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FFIN Nasdaq· First Financial Bankshares, Inc
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FFIN Nasdaq· First Financial Bankshares, Inc
Earnings report Q3 2023

First Financial Bankshares, Inc. Reports Decrease in Net Earnings for Q3 2023

Segments of revenue

First Financial Bankshares, Inc. generates its revenue primarily from interest on loans and investments, trust fees, gain on sale of mortgage loans, and service charges and fees on deposit accounts. The company's main source of funding for its loans and investments is deposits held by its bank subsidiary, First Financial Bank, N.A.

Strengths

Despite a decrease in net earnings, First Financial Bankshares, Inc. maintains a strong performance in its revenue-generating segments. The company's interest income from loans and investments, trust fees, gain on sale of mortgage loans, and service charges and fees on deposit accounts contribute to its overall revenue. The management comments that the company's primary source of funding, deposits held by its bank subsidiary, provides stability and support for its lending and investment activities.

Challenges

First Financial Bankshares, Inc. experienced a decrease in net earnings for the third quarter of 2023 compared to the same period in 2022. The decrease in net earnings can be attributed to various factors such as changes in interest rates, economic conditions, and market volatility. The company's return on average assets and return on average equity also declined in the third quarter of 2023 compared to the same period in 2022, indicating potential challenges in optimizing asset utilization and shareholder value.

Noteworthy

It is noteworthy that First Financial Bankshares, Inc. experienced a significant change in unrealized gain (loss) on investment securities available-for-sale, resulting in a negative impact on its comprehensive earnings. This change, along with the reclassification adjustment for realized gains (losses) on investment securities, contributed to the overall decrease in comprehensive earnings for the company.

Summary

First Financial Bankshares, Inc. faced challenges in terms of decreased net earnings and lower return on average assets and equity in the third quarter of 2023. However, the company's revenue-generating segments, including interest income from loans and investments, trust fees, gain on sale of mortgage loans, and service charges and fees on deposit accounts, remain strong. The company's primary source of funding, deposits held by its bank subsidiary, provides stability for its lending and investment activities. The significant change in unrealized gain (loss) on investment securities available-for-sale impacted the company's comprehensive earnings. Overall, First Financial Bankshares, Inc. needs to address the challenges in optimizing its asset utilization and shareholder value to improve its financial performance in the future.

Source documents

Form 10-Q  filed on Nov 06, 2023
90 pages scanned

Reference data

Company financials Q3 revenue 119M
Analyst estimates Q3 EPS missed by -5.33%
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