First Financial Bankshares shares fall 2.8% after earnings
Record quarterly net income of $73.3M offset by higher expenses as Texas lender posts strong deposit growth
First Financial Bankshares shares declined 2.8% on Thursday, Jan. 23, 2026, despite the Texas-based lender reporting record quarterly net income and strong deposit growth for the fourth quarter of 2025. The stock closed at $32.75, down $0.95, according to market data.
The Abilene-based bank reported diluted earnings per share of $0.51 and quarterly revenue of $164.72 million, driven by net interest income of $131.37 million and noninterest income of $33.35 million. Net income reached $73.31 million for the quarter, while the bank recorded a reversal of $2.49 million in the provision for credit losses.
Deposits and repurchase agreements grew $1.25 billion, or 10.26%, from the prior year, and increased $511.59 million in the fourth quarter alone, representing a 15.74% annualized growth rate. Loans totaled $8.16 billion at year-end, up $245.18 million, or 3.10%, from Dec. 31, 2024.
Noninterest expenses for the quarter were $77.65 million. Chief Executive F. Scott Dueser highlighted the strong finish to 2025, pointing to record quarterly net income and robust deposit growth that positions the bank for expansion in 2026.
"We are especially happy with the strong deposit growth during the quarter, which will set us up well to grow both loans and securities in 2026," Dueser said in the earnings release. "We are encouraged by our organic balance sheet growth of almost $1.50 billion in the past year, increasing earning assets while continuing to grow net interest income."
For the full year 2025, diluted EPS was $1.77 on revenue of $631.6 million, with net income of $253.58 million. The bank’s net interest margin was 3.79% for the year, and noninterest expenses totaled $293.39 million.
Analysts maintain a consensus "Hold" rating on the stock with an average 12-month price target of $38.00, according to MarketBeat. The target represents about 12.8% upside from a recent price near $33.70.
The broader U.S. banking sector remains healthy heading into 2026, with S&P Global Ratings noting stable balance sheets and solid asset quality across the industry. The ratings agency projects an 11%-12% return on equity for FDIC-insured institutions this year.
First Financial, which operates primarily in Texas, benefits from a regional economy that continues to expand. The Texas Economic Outlook from January 2026 points to ongoing growth in key sectors, supporting loan demand for regional banks.
The bank’s dividend yield stands at 2.29%, with an annual dividend of $0.74 per share. First Financial trades below its 52-week high of $38.30, having risen from a 52-week low of $29.43.
As First Financial enters 2026, Dueser said the bank will focus on "sound lending growth, managing the changing interest rate environment and the regulatory landscape." The company, which has a market capitalization of approximately $4.84 billion, has maintained a conservative lending strategy while pursuing organic expansion in its Texas markets.