First Financial Bankshares, Inc. 2016 Shareholders meeting.

Welcome to the First Financial Bank Shares annual meeting. As chairman of the board of directors, it's my pleasure to preside over today's meeting. Today marks the 43rd annual meeting of shareholders since this company was organized as a multi-bank holding company in 1973. Of course, as you'll remember, we're 126 years old, so we've been around a long time. As always, we are honored to have so many of our stockholders attend this meeting, and especially we have a lot of officers and employees here, which I'm excited about. Your interest and dedication to our company is very gratifying to us. Your continuous support is very much appreciated, and the support of this crowd right here means a lot to us.

As set out in the proxy statement dated March 1, 2016, our directors Tucker Bridwell and David Copeland are serving as proxies and are authorized to vote in accordance with your proxy, which was completed and returned by mail, computer, or in person. Otherwise, proxies received prior to the meeting will be voted in accordance with instructions contained in the proxy statement. If you have revoked your proxy prior to the meeting, or if you're voting today at this meeting, please mark your proxy, raise your hand, and we'll collect your proxy cards at this time to submit them to Mr. Copeland and Mr. Britt, who will tabulate these votes with the proxies previously received.

Thank you, Steven, for doing that. While Mr. Copeland and Mr. Britt tabulate the number of shares represented either in person or by proxy, I'd like to introduce our senior management, who truly are the ones who lead this company. I would ask each one to stand and remain standing to be recognized as a group, and I'd ask for you to pay particular attention to the experience level of each one of these professionals as we go through these slides. Of course, Scott Dueser, chairman of the board, president, and chief executive officer; Ron Butler, executive vice president, chief administrative officer, and also CEO of our Abilene region; Troy Ford, president of First Financial Mortgage; Jerry Gregg, executive vice president; Lyndon Bruce Hildebrand, CPA, executive vice president and chief financial officer of the company; Luke Longhofer, executive vice president; Lyndon Stan Limerick, executive vice president and chief information officer; Randy Rowe, executive vice president and chief risk officer; Kirk Thaxton, president of First Financial Trust and Asset Management Company; Marta Jurgen, executive vice president of lending in her east banks; Brandon Harris, senior vice president of appraisal services; Monica Houston, senior vice president of training; Larry Kent, senior vice president and compliance officer; Michelle Stevens, senior vice president of advertising and marketing; Michelle, I'm Marilyn Shed, president of her Abilene region; Mike Mullen, chairman, president, and CEO of Hereford; McVoy, chairman, president, and CEO of San Angelo; Tom O'Neill, chairman, president, and CEO of Cleburne; Trent Swearengen, chairman, president, and CEO of Stephenville; Jay Gives, chairman, president, and CEO of Weatherford; Mark Jones, chairman, president, and CEO of Southlake region; Ken Williamson, chairman, president, and CEO of her Mineral Wells region; Steven Lee, president and CEO of Southeast region; Sam Baker, chairman, president, and CEO of our Conroe region; and Martin Noto, president and CEO of her newest region, Fort Worth. Ladies and gentlemen, the performance of the company just doesn't happen. It's because of this very capable team of bankers who are dedicated to our customers and to you every day of their lives and utilize their knowledge and expertise to run their portion of the company and do it very well. There is no way that I can appreciate them enough for the job that they do in making our bank one of the top banks in the country, but I do think a big round of applause is entirely in order.

Each of our bank regions, as well as our trust and technology companies, are guided by very, very capable boards. All together, we have 108 business and professional leaders, other than bank presidents and company representatives, who serve our 11 regions and our trust and technology companies. As we say, our boards are made up of the movers and shakers of the communities that we serve. Their guidance and counsel is greatly appreciated, and their influence in the markets we serve is vital to the ongoing success of this organization. Numerous board members are in the audience today, and I respectfully request that those in the audience stand and be recognized. All our board members, please stand.

For the past 14 fiscal years, the accounting firm Ernst & Young LLP has performed the audit of our company. We appreciate their professionalism, and we are pleased to have a representative from the firm with us this morning, Andrew Janaka, a manager with the firm. Andrew, where are you? Right over there. Andrew is here to answer any questions that you want to ask. Thank you, Andrew, for being here.

