Last Updated 5/5/25
First Financial Bankshares (FFIN) isn’t usually the name making waves on financial news networks, but dividend-focused investors have quietly appreciated its steady performance for years. Based in Abilene, Texas, this bank has built its reputation on consistency and solid fundamentals, rather than aggressive expansion or high-stakes risk-taking.
With over 80 branches spread across Texas, FFIN’s approach centers around traditional, community-focused banking. It doesn’t chase trends. It sticks to what it knows—strong lending standards, conservative financial practices, and shareholder value. For dividend investors, that kind of predictability is gold.
As of now, the stock trades around $34.75 and carries a market cap just shy of $5 billion. It’s not immune to market forces—no bank is—but it tends to weather economic shifts better than most. Let’s dive into what’s been happening recently and explore why income investors might want to keep this name on their radar.
Recent Events
In its latest quarterly update ending March 31, 2025, FFIN delivered a solid showing. Revenue climbed 12.9% year over year to reach $553.6 million over the trailing twelve months. That kind of growth is impressive, especially in a rate environment where many regional lenders are seeing margin pressure eat into their top line.
Net income came in at $231.5 million with diluted earnings per share of $1.62. That’s a 14.9% increase from the same period a year ago. Not too shabby. These aren’t numbers driven by flashy one-time gains either. They’re coming from the bank’s bread-and-butter business.
Profit margins are strong—41.8% on the bottom line, and an operating margin of 55.4%. This is a well-run shop with a firm grip on expenses and a laser focus on operational efficiency. It also helps that the balance sheet is rock solid. As of the most recent quarter, FFIN holds over $927 million in cash with total debt of just $83.6 million.
There’s some chatter around short interest, which currently stands at 7.3 million shares or about 6% of the float. The short ratio is elevated at 11.45, so there’s clearly some bearish positioning. But for long-term dividend investors, this isn’t necessarily a red flag—more a reflection of broader sector caution.
Key Dividend Metrics
📈 Forward Yield: 2.19%
💵 Forward Dividend Rate: $0.76
📅 Ex-Dividend Date: June 16, 2025
💰 Next Payout Date: July 1, 2025
🔁 Payout Ratio: 44.44%
📊 5-Year Average Yield: 1.77%
📈 Trailing Yield: 2.08%
📈 Trailing Dividend Rate: $0.72
The current yield of 2.19% might not grab headlines, but it tells a deeper story when paired with the bank’s historical performance and low payout ratio. That 44% payout leaves plenty of breathing room for both dividend increases and retained earnings. When income is backed by high-quality profits and supported by a conservative management team, that’s a foundation investors can trust.
Dividend Overview
Consistency is the name of the game here. FFIN has been returning cash to shareholders for decades and hasn’t missed a beat through multiple economic cycles. The payout has been ticking upward in recent years, which isn’t something all banks can say—especially following the turmoil seen in 2023 and 2024 across the regional banking landscape.
In terms of timing, investors eyeing the next dividend need to be in by the ex-dividend date on June 16, 2025, with the next payment scheduled for July 1. These quarterly distributions are steady and backed by actual earnings, not accounting tricks or aggressive debt issuance.
What’s also attractive for income investors is the stock’s relatively low beta of 0.90. It tends to be less volatile than the broader market. That’s a useful trait for anyone building a dividend-focused portfolio looking to dampen broader market swings.
Dividend Growth and Safety
Here’s where FFIN quietly separates itself from many peers. It doesn’t just pay a dividend—it grows it. That forward dividend of $0.76 is a step up from $0.72 over the trailing year, and the five-year average yield of 1.77% suggests that the current rate is a slight premium to historical norms.
What makes this growth sustainable is the underlying financial health of the company. Return on equity clocks in at 14.6%, with return on assets at 1.68%. These are solid numbers that reflect real efficiency. The bank isn’t overly leveraged and doesn’t take on excessive credit risk just to juice returns.
Cash on the balance sheet exceeds $927 million, dwarfing the $83 million in total debt. With that kind of liquidity, there’s no concern about the bank’s ability to continue funding dividend payments—even in tougher times.
It’s also worth pointing out that revenue and earnings are growing. Double-digit year-over-year growth in both top-line and bottom-line numbers tells you the bank is not only holding steady but expanding its profitability. That feeds directly into dividend safety and creates room for future increases.
All in all, First Financial Bankshares doesn’t need to be flashy. It’s a regional bank with a disciplined approach, a strong balance sheet, and a shareholder-friendly dividend policy. For dividend-focused investors, especially those looking for a dependable stream of income from the banking sector, FFIN quietly checks a lot of boxes.
