first financial 1st qtr 2011 final

1st Quarter 2011

Forward Looking Statement

The numbers, as of and for the three months ended March 31, 2011, contained within this presentationare unaudited as well as amounts related to the Company’s stock trading volume. Certain statementscontained herein may be considered “forward-looking statements” as defined in the Private SecuritiesLitigation Reform Act of 1995. These statements are based upon the belief of the Company’smanagement, as well as assumptions made beyond information currently available to the Company’smanagement, 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 torisks and uncertainties, actual results may differ materially from those expressed or implied by suchforward-looking statements. Factors that could cause actual results to differ materially from theCompany’s expectations include competition from other financial institutions and financial holdingcompanies; the effects of and changes in trade, monetary and fiscal policies and laws, includinginterest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations invalue of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations;changes in consumer spending, borrowing and savings habits; and acquisitions and integration ofacquired businesses, and similar variables. Other key risks are described in the Company’s reportsfiled 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-lookingstatements herein because of new information, future events or otherwise.

2

Who We Are

$3.8 billion financial holding company headquartered in Abilene, Texas

Group of 11 separately chartered banks

121 year history

Growth markets include 50 mile radius ofthe larger cities of Texas

Recognitions

KBW Honor Roll – One of Forty banks named – March 2011

SNL Financial top publicly traded community bank and sixth overall – March 2011

Ranked #2 in Texas and #7 in the United States by J.D. Power and Associates 2011 Retail Banking Customer Satisfaction Study – April 2011

4

5

What Makes Us Different

One Bank, Eleven Charters Concept

One Bank Consolidation of backroom operations (lower efficiency ratio) Agency agreements (customers may use any of our 52 locations)

Eleven Community Bank Charters Bank Presidents run their banks Local Boards – Movers and Shakers of the Community

Keep our banks locally focused Make sure we meet the needs of the community Help us make better loan decisions Help us market the bank

Up to $2.75 million of FDIC insurance available

6

Huntsville Acquisition Acquired November 2010

Huntsville, Texas 37,000 Residents Sam Houston State University – 17,000 Students

Fastest Growing University in Texas Headquarters of the Texas Department of Criminal Justice – 5,000 employees Strategically located on Interstate 45 – 70 miles north of Houston

$176 million in Assets* $153 million in deposits $91 million in loans

Approximately 1.63x book; 10.8x last twelve months earnings (tax effected) Huntsville acquisition is very similar to our model around Dallas/Fort Worth

and provides diversification #2 Market Share in Walker County – 21%

*As of March 31, 2011

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FFIN’s Unique Positioning in Texas

Bank Key MarketsBBVA Compass Rio Grande, Gulf Coast, Houston, Dallas, El Paso, Lubbock

Comerica, Inc. DFW, Austin, Houston, California, Michigan, Florida, Mexico

Encore Bancshares Houston, Florida

Frost San Antonio, Austin, Corpus Christi, DFW, Rio Grande

International Bancshares Corp. Rio Grande, Houston, San Antonio, Oklahoma

Prosperity Houston, DFW, Austin

Southside East Texas

Sterling (announced acquisition by Comerica) Houston, San Antonio, Dallas

Texas Capital DFW, Austin, San Antonio and Houston

ViewPoint Financial Dallas

Zion DFW and Houston

9

Texas: Large and Growing

Five most populous states:* Growth (2000 – 2009)

California 37.0 million 9.1%

Texas 24.8 million 18.8%

New York 19.5 million 3.0%

Florida 18.5 million 16.0%

Illinois 12.9 million 4.0%

* U.S. Census Bureau

10

Target Markets – Population Growth

Population growth (2000-2009) in FFIN expansion markets:*

Texas 18.8%

Bridgeport & Wise County 21.8%

Fort Worth / Tarrant County 23.8%

Cleburne, Midlothian & Johnson County 23.8%

Weatherford, Willow Park, Aledo 29.9%

Granbury & Hood County 25.2%

Stephenville & Erath County 9.6%

* U.S. Census Bureau

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Preferred Acquisition: Granbury and Glen Rose

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Core Markets: West Central Texas Markets served benefiting from well-established,

long- time customers

BANKASSET

SIZE*LOCATIONS

DEPOSIT

MARKET SHARE**

MARKET SHARE RANK**

First Financial Bank(Abilene, Clyde, Moran, Albany, Odessa)

$1,228 M 14 43% 1

First Financial Bank(Hereford)

$168 M 1 45% 1

First Financial Bank(Eastland, Ranger, Rising Star)

$189 M 3 51% 1

First Financial Bank(Sweetwater, Roby, Trent, Merkel)

$160 M 4 36% 1

First Financial Bank(San Angelo)

