$FFIN earnings report

First Financial reported record third-quarter net income of $74.31 million and diluted earnings per share of $0.52. Net interest income was $138.51 million, above both $127.00 million in the prior-year quarter and $136.91 million in the linked quarter. The tax-equivalent net interest margin reached 3.91 percent, compared with 3.80 percent a year earlier and 3.90 percent in the linked quarter. Average interest-earning assets were $14.43 billion, compared with $13.60 billion a year earlier and $14.46 billion in the linked quarter.

Credit costs were substantially lower than in the prior-year quarter. The provision for credit losses was $2.03 million, versus $24.44 million in the third quarter of 2025, when the provision was driven by a large loan charged off due to borrower fraud. Net charge-offs were $935 thousand, compared with $22.34 million a year earlier, while the linked quarter had net recoveries of $600 thousand. Asset-quality attention points include classified loans of $294.49 million, compared with $252.96 million a year earlier and $283.10 million at June 30, 2026. Nonperforming assets were 0.71 percent of loans and foreclosed assets, unchanged from a year ago and down from 0.80 percent in the linked quarter.

Fee income was mixed. Wealth Management fees rose to $14.49 million on new account growth and increased mineral fee income due to oil and gas prices, while service charges on deposits increased to $6.69 million on net new accounts. Mortgage income declined to $4.18 million as the spike in long term rates affected mortgage volume and margins. Total noninterest income was $35.64 million, compared with $34.26 million a year ago and $35.84 million in the linked quarter. Noninterest expense was $81.05 million, broadly stable with $81.11 million in the linked quarter but above $73.67 million a year ago; the efficiency ratio was 45.59 percent.

Balance-sheet growth continued in loans and deposits. Loans totaled $8.54 billion at September 30, 2026, and third-quarter loan growth was $191.86 million, or 9.12 percent annualized. Deposits and repurchase agreements totaled $13.19 billion, while noninterest-bearing deposits grew $67.07 million, or 7.65 percent annualized, from June 30, 2026. Capital ratios remained high, including a 20.45 percent common equity Tier 1 capital ratio and a 21.66 total capital ratio. However, shareholders' equity fell to $1.83 billion from $2.00 billion in the linked quarter, primarily because the unrealized loss on the securities portfolio increased by $209.89 million, net of tax, to $489.55 million.

The release provided no forward financial guidance. Management emphasized disciplined balance sheet growth and prudent risk management, and stated that its Bee Cave location is expected to open later in October as its first full-service branch in the Austin market. Near-term reported variables to monitor are margin performance, loan and core deposit growth, classified loans, mortgage activity, and the effects of long term rates on the securities portfolio and equity.