First Financial Bankshares (FFIN) in Abilene, Texas, said Thursday that it is consolidating all of its bank charters in an effort to cut expenses and boost profits.
The $4.3 billion-asset company posted a 10% increase in net income, to $19.8 million, in the third quarter compared with a year ago.
Its net interest income climbed 2.1%, to $39.1 million, year over year, due primarily to a 16% jump in total loans to $2 billion. Still, it wasn't enough to increase the net interest margin, which fell by 30 basis points, to 4.3%.
First Financial is already one of the industry's more efficient companies — its efficiency ratio was 46.6% at Sept. 30 — but it's looking to trim overhead even more by merging its 11 charters into one by year end, subject to regulatory approval. Many multi-charter banks have made similar moves in recent years to reduce expenses in the face of rising regulatory costs.
"Due to regulatory, compliance and technology complexities and the opportunity for additional cost savings, we believe it is time to make this enhancement," said First Financial's chairman, president and chief executive, Scott Dueser, in the release.
Dueser also said that the company is eyeing acquisitions as a means of putting excess capital to use. First Financial has not bought a bank since 2010, when it purchased Sam Houston Financial.