First Financial Bankshares Raises Dividend 15.8% to $0.22

First Financial Bankshares, Inc. raised its quarterly cash dividend 15.8% to $0.22 per share from $0.19. Shares first traded ex-dividend at the higher rate on June 12, 2026, and again on September 14, 2026. The annual dividend is now $0.88 per share.

Why the dividend changed

The declaration did not identify a target payout ratio or a specific transaction behind the increase. President and Chief Executive David Bailey said the company was pleased to raise the quarterly dividend. The change was not associated with a split, merger, spin-off or special distribution.

The financial backdrop was improving when the board acted. First-quarter net income was $71.54 million, compared with $61.35 million a year earlier. Bailey attributed the year-over-year increase primarily to core balance-sheet growth and lower funding costs. Net interest income rose to $134.79 million, while the tax-equivalent net interest margin widened to 3.86%. Loans also increased from year-end levels, and nonperforming assets declined as a share of loans and foreclosed assets.

Results after the declaration reinforced that operating context. Second-quarter earnings reached $71.89 million, compared with $66.66 million a year earlier. Net interest margin expanded to 3.90%, helped by lower deposit costs and improved securities yields. Management said its priorities remained disciplined growth, prudent risk management and long-term shareholder value. The company did not provide a numerical earnings or dividend forecast.

Capital also remained substantial relative to regulatory requirements. The June quarterly filing reported a common equity Tier 1 capital ratio of 20.40% and a total risk-based capital ratio of 21.62%. Those figures do not guarantee future distributions, but they show that the dividend increase occurred while the bank maintained a sizeable regulatory capital buffer.

Dividend track record

The increase extends First Financial Bankshares’ dividend-growth streak to 32 consecutive years. The recent payment sequence shows a deliberate step-up pattern: the quarterly rate was $0.18 on December 13, 2024, rose to $0.19 beginning with the March 14, 2025 ex-dividend date and remained there through March 13, 2026, before advancing to $0.22.

Full-year totals show growth at varying speeds rather than a fixed annual increase. Dividends totaled $0.51 per share in 2020, $0.58 in 2021 and $0.66 in 2022. The annual total then reached $0.71 in 2023, $0.72 in 2024 and $0.75 in 2025. Annual growth slowed to 1.4% in 2024 before improving to 4.2% in 2025. The latest 15.8% quarterly increase is materially larger than those recent full-year changes.

The pattern matters because the company has generally raised the rate and then held it for several quarters. The two payments at $0.22 indicate that the higher rate was maintained after its introduction rather than structured as a one-time special dividend.

Is the dividend covered?

The dividend consumes 42% of earnings. That is less than half of reported earnings, leaving room between current profit and the cash distribution. The ratio provides an earnings cushion against ordinary fluctuations, although bank dividends also depend on credit costs, capital requirements and the ability of the banking subsidiary to transfer funds to the parent company.

SmarterDividends rates the dividend A with a safety score of 94. That means very safe (score 80-100): current earnings coverage, the long growth record and the payout level collectively indicate a low apparent risk of reduction under normal operating conditions. The grade is an assessment of present safety, not a guarantee of future payments.

Yield and valuation

At a share price of $31.77, the forward dividend yield is 2.76%. That is below the Financial Services sector median forward yield of 5.70%. The comparison shows that FFIN offers less current income than the sector midpoint despite its long record of increases.

The company’s market value is $4.6 billion. SmarterDividends’ fair-value estimate is $51.41, and its valuation verdict is undervalued. That estimate is separate from dividend safety: valuation can change with interest rates, bank earnings, credit quality and market pricing even when the distribution remains covered.

What to watch

The next quarterly results will provide the clearest operating update. Deposit costs and securities yields are central because they helped expand net interest margin in the second quarter. Loan growth, deposit balances and fee income from wealth management and mortgage banking will show whether the sources of recent earnings growth are continuing.

Credit trends also warrant attention. The second-quarter provision for credit losses rose to $4.18 million from $2.29 million in the first quarter, while nonperforming assets increased to 0.80% of loans and foreclosed assets from 0.66%. Neither development prevented the company from maintaining the $0.22 dividend, but both affect future earnings coverage if they persist.

Investors can also monitor the board’s next quarterly declaration and the 42% earnings payout ratio. Those items will show whether First Financial Bankshares maintains the new rate and whether earnings continue to cover it with a comparable margin.