It appears that the shares represented today have now been accounted for. Therefore, we'll move along with today's official business in accordance with the annual meeting notice and the proxy materials that were mailed to all shareholders. There are three items that require an official vote of shareholders. These were covered in detail in the proxy materials. However, as we present these items, if any of you should have any questions, please raise your hand or stand, as we will respond to the best of our ability. Mr. Copeland and Mr. Britt, have you tabulated the votes? Thank you. Mr. Copeland, will you please give us the number of shares that are represented by proxy and the number represented in person?

That is outstanding. I don't think there's another company that has 86% of their stockholders vote, and that says a lot about your support of us. The number of shares represented constitutes a quorum; therefore, this meeting is properly and duly convened. That being the case, it is our standard procedure to treat the minutes of last year's meeting. Mr. Bruce Hildebrand has in hand the minutes of that meeting, which was held on April 28, 2015. That meeting had five official items of business: the election of directors; the ratification and appointment of independent auditors; the advisory vote on compensation for named executives; the approval of a restricted stock plan for selected employees, officers, non-employee directors, and consultants; and the amendment to the amended and restated certificate of formation to increase the number of authorized shares to 120 million. All five items were approved by the shareholders as set out in the proxy statement dated March 1, 2016. We have only three official items of business for this meeting. The first item is the election of directors to serve on the corporate board for the coming year. As stated in the meeting notice and the proxy statement, the Nominating and Corporate Governance Committee and the Board of Directors have recommended that 11 directors be elected, all of whom are currently serving as board members. Today, I would ask that each nominee stand and remain standing as I introduce the nominees and their primary businesses. They are as follows: April Anthony of Dallas, CEO of Encompass Home Health and Hospice and Home Care Home Base; Stephen L. Love of Roundwood, director, former president and chief operating officer of Concho Resources Inc.; Tucker S. Bridwell, president of Amistad Investment Corporation; David Copeland, CPA, president of Sisco Inc. and the Sheltered Family Foundation; Scott Dueser, chairman of the board, president, and chief executive officer of First Financial Bank Shares; Murray Edwards, principal of the Edwards Group; Ron Gideon of San Angelo, owner of G&G Investments and former president of Bank of the West San Angelo; Tim Lancaster of Abilene, president and CEO of Hendrick Health System; Cade Matthews of Amarillo, ranching and investments; Ross H. Smith Jr. of Orange, chairman and president of Accra Tex Pink; and Johnny E. Righter of Hereford, president and CEO of Livestock Investors Limited. This is the recommended slate of directors for the coming year. Mr. Copeland, please give us the tabulation of the votes.

That's extremely good. Thank you, Mr. Copeland. With these votes, these 11 directors are duly elected, and we appreciate each one of you. The second item of business is to ratify the Audit Committee of the Board of Directors' appointment of Ernst & Young LLP as independent auditors for the fiscal year ending December 31, 2016. Andrea, are you nervous? You may not have a job for the next year. As noted in the meeting notice and the proxy statement, the Board of Directors has recommended the appointment of Ernst & Young LLP be ratified. Mr. Copeland, the totals in that regard.

All right, Andrew, you have a job for the next year. I don't think he was worried, nor was I. The third and last item of business is an advisory vote on compensation of our named executive officers. Presented per Securities and Exchange Commission rules, we're again conducting a shareholder advisory vote, referred to as say-on-pay, to give shareholders the opportunity to express their views on compensation for named executive officers and the executive compensation philosophy, policies, and programs described in the proxy statement. As noted in the meeting notice and the proxy statement, the Board of Directors recommends approval of the resolution approving the compensation of named executive officers. Mr. Copeland, the totals in this regard.

Thank you, and that's a majority, and the advisory resolution is approved, and the rest of us have jobs for the coming year. This concludes the official business, and we appreciate the strong approval of these three items. Now, Bruce Hildebrand will present the financial results, and Kirk Thaxton will discuss trust highlights and activities. Then it will be my pleasure to present the 2015 and current activities of the company. Bruce.