$390 M 2 19% 2

TOTALS $2,135M 24 * Data as of 03-31-11

** Data as of 06-30-10

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Expansion MarketsBANK ASSET SIZE* LOCATIONS

DEPOSIT MARKET SHARE**

MARKET SHARE RANK**

First Financial Bank(Cleburne, Burleson, Alvarado, Midlothian, Crowley)

$284 M 6 18% 2

First Financial Bank(Southlake, Trophy Club, Keller,

Bridgeport, Decatur, Boyd)

$303 M 3

3

7%

14%

5

3

First Financial Bank(Stephenville, Granbury, Glen Rose, Acton)

$337 M 7 22% 2

First Financial Bank(Weatherford, Aledo, Willow Park, Brock, Ft. Worth)

$398 M 7 26% 1

First Financial Bank(Mineral Wells)

$200 M 1 33% 1

First State Bank(Huntsville)

$176 M 1 21% 2

TOTALS $1,698 M 28* Data as of 03-31-11** Data as of 06-30-10

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Recent De Novo Growth

Cisco: Branch of Eastland – Expected to Open July 2011 Lamesa: Office of Trust Company – April 2011 Crowley: Branch of Cleburne – October 2010 Odessa: Branch of Abilene – February 2010 Fort Worth: Branch of Weatherford – February 2010 Odessa: Office of Trust Company – April 2009 Merkel: Branch of Sweetwater – July 2008 Brock: Branch of Weatherford – March 2008 Acton: Branch of Stephenville – March 2008 Albany: Branch of Abilene – May 2007 Fort Worth: Office of Trust Company – April 2007

Years with Company Years in Industry

Scott DueserChairman of the Board, President & Chief Executive Officer

35 40

J. Bruce Hildebrand, CPAExecutive Vice PresidentChief Financial Officer

9 33

Gary L. WebbExecutive Vice PresidentOperations

9 23

Gary S. GraggExecutive Vice PresidentCredit Administration

20 32

Marna YeriganExecutive Vice PresidentCredit Administration

1 25

Michele StevensSenior Vice PresidentAdvertising and Marketing

15 31

Courtney JordanSenior Vice PresidentTraining & Education

3 18

Kirk Thaxton, CTFAPresident, First Financial Trust & Asset Management

24 27

Senior Management at First Financial

15

Experienced Bank CEOs & PresidentsYears with Company Years in Industry

Ron Butler, FFB Abilene 18 29

Mike Mauldin, FFB Hereford 8 33

J.V. Martin, FFB Sweetwater 22 41

Kirby Andrews, FFB Sweetwater 20 23

Tom O’Neil, FFB Eastland 12 31

Mike Boyd, FFB San Angelo 35 38

Matt Reynolds, FFB Cleburne 6 29

Ron Mullins, FFB Stephenville 5 32

Doyle Lee, FFB Weatherford 15 39

Jay Gibbs, FFB Weatherford 9 37

Mark Jones, FFB Southlake 10 33

Ken Williamson, FFB Mineral Wells 9 39

Robert Pate, FFB Huntsville 14 30

Gaye Clements, FFB Huntsville 9 27

Gary Tucker, First Technology Services 20 36

16

17

$2,850$3,070

$3,212 $3,279

$3,776 $3,828

2006 2007 2008 2009 2010 2011

Growth in Total Assets

Asset Performance

(in millions)


18

$685 $739 $797 $836 $959 $969

$1,699 $1,807 $1,786 $1,849$2,154 $2,163

2006 2007 2008 2009 2010 2011Non Interest Bearing Interest Bearing

Deposit Growth

Growth in FFIN Total Deposits (in millions)

$2,384$2,546 $2,583 $2,685

$3,113 $3,132


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Deposit Products

Time25.6%

Demand30.9%

Money Market36.9%

Savings6.6%


$85 $73 $84 $77 $73 $81 $64

$160 $165 $182 $191 $175 $191 $199 $37 $31 $32 $52 $0

$330 $344 $394 $391 $406 $429 $407

$677 $760 $836 $855 $860

$990 $1,012

2005 2006 2007 2008 2009 2010 2011

Real Estate

Commercial

Student

Consumer

Agricultural

Loan Performance

Growth in FFIN Total Loans (in millions)