Cash Flow Statement
Over the trailing twelve months, First Financial Bankshares generated $309.6 million in operating cash flow, reflecting a modest year-over-year increase. This aligns with its steady earnings performance and continued strength in core banking operations. Free cash flow also remained healthy at $292.9 million, indicating that capital expenditures were well-controlled at just $16.7 million—a level consistent with prior years and suggestive of the bank’s disciplined approach to capital investment.
On the investing side, the company recorded a cash outflow of $736.9 million, marking a significant shift from the prior year’s positive $127.3 million. This likely reflects investment in securities or expansion-related activities. Financing cash flow, by contrast, was a strong positive at $654.1 million, bouncing back sharply from last year’s outflow. The end cash position now stands at $763.4 million, well above the $536.6 million at the close of 2023, showing a meaningful boost in liquidity.
Analyst Ratings
First Financial Bankshares (FFIN) has attracted fresh attention from analysts recently, with several firms updating their views based on the bank’s resilient earnings and healthy balance sheet. 🏦 The consensus rating continues to lean toward a “Hold,” signaling that while upside potential exists, most analysts believe the stock is fairly valued at current levels.
📈 Keefe, Bruyette & Woods raised their price target from $36 to $40 while maintaining a neutral stance. This boost reflects improved sentiment toward FFIN’s earnings consistency and cautious risk profile, especially in a choppy rate environment.
🔄 Stephens & Co. also increased their price target to $40 from a previous $37, citing the bank’s operational steadiness and well-capitalized structure. Though they didn’t change their overall rating, the revised target signals a more constructive outlook on future performance.
📊 Truist Securities followed a similar path, bumping their target from $39 to $40 while reiterating their “Hold” rating. Analysts at Truist noted that FFIN’s loan quality and conservative management continue to be positives, even if valuation keeps them on the sidelines.
🎯 The average 12-month price target now sits at $38.75, with projections ranging between $35 and $40. This spread shows a relatively tight consensus, reflecting expectations of modest growth with limited downside risk. The tone from the analyst community suggests steady confidence in the business, balanced with realistic expectations around valuation and market headwinds.
Earning Report Summary
Strong Start to the Year
First Financial Bankshares came out of the gate in 2025 with solid momentum. The bank reported net income of $61.35 million for the first quarter, which was a healthy jump from last year’s $53.37 million. Earnings per share also ticked higher, moving from $0.37 to $0.43. Revenue hit $149.02 million, supported mainly by growth in net interest income, which rose more than 18% to $118.79 million.
One standout was the net interest margin, which expanded to 3.74%. That’s a good sign for any bank, and it shows that FFIN is managing its funding costs and loan yields well. Deposit growth was another bright spot, with total deposits increasing by more than $360 million during the quarter. Loans rose nearly 10% year-over-year to just under $8 billion, and the company managed to improve its efficiency ratio, now sitting at 46.36%. That means they’re doing more with less—a trait long-term investors usually like to see.
Credit Quality Showing Some Caution Flags
While the earnings numbers were strong, there were a few areas that called for a closer look. Nonperforming assets rose to 0.78% of total loans and foreclosed properties. That’s up from 0.51% a year ago. It’s not a dramatic jump, but enough to catch the attention of those watching the health of the loan book. Classified loans increased to $245.61 million, which represents a 21.8% uptick.
In response to those changes, the bank boosted its provision for credit losses to $3.53 million, compared to just $808,000 in the same quarter last year. The allowance for credit losses was also lifted to 1.27% of total loans. That said, actual losses remained minimal, with net charge-offs at just $236,000. So while there are more early warning signs, those issues haven’t yet translated into significant losses.
Steady Leadership and Outlook
Management sounded confident but measured in their commentary about the quarter. They recognized the bank’s financial strength, but also made it clear they’re keeping a close eye on credit trends. Their focus remains on disciplined lending and maintaining asset quality, especially as the broader economic environment continues to shift. The bank’s strong capital position and diversified earnings base put it in a good spot to manage any bumps in the road.
Altogether, it was a balanced quarter—growth in the right places, a few caution signs on credit, and a clear message from leadership that they’re staying sharp as the year progresses.
Final Thoughts
First Financial Bankshares embodies the appeal of a steady, dividend-focused investment within the regional banking sector. While it may not generate headline-grabbing growth, its consistent profitability, robust balance sheet, and commitment to returning value through a growing dividend offer a compelling case for income-seeking investors. The recent quarterly results underscore this stability, showcasing healthy revenue and earnings growth alongside a manageable increase in credit-related metrics that management appears to be proactively addressing. For those prioritizing dependable income and a history of shareholder-friendly practices, FFIN remains a noteworthy consideration.