Thank you, Bruce and Kirk. Your reports certainly reflect the ongoing strength of our organization and good prospects for the coming year. Well, this is the fun part. This is where we get to talk about what's really going on in the company and share with you some of the things that we're doing. You know, I know you see press releases and things that we're doing and wonder why are they doing that, and so this is the part where we kind of connect the dots for you. So that's the fun part. Of course, last year we were selected as number two bank in the country. In the last seven years, we have been selected as number one, number two, or number three in the country. There is no other bank in the nation that's been in the top three positions seven years in a row, which says a lot, and we hope we can continue to stay there. And I will tell you this just doesn't happen. It happens by the hard work and dedication of our board, our officers, and our employees, and the support that you give us every day to be number one, number two, or number three in the nation. One of the other things we're very excited about is our work in stopping financial exploitation. In fact, we have one of the top financial exploitation programs in the nation, and we've been recognized for that, and I'll talk about the recognitions that we've had. But what's interesting is it's not the recognitions that we're proud of. Thank you, y'all are doing a great job because it's hard to follow me because I'm walking around, but it's the fact that we saved a million dollars last year of our customers' money by stopping fraud, and in many of those cases we were able to get the fraudsters arrested. It's because our people have dedicated themselves to learning about financial exploitation, how to detect it, how to stop it, and how to get the people arrested. It's exciting what the program's doing. I'm going to talk more about it at lunch because we're going to ask you to help us. Financial exploitation can be stopped by education. What's so exciting about what we're doing is we're stopping it. In fact, I truly believe that a lot of fraudsters today know you better not mess with somebody from First Financial because you're going to get arrested, and it makes a difference. So in many ways, we're protecting our customers in ways we have no idea. But because of this program, the ABA Foundation, which is the American Bankers Association Foundation, gave us the Community Commitment Award in November, a very outstanding national award for our work in financial exploitation. Next month, the Texas Bankers Association is giving us the 2016 Leaders in Financial Education Award at the TBA convention because of our education that we've done in the public and with our customers to fight financial exploitation. Last July, I was able to speak at the White House Conference on Aging with the president, and it was an outstanding event. You know, it's interesting what I love is to see Democrats and Republicans coming together for a common cause. You don't see that in many cases today, but they all realize that financial exploitation is extremely serious. In fact, it's epidemic. Last year, over $3 billion were lost, primarily from our elderly population. Marilyn Shed in November went to Washington and was a speaker at the AARP roundtable discussion. Then in January, she went to the Texas State Senate committee and talked about financial exploitation. And then Michelle Stevens in March went to the House Investments and Financial Services Committee. So as you can see, we're the go-to bank for information because we've made this such an important event. And as I say, I'll talk about it more at lunch. You know, to have the 29th consecutive year of increased earnings was a big deal, and the bigger deal was to pass the $100 million mark. But when you look at five years ago, we were at $60 million, and now $100 million. This is what's important: we've got to keep growing this, and we've got to keep going. And that's what you'll see in the next couple of slides, things that we're doing to improve. You know, I talked several years ago about how one of these days we're going to be at the $10 billion mark, and when you get to that mark, your costs go up considerably because of the way the government has it structured, and your compliance costs go up, and you're under a lot more scrutiny. So we're preparing to get to that $10 billion mark because we'll make it one of these days, probably sooner than later. So a lot of the things that we're doing today are improving and getting us to that point so that we are ready for that way of life. And one of the things, of course, that added to our assets was the purchase of First Bank Conroe in July of last year. Very good purchase. We couldn't be more pleased with the team from Conroe. They just came into our company and were part of the family day one. We were extremely pleased to pick up branches in Montgomery, Walker, and Harris County, which are some of the top growing counties in Texas. Eight branches in Conroe, Magnolia, Tomball, Cut and Shoot, Montgomery, and Huntsville. We have closed the Huntsville branch because it's so close to our other one, which helped us cut some expenses and better serve our customers. We have a great site in Spring, Texas on the Grand Parkway that we hope to build on in the near future. So things in that quadrant north of Houston are going very well, and I'll show you that in a minute. We'll talk about our footprint, but we're really excited. Sam Baker, who is our president in Conroe, is just a great management person. You know, our philosophy is to buy good banks that have good earnings, with good boards and good management that are doing a great job. All we want to do is go in and