$1,373

$1,566 $1,514

$1,690 $1,682$1,528

$1,289

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21

Overview of Loan Portfolio

Commercial 24.2%

Agriculture3.8%

Consumer11.8%

Real Estate60.2%


Residential Development & Construction

6.4%

1-4 Family 35.8%

Commercial Development and

Construction3.7%

Commercial R/E 31.3%

Other R/E 22.8%

22

Breakdown of R/E Loan Portfolio


23

2005 2006 2007 2008 2009 2010 2011

End ofPeriod 54.5 57.6 60.0 60.6 56.4 54.3 53.7

Average Balances

57.6 56.6 59.8 61.1 59.5 56.0 54.2

Loan to Deposit Ratio


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Less than 1 year

1 to 3 years

3 to 5 years

5 to 10 years

10 to 15 years

Over 15 years

36.7% 12.2 15.7% 18.9% 7.3% 6.9% 2.3%

Variable and Fixed Rate Loans

Loan Portfolio Interest Rate Risk Analysis

Variable

RateFixed Rate


2006 2007 2008 2009 2010 2011*

FirstFinancial 0.30% 0.31% 0.80% 1.46% 1.53% 1.44%

Peer Group 0.60% 0.98% 2.62% 5.38% 5.58% Not available

Sound Lending Practices

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

25


26

$14,719 $16,201$17,462

$21,529

$27,612

$31,106 $32,501

$1,320 $2,061 $2,331

$7,957

$11,419$8,962

$2,127

2005 2006 2007 2008 2009 2010 2011

ALLL Provision

Allowance for Loan Losses and Provision for Loan Losses

(in thousands)


Summary of Bond Portfolio

Agencies 18.13%

Corporates 2.66%

Muni 34.79%

MBSs 15.54%

CMOs 27.93%

Treasuries 0.95%

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Municipal Allocation by State

State PercentageTexas 55.42%

Michigan 6.41%Wisconsin 5.64%

Washington 2.64%Illinois 2.63%

Massachusetts 2.50%New Jersey 2.36%Kentucky 2.08%Louisiana 1.82%California 1.78%

Utah 1.60%Minnesota 1.60%

Other 38 states 13.52%

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29

$1,300$1,428

$1,631 $1,664$1,784 $1,830

2006 2007 2008 2009 2010 2011

Growth in Trust Assets

Total Trust Assets – Book Value (in millions)

30

$7,665$8,746

$9,441 $9,083

$10,808

$3,044

$1,847 $2,010 $2,369 $2,117 $2,526

2006 2007 2008 2009 2010 2011

thru March 31st

Total Trust Fees

Growth in FFTAM Fees (Full year and 1st 3 months) (in thousands)

$46.0$49.5

$53.1 $53.8

$59.7

$11.5 $11.5 $13.2 $13.7 $13.7$16.3

2006 2007 2008 2009 2010 2011

$1.3

24th Consecutive Year of Increased Earnings

FFIN Earnings (Full year and 1st 3 months) (in millions)

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32

$1.48$1.59

$1.71 $1.72

$1.91

$0.37 $0.37 $0.42 $0.44 $0.44 $0.52

2006 2007 2008 2009 2010 2011

Strong Shareholder Earnings

Basic Earnings Per Share (Full year and 1st 3 months)

$0.04

1.82% 1.80%1.68% 1.72% 1.74% 1.72% 1.75%

1.12% 1.15% 1.10%

0.87%

-0.03% -0.18%

0.29%*

2004 2005 2006 2007 2008 2009 2010

FFIN Outperforms Peers

Percentage Return on Average AssetsPe

er G

roup

Firs

t Fin

anci

al

33

*(thru Dec. 31st)

15.09%16.15% 16.20% 15.87% 15.27%

13.63% 13.74%13.11% 13.33% 12.61%

9.45%

-1.83% -2.51%1.59%*

2004 2005 2006 2007 2008 2009 2010

Strong Return on Capital

Percentage Return on Average EquityPe

er G

roup

Firs

t Fin

anci

al

34

*(thru Dec. 31st)

35

2007 2008 2009 2010 2011*

Shareholders’Equity 335,495 368,782 415,702 441,688 456,215

As a Percent of Total Assets

10.93 11.48 12.68 11.70 11.92

Tangible

Capital270,288 304,779 352,550 369,164 383,803

Tier 1

Leverage Ratio9.23 9.68 10.69 10.28 10.03

Tier 1 Risk

Based Capital Ratio14.65 15.89 17.73 17.01 17.60

Risk Based

Capital Ratio15.62 17.04 19.10 18.26 18.86

Capital & Capital Ratios(dollars in thousands)


3.00%

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

5.00%

4thQtr. '07

1stQtr. '08

'2ndQtr. '08

3rdQtr. '08

4thQtr. '08

1stQtr. '09

2ndQtr. '09

3rdQtr. '09

4thQtr. '09

1stQtr. '10

2ndQtr. '10

3rdQtr. '10

4thQtr. '10

1stQtr. '11

First Financial Peer Group

Net Interest Margin

Quarterly Interest Margin

36

2005 2006 2007 2008 2009 2010 2011

FirstFinancial 52.48% 53.57% 52.83% 50.76% 50.11% 49.49% 49.07%

Peer Group 60.12% 61.29% 63.12% 68.12% 69.53% 66.79% not available