2014 ffin annual meeting presentation

2014 Annual Shareholder Meeting

Years with Company Years in Industry

Scott Dueser Chairman of the Board, President & Chief Executive Officer

38 43

J. Bruce Hildebrand, CPA Executive Vice President Chief Financial Officer

11 35

Gary L. Webb Executive Vice President Operations

11 25

Gary S. Gragg Executive Vice President Credit Administration

23 35

Marna Yerigan Executive Vice President Credit Administration

3 30

Ron Butler Executive Vice President Chief Administrative Officer

21 32

Senior Management at First Financial

3

Years with Company Years in Industry

Michele Stevens Senior Vice President Advertising and Marketing

16 32

Courtney Jordan Senior Vice President Training

5 18

Bob Goodner Senior Vice President & Compliance Officer Compliance

12 35

Luke Longhofer Senior Vice President & Loan Review Officer Credit Administration

3 10

Brandon Harris Senior Vice President Appraisal Services

1 15

Kirk Thaxton, CTFA President, First Financial Trust & Asset Management

27 31

Senior Management at First Financial

4

Experienced Regional CEOs & PresidentsYears with Company Years in Industry

Marelyn Shedd, Abilene 23 31

Mike Mauldin, Hereford 11 36

Kirby Andrews, Sweetwater 23 26

Trent Swearengin, Eastland 14 16

Mike Boyd, San Angelo 38 42

Tom O’Neil, Cleburne 15 34

Matt Reynolds, Cleburne 9 32

Ron Mullins, Stephenville 8 35

Jay Gibbs, Weatherford 12 40

Mark Jones, Southlake 13 36

Ken Williamson, Mineral Wells 12 43

Robert Pate, Huntsville 16 33

Fred Wren, Huntsville 2 35

Stephen Lee, Southeast Region 7 21

Gary Tucker, First Technology Services 23 39

5

Board of DirectorsYears as Board

MemberCommittee

Appointment

Steven L. Beal Director and Former President and COO of Concho Resources Inc.

4

Executive

Compensation

Nominating/Corporate Governance

Tucker S. Bridwell President, Mansefeldt Investment Corporation 7

Lead Director / Executive

Nominating /

Corporate Governance

David Copeland President, SIPCO, Inc. and Shelton Family Foundation

16Executive / Audit

Nominating/Corporate Governance

F. Scott Dueser Chairman of the Board, President and CEO 23 Executive

Murray Edwards Principal, The Edwards Group 8

Executive / Audit

Nominating /Corporate Governance

Board of Directors

Years as Board Member

Committee Appointment

Ron Giddiens G&G Investments

4 Audit

Tim LancasterPresident and CEO Hedrick Health System 1 Audit

Kade L. Matthews Ranching and Investments 15 Compensation

Ross H. Smith, Jr. Chairman and President Akrotex, Inc. - Proposed - Compensation

Johnny E. Trotter President and CEO Livestock Investors, Ltd. 10

Executive

Compensation

Nominating/Corporate Governance

Independent Public Auditors

Mr. Joe Canon

12

Mr. Ross Smith

13

Forward Looking Statement

The numbers, as of and for the three months ended March 31, 2014, contained within this presentation

are unaudited. Certain statements contained herein may be considered “forward-looking statements”

as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon the

belief of the Company’s management, as well as assumptions made beyond information currently

available to the Company’s management and, may be, but not necessarily are identified by such words

as “expect”, “plan”, “anticipate”, “target”, “forecast” and “goal”. Because such “forward-looking

statements” are subject to risks and uncertainties, actual results may differ materially from those

expressed or implied by such forward-looking statements. Factors that could cause actual results to

differ materially from the Company’s expectations include competition from other financial institutions

and financial holding companies; the effects of and changes in trade, monetary and fiscal policies and

laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans;

fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary

fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and

integration of acquired businesses, and similar variables. Other key risks are described in the

Company’s reports filed with the Securities and Exchange Commission, which may be obtained under

“Investor Relations-Documents/Filings” on the Company’s web site or by writing or calling the Company

at 325.627.7155. The Company does not undertake any obligation to update publicly or revise any

forward-looking statements herein because of new information, future events or otherwise.