enhance that bank. You see a lot of banks go in and buy bad banks. I don't think we do very well at buying bad banks because we've never had a bad bank before, so we just buy good banks. And then the purchase of Fort Trust Mortgage in May of last year, we were very excited about that because we needed to strengthen our mortgage, especially in the Metroplex area. Troy Ford and his team, Tammy Harding, Kami Graves, and Ryan Craig, a great team that came over to us. We've been trying to get Troy Ford to come to our company for many years because he ran and runs one of the best mortgage companies in Fort Worth and Dallas, and he also has over 30 years of experience in mortgage, 15 running his own company. They've been doing about $175 million of mortgages. We do about $225 million today. In the coming year, we hope to exceed $400 million in mortgages, and that's a big deal. Mortgage is an extremely important service because when you do somebody's mortgage, they move all the rest of their business with you. It's such a big transaction, and it's a hard transaction today. There is a lot of compliance that goes along with mortgage. If you've closed a mortgage loan lately, the stack is about this thick. And of course, we're excited because Troy came over and he is now president of our mortgage division. So that's an important part, and I'm going to talk about how we have backfilled some positions in our company in a few minutes. But we're really excited about having the Fort Trust team as part of First Financial Bank Shares and First Financial Bank. Here's our footprint. You can see Conroe and how it goes north of Houston. Of course, our philosophy is so different from most Texas banks because they all want to be in the big city. We don't want to be in the big city. We want to be around the big city because when you're in the big city, you're fighting the big boys, and you know, we'd be a drop in the bucket in Dallas or Houston. So why go fight a battle that you can't fight? We would much rather be country bankers, community bankers. And so we position ourselves where you get the growth factor coming off the big city, but you don't have to go fight the big boys, and you're not a drop in the bucket. We're the big fish in the little pond, and we like it, and it works over and over again. So you see we go from Hereford at one end of the state. We have a trust office in Lubbock, Midland, Odessa where we have trust and banking, San Angelo, Abilene, Sweetwater, and then along the I-20 corridor. We learned that I-20 corridor because you get a lot of business off that corridor. There's lots of commerce there. Then around Fort Worth and Dallas, again that growth factor where you're getting the growth but you're not fighting the big boys. You go down Huntsville, we started in Conroe, we've started going around Houston now again in those smaller towns, high-growth area. And then Orange, Beaumont in those areas along the coast right next to Louisiana. So we go from one border to the other. There's a lot of space in between, but we're very pleased with our footprint. What I love about our footprint more than anything else is the diversification because all of these economies are different. Each bank is very different. It has its own personality because its personality meets the personality of the community. I love it. I was in Hereford last week. You know, there's probably more Spanish spoken in Hereford, Texas in the bank than English, but we meet the customers' needs and we fit that community. It is a great community. We had a stockholders meeting or reception for our stockholders up there, and we have a large number of stockholders in Hereford, Texas, and they all come. We do an evening reception. They really don't care about what I have to say; they just like to visit. I get up and make a few comments and tell them about the bank, but those that really wanted to know are here today. The rest of them, they just like to hear the short story of what we're doing. But that's what I like about our footprint, from cattle to the refining of oil and gas on the other side of the state, very different. So when one of the areas is up, we might have another area down, but that's one of the reasons our earnings are so consistent, because of that diversification. And we like that, and we'll continue to look at that as we look at acquisitions. Here's our Fort Worth branch that will open next week. This is where Troy will be, this is where Martin will be, and our team. The first floor is going to be retail and lending, second floor is going to be trust, third floor is going to be mortgage, and fourth floor is going to be leased. So we're really excited about getting into this building. We have our team broken up across Fort Worth today in different office buildings, and so it's going to be great to have everybody there. One of the reasons you might say, well Scott, you said you don't want to be in the big city. Well, Fort Worth is still a small town to us, and it has that atmosphere. But one of the things that I think is important with our Fort Worth location is that our customers have continued to ask, we want a branch in Fort Worth. Why? Because most of them work in Fort Worth. Those people that live in those areas around Fort Worth where we have banks, they work in Fort Worth, but they live in Weatherford or they live in Granbury. And so now they'll have, even though we've had a branch there, it's been on the third floor of a building and without an ATM. Now we'll have a full-service location for our customers to use as they leave work in Fort Worth. They can stop by the bank, and as you can see, the location is outstanding, one block off of 121 and 30, and one block back on. So it's going to be great for all of