $0.50, against $0.47 a year earlier and $0.50 in the linked quarter. Source
• Net interest income grew year over year: Net interest income was $136.91 million, up from $123.73 million a year earlier and $134.79 million in the first quarter. Average interest-earning assets were $14.46 billion. Source
• Margin widened on lower deposit costs: Management said the tax-equivalent margin of 3.90 percent benefited from lower deposit costs and higher securities yields over the past year. Source
• Noninterest expense rose year over year: Noninterest expense was $81.11 million, up from $71.74 million a year earlier and $76.77 million in the first quarter. Salary, commission and benefit costs were $49.66 million. Source
• Nonperforming assets rose from first quarter: Nonperforming assets were 0.80 percent of loans and foreclosed assets, up from 0.66 percent in the first quarter. Nonaccrual loans rose to $63.31 million from $52.13 million. Source
• Deposits lower on municipal balances: Deposits and repurchase agreements totaled $13.17 billion, down $234.85 million year to date on lower municipal balances. Deposits excluding public funds rose $149.57 million year to date. Source

“As we look ahead, we remain focused on disciplined growth, prudent risk management and creating long term value for shareholders.”

David Bailey, President and CEO

What changed from last quarter

• New: David Bailey is named President and CEO in this release. The prior release named F. Scott Dueser as Chairman and CEO. Source
• New: The operating unit previously named First Financial Trust and Asset Management Company is now named First Financial Wealth Management, with nine locations. Source

Earnings and growth drivers

• Second-quarter net income rose year over year: Net income was $71.89 million, against $66.66 million a year earlier and $71.54 million in the first quarter. Basic and diluted EPS were $0.50, against $0.47 a year earlier and $0.50 in the linked quarter. Source
• Six-month net income and EPS higher: Net income for the six months ended June 30, 2026 was $143.44 million, against $128.00 million a year earlier. Diluted EPS for the six months was $1.00, against $0.89. Source
• Return on equity eased year over year: Return on average equity was 14.70 percent in the quarter, against 15.82 percent a year earlier and 14.83 percent in the first quarter. Source

Net interest income and margin

• Net interest income grew year over year: Net interest income was $136.91 million, up from $123.73 million a year earlier and $134.79 million in the first quarter. Average interest-earning assets were $14.46 billion. Source
• Margin widened on lower deposit costs: Management said the tax-equivalent margin of 3.90 percent benefited from lower deposit costs and higher securities yields over the past year. Source
• Loan and securities yields edged higher: The average loan yield was 6.70 percent, against 6.67 percent in the first quarter, on average loans of $8.32 billion. Source

“We appreciate the dedication of our associates across Texas and their commitment to serving our customers and communities with excellence.”

David Bailey, President and CEO

Fee income and wealth management

• Noninterest income rose year over year: Noninterest income was $35.84 million, against $32.87 million a year earlier and $32.10 million in the linked quarter. Source
• Wealth fees tied to assets and oil: Wealth management fees were $13.96 million on assets under management of $12.23 billion. The linked-quarter rise reflected mineral fee revenue from recent higher oil prices. Source
• Mortgage income rose on higher volume: Mortgage income was $4.68 million, up from $4.13 million a year earlier. The company cited restructuring, new lenders, centralized operations and higher originated loan volume. Source
• Other income reflected plan asset values: Other noninterest income was $5.02 million, reflecting higher fair value of supplemental retirement plan assets, with offsetting deferred compensation in salaries. Life insurance proceeds of about $200 thousand were also received. Source
• Service charges edged up: Service charges on deposits were $6.26 million, against $6.13 million a year earlier, with higher deposit account fees offset by lower overdraft fees. Source

Expenses and efficiency

• Noninterest expense rose year over year: Noninterest expense was $81.11 million, up from $71.74 million a year earlier and $76.77 million in the first quarter. Salary, commission and benefit costs were $49.66 million. Source
• Pay increases and incentives lifted salaries: Salary costs rose on merit and market pay increases effective March 1, higher profit sharing and incentive accruals, and mortgage incentives tied to higher loan volumes. Source
• Software and professional fees rose: Non-salary expenses rose $2.29 million year over year and $660 thousand from the linked quarter, mainly on software amortization and professional fees. Source
• Efficiency ratio edged higher: The efficiency ratio was 45.94 percent, against 44.97 percent a year earlier and 44.98 percent in the first quarter. Source

Credit quality and reserves

• Provision rose; net recoveries recorded: The provision for credit losses was $4.18 million, against $3.13 million a year earlier and $2.29 million in the first quarter. Net recoveries were $600 thousand, against net charge-offs of $720 thousand a year earlier. Source
• Allowance rose to 1.35 percent: The allowance for credit losses was $112.43 million, or 1.35 percent of loans, up from 1.27 percent a year earlier. The reserve for unfunded commitments was $6.21 million. Source
• Nonperforming assets rose from first quarter: Nonperforming assets were 0.80 percent of loans and foreclosed assets, up from 0.66 percent in the first quarter. Nonaccrual loans rose to $63.31 million from $52.13 million. Source
• Classified loans above year-earlier level: Classified loans were $283.10 million, against $257.07 million a year earlier and $289.76 million in the first quarter. Source

Loans and deposits

• Loans grew 4.66 percent annualized YTD: Loans were $8.35 billion, against $8.07 billion a year earlier. Year-to-date loan growth was $188.66 million, or 4.66 percent annualized. Source
• Municipal loans up, C&I down: Municipal loans rose to $419.07 million from $384.47 million in the first quarter, while commercial and industrial loans fell to $1.09 billion from $1.15 billion. Source
• Deposits lower on municipal balances: Deposits and repurchase agreements totaled $13.17 billion, down $234.85 million year to date on lower municipal balances. Deposits excluding public funds rose $149.57 million year to date. Source
• Total assets above year-earlier level: Total assets were $15.31 billion, against $14.38 billion a year earlier and $15.39 billion at March 31, 2026. Source

Capital and returns to shareholders

• Shareholders' equity rose to $2.00 billion: Shareholders' equity was $2.00 billion, up from $1.74 billion a year earlier and $1.94 billion in the first quarter. Source
• Capital ratios higher than a year ago: The common equity Tier 1 ratio was 20.40 percent, up from 20.23 percent in the first quarter and 19.16 percent a year earlier. Source
• Securities unrealized loss narrowed: The after-tax unrealized loss on the securities portfolio was $279.67 million, against $373.46 million a year earlier and $290.06 million in the first quarter. Source
• Dividend per share rose to $0.22: Cash dividends declared were $0.22 per share, up from $0.19 in the first quarter and in the second quarter of 2025. Source

Figures management reported

Risks management discussed

• Financial: Nonperforming assets were 0.80 percent of loans and foreclosed assets, up from 0.66 percent in the prior quarter. Source
• Financial: Deposits and repurchase agreements are lower year to date, mainly from reduced municipal deposit balances. Source
• External: Unrealized losses on the securities portfolio were tied to changes in market interest rates across the periods compared. Source

Other quarters

• Q1 FY2026 results
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.