2013 Financial Review

Earnings

2008 2009 2010 2011 2012 2013

$53.1 $53.8$59.7

$68.4$74.2

$78.9Chart Title

27th Consecutive Year of Increased Earnings

FFIN Earnings (in millions)

2008 2009 2010 2011 2012 2013

$1.71 $1.72$1.91

$2.17

$2.36$2.48Chart Title

Strong Shareholder Earnings

Basic Earnings Per Share

2007 2008 2009 2010 2011 2012 2013

FirstFinancial 52.83% 50.76% 50.11% 49.49% 48.37% 48.14% 50.19%

Peer Group 63.12% 68.12% 69.53% 67.33% 65.57% 65.77% 68.51%

Working Harder and Smarter

Efficiency Ratio (FFIN vs. Peers)

4th Qtr. '10

1st Qtr. '11

2nd Qtr. '11

3rd Qtr. '11

4th Qtr. '11

1st Qtr. '12

2nd Qtr. '12

3rd Qtr. '12

4th Qtr. '12

1st Qtr. '13

2nd Qtr. '13

3rd Qtr. '13

4th Qtr. '13

1st Qtr. '14

3.00%

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

5.00%

First Financial Peer Group

Net Interest Margin

Quarterly Interest Margin

2007 2008 2009 2010 2011 2012 2013

1.72% 1.74% 1.72% 1.75% 1.78% 1.75%1.64%

0.87%

-0.03%

-0.18%

0.24%

0.79%

0.98% 1.05%

FFIN Outperforms Peers

Percentage Return on Average Assets

Pe

er

Gro

up

Fir

st

Fin

an

cia

l

2007 2008 2009 2010 2011 2012 2013

15.87%15.27%

13.63% 13.74%14.44%

13.85% 13.75%

9.45%

-1.83%-2.57%

0.88%

7.27%8.56% 8.99%

Strong Return on Capital

Percentage Return on Average EquityP

ee

r G

rou

p

Fir

st

Fin

an

cia

l

12-31-13 03-31-14To be considered

well Capitalized

Tier 1

Leverage Ratio9.84 9.95 > 5.00

Tier 1 Risk

Based Capital Ratio15.82 16.24 > 6.00

Risk Based

Capital Ratio16.92 17.39 > 10.00

Capital Ratios

2008 2009 2010 2011 2012 2013

$3,212 $3,279

$3,776

$4,121

$4,500

$5,222Chart Title

Growth in Total Assets

Asset Performance

(in millions)

2007 2008 2009 2010 2011 2012 2013$84 $77 $73 $81 $66 $68 $76

$182 $191 $175 $191 $218 $273 $334 $32 $52 $0

$394 $391 $406 $429 $427 $510

$590

$836 $855 $860 $990 $1,076

$1,238

$1,689

Real Estate

Commercial

Student

Consumer

Agricultural

Loan Performance

Growth in FFIN Total Loans (in millions)

$1,566 $1,514

$1,690$1,787

$1,528

$2,689

$2,089

2008 2009 2010 2011 2012 2013

FirstFinancial 0.80% 1.46% 1.53% 1.64% 1.22% 1.16%

Peer Group 2.63% 5.41% 5.37% 4.59% 3.67% 2.72%

Sound Lending Practices

Nonperforming assets as a percentage of loans + foreclosed assets (FFIN vs. Peers)

2008 2009 2010 2011 2012 2013

$797 $836 $959 $1,102 $1,312 $1,362

$1,786 $1,849$2,154

$2,233$2,321

$2,773

Non Interest Bearing Interest Bearing

Deposit Growth

Growth in FFIN Total Deposits (in millions)

$4,135

$2,583 $2,685

$3,113$3,335

$3,633

1st Quarter 2014 Summary

2009 2010 2011 2012 2013 2014

$13.7 $13.7

$16.3$17.8

$18.6

$22.3

1st Quarter Earnings

(in millions)FFIN Earnings

Account Growth

Net New Growth in 2011 – 4,036 Accounts

Net New Growth in 2012 – 1,219 Accounts

Net New Growth in 2013 – 3,308 Accounts*

Net New Growth in 2014 – 2,600 Accounts

December 31, 2011

December 31, 2012

December 31, 2013*

March 31, 2014

Total Number of Accounts

204,063 205,282 208,590 226,527

*(Excluding Orange Acquisition)