our customers in that area, and I think this branch will really get used. We have also put a Fort Worth Advisory Board of Directors together, and I want to talk about them. Murray Edwards has so graciously agreed to be the chairman of this board. Murray has a condo in Fort Worth, and so he's going to guide and direct this board. We're really excited about having one of our board of directors from First Financial Bank Shares as chairman of this board. We have Larry Anthony on this board with Kelly L Enterprises Inc. Larry was the Coors distributor in Fort Worth for many years, and he is just an outstanding civic leader in Fort Worth. We have Smith Brownlee, who's here. Smith is a CPA with the firm Branly and Braden, and we're really excited about having Smith on the board. Of course, Ron Butler, as you all know. Mary Lee Cruz, East Source, and she deals in food service equipment, a very interesting company. Steven Kimmel, who many of you know because Steven is CFO of Hendrick Medical Center here. We're very excited about having Steven. Steven is CFO of Cook Children's Health System, and somebody that knows us well, and we're excited about having Steven on. Matt Morris, president of Guest Bates Insurance, one of the top insurance companies in Fort Worth. What's fun about having Matt on the board was he was a football star at Hardin-Simmons University, so he knows Abilene well, and he's excited about coming on, and he also lives in Toledo. Martin Noto, our president of the Fort Worth region, and I'm going to talk about Martin a little more in just a minute. Paul Poston, president of Wellington Insurance Group. Paul brings that experience in the insurance business to us, and we're excited about that. And then George Robertson, president and CEO of Emiss. George has been in the hospice business, he's been in the healthcare business. He sold those businesses. In fact, he's the person that's going to be taking our fourth floor in this new building, so we're really excited about having George. So we're excited about this new board, and we think they will help us a lot in Fort Worth because we will be a player in Fort Worth, let me tell you. And excited about that. Okay, let's talk about what's going on around. This is our new Cisco location, and we've needed this. If you remember when we went into Cisco, we bought a video store for about $30,000 and remodeled it as a bank, and the ATM in front of the video store cost more than the bank did. So now Cisco needs a new building, and this is what it's going to look like. If you've seen the Albany building, this is what it's going to look like. It'll look just like the Albany building. We're really excited about having this. It'll open in June of this year, and so Cisco will have a brand-new, state-of-the-art building, which they need. And then we have Odessa. This is the construction going on in Odessa. We need this facility. Barbara would really rather stay where she is today, wouldn't you, Barbara? Yeah, I knew that. We are in a shopping center today without an ATM. She's got her trust office there, we've got her bank there. It is not the best location, and we've done pretty well, to say the least, in that location. But this will be the new location. This is what it's going to look like. This is on Billy Hicks Road. We're really excited. Another building that will open in June, and a very much needed facility for our quality people and the growth of the Odessa market, especially in trust. Weatherford, let me talk about some of the other things that we're doing in the company. As we bought banks, you know, a bank had to have bookkeeping, and they had to have technology, and they had to have all the back room stuff. Whereas by banks, that's no longer needed because that's all centralized. But we have these huge buildings that we're using probably half of, that are hard to remodel, and you know, just don't fit the needs of banking today. And so this is one of those buildings that was way too large for us. So what we've done is sold this building to the county, which is right across the street. It's a perfect deal for them to have the extra space, and what we've done is moved into our College Park location. We remodeled College Park, and when you go by, this is on South Main. So we have a location on North Main, we still have our drive-ins downtown, and we have this facility on South Main where our downtown people moved into. What that does is it saves us a lot of money long term, and we utilize 100% of the building, and it's much better for our customers in customer service. Here's another one. San Angelo, a beautiful building that was built many years ago and was probably too big when it was built by Texas Capitol Architects of Commerce Bank. But today, we're using very little of this building because we don't need all that space. So we have sold this building to the city of San Angelo, and we're building this building a block away where our drive-ins were. So we'll have a brand-new, state-of-the-art with drive-in teller lines back to back, which is exactly what you need, less cost because we're not heating and cooling a huge building, and again meet the needs of our customers much better. Same thing in Orange. We are in the process of selling this building to the city of Orange so they can utilize it. And what's neat is these municipalities need the space, and we're gifting and selling, so they're getting a great deal on the building, and we'll slip over next door to this and build a new building. So again, that's our philosophy, to have updated, state-of-the-art buildings across the board. Okay, talk about management enhancements. One of the things that I talked about several years ago and that we continue to work on is making ourselves better