2009 2010 2011 2012 2013 2014

$0.44 $0.44

$0.52$0.56

$0.59

$0.70

Shareholder Earnings – 1st Quarter

Basic Earnings Per Share

2008 2009 2010 2011 2012 2013

$1,631 $1,664$1,784

$1,912

$2,232$2,465Chart Title

Growth in Trust Assets

Total Trust Assets – Book Value (in millions)

2008 2009 2010 2011 2012 2013

$9,441 $9,083

$10,808

$12,617

$14,464

$16,317Chart Title

Total Trust Fees

Growth in FFTAM Fees (in thousands)

2009 2010 2011 2012 2013

$745

$1,159

$1,835

$2,167

$2,648Chart Title

Growth in Mineral Management

Revenue from Mineral Management

(in thousands)

2008 2009 2010 2011 2012 2013

$2,810 $2,631

$3,254

$4,176

$5,183

$6,142Chart Title

Growth in FFTAM Income

Net Trust Income

(in thousands)

Managed Equity Styles

Equity Income

Core Domestic

Core Diversified

Core World

Strategic Growth

40

2009 2010 2011 2012 2013 2014

$606$739

$1,015

$1,225

$1,422

$1,792Chart Title

Growth in FFTAM Income

Net Trust Income – 1st Quarter

(in thousands)

2008 2009 2010 2011 2012 2013

$3,212 $3,279

$3,776

$4,121

$4,500

$5,222Chart Title

Growth in Total Assets

Asset Performance

(in millions)

Challenges

Overwhelming number of unreasonable and ineffective

regulations from Washington

Inept federal government

Stagnant national economy

Low interest rate environment

Maintaining net interest margin

Keep nonperforming assets to a minimum

Opportunities

Loan Growth

Mortgage Lending

Trust Services

Treasury Management

Mobile Banking

Lower Efficiency Ratio

Potential Acquisitions

Consolidation of Charters

Was very timely

Regulatory compliance

Technology complexities

Cost savings

Continue to operate as regions with local

management, advisory boards and decisions

Orange Acquisition – now Southeast Region

Effective May 31, 2013

5 locations in Orange, Jefferson and Newton Counties

41% market share in home market of Orange County

$443 million in Assets

$293 million in loans

$386 million in deposits

Excellent addition and provides diversification

Vibrant economy

Beaumont – 61st Branch

50

HEB – San Angelo

I-20 - Weatherford

52

Keller – Southlake – 1491 Keller Parkway

53

Roby – Remodeled in 2013

54

Ranger – Remodeled in 2014

55

Fort Worth – Forest Park Blvd. and Rosedale

56

Fort Worth – Forest Park Blvd. and Rosedale

57

58

2008 2009 2010 2011 2012 2013

$53.1 $53.8$59.7

$68.4$74.2

$78.9Chart Title

27th Consecutive Year of Increased Earnings

FFIN Earnings (in millions)

Stock cost in January 2013 $39,010

Dividend declared ($1.03 x 1,000 shares) $ 1,030

Increase in stock price during 2013($66.11 from $39.01 X 1,000 shares) $2210,720

2013 return on investment 72.11%

2012 return on investment 19.65%

2011 return on investment 0.61%

2010 return on investment -2.99%

2009 return on investment 0.69%

5 year compound average return 14.01%

Total Return on Investment

$27,100

Assume you owned 1,000 shares of FFIN stock on January 1, 2013…

Strong Stock Performance

-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

FFIN S&P 500 NASDAQ Dow JonesJan . ‘07 Mar. ’14Dec . ‘09Dec ‘07 Dec ‘08 Dec. ‘10 Dec. ’11 Dec. ’12

Dividends Per Share

2007 2008 2009 2010 2011 2012 2013

$0.84$0.89 $0.91 $0.91

$0.95$0.99

$1.03Chart Title

Annual Dividends Declared Per Share

Stock Split and Increased Cash Dividend

Two-for-One Stock Split – 100% Stock Dividend

Effective Shareholders of record as of May 15, 2014

Distribution Date June 2, 2014

Increase cash divided to $0.14 per quarter – 7.7% increase

Shareholders of record as of June 16, 2014

Dividend payable July 1, 2014

www.ffin.com