every day. We have to remake ourselves, and that's what we're doing. This is a list of people that have come to the bank and brought their expertise, and I just want to talk through why we've done what we've done and kind of what they bring. I've got some notes here so I won't miss the scoop behind this group, because it's really important to understand. In January last year, we hired Stan Limerick. He's executive vice president and chief information officer, head of all technology. He comes with 37 years of technology experience, a degree in technology from UT Dallas, extensive knowledge on Jack Henry, our core system. So having that expertise is extremely important. In May 2015, we hired Randy Rowe, executive vice president and chief risk officer. When you get to the $10 billion mark, you have to have a chief risk officer. And you say, what does the chief risk officer do? Well, they look at every risk that we have in the bank and make sure that we have those holes plugged. But Randy comes to us from the OCC, where he was a national bank examiner for 24 years, and that experience has helped us tremendously. The other thing I like is he was the examiner in charge for USAA, the largest bank in Texas. So that experience is helping us know how to become better at what we do and how to get bigger. Then we talked about in June 2015, Troy Ford came. He is now president of First Financial Bank Mortgage Division. Troy has 31 years in the mortgage business, which we needed that expertise, and 15 years of running his own company. So that has helped us tremendously because we want to grow mortgage. Mortgage is a very important part of the company along with trust. In August 2015, Luke Longhofer got promoted. Luke's been with the bank for six years. Before that, he was seven years at the FDIC as a bank examiner. Luke's done a very good job for us and now is working with Marta Jurgen and Gary Gregg in overseeing lending throughout our footprint. Very important part. And Trent's one of the, Luke's one of those young ones in our company. In February 2016, we promoted Trent Swearengen to president of our Stephenville region. Trent's been at the bank 17 years, started in the loan review department and has moved up. You'll hear this theme over and over again of the people that started at the bank and never left. And what you're seeing is us bring new people in and bringing our younger group up the ladder to be ready to fill the positions for growth. Another, David Bailey, that same month took a position in Eastland as president of the Eastland division. Now here's a guy, David started working for us 13 years ago when he was at school at McMurry University and has never left. He's moved up the ladder. He was a teller and now is a president of a bank. So we're really excited about that. And in March 2016, we hired Barry Willens, executive vice president of retail services. We've never had somebody in charge of retail, but we felt like we needed more strength in a retail division as we grow. Barry brought 19 years of retail banking experience from some of the big boys: Wells Fargo, JPMorgan, BBVA. So we're excited about having Barry's expertise there. So that's why we're doing what we're doing. As you see these press releases, we're strengthening our management team to get ready to continue to grow. And talking about growing, here's our returns for the last five years. But what's good in this is the five-year compounded average return for the last five years has been 13.95%. It's one of those things we want to continue to do for you, give you a good return. And this is how the red line is us. This is how we've compared to the S&P, NASDAQ, and Dow. We don't ever forget that we are here working for you, our stockholders, and we have to give you a good return. You know what I tell our employees in new employee orientation? I ask them the question: what happens if we don't give our stockholders a good return? And the answer is they'll sell us, and most of the jobs will go away. So they take it very personally that they do a good job, and they remember that they work for you. Here's our dividends per share. We've gone from $0.48 up to $0.62 a year. And because of our good performance, the board has voted to increase the dividend by $0.02 to $0.18 per quarter, which is a 12.5% raise that you're getting, and you'll get that in the next quarter. The dividend in 2016 will be $0.70, and on an annualized basis, $0.72. It will be for shareholders of record from June 16th, and the dividend will be paid July 1st. So we hope you're pleased with that decision. We always want to send you home with something, and I don't want to be up here the year we don't. So that's the story of what's going on at the bank today. Does anybody have any questions? All right, what we'll do is, as we've done in the past, we have lunch ready for you in the conference center, and there will be people to guide you over there. I want to say especially to all of you, thank you for coming to this meeting because this is a stockholders meeting. It is not a stockholders luncheon. The luncheon is the icing on the cake. So thank you for coming because we want you not just to eat but to learn about the company and what's going on in the company. So there will be people to guide you over there. Those of you that don't feel comfortable about going through the buffet line, just sit down. We have our First Financial people there that will serve you. You don't have to juggle the plates if you don't want to. You'll probably eat faster if you get through the line, but we will make sure you get a plate, we'll make sure you're served, and we'll talk a little bit more about the company as we're over there. Thank you for being here today. We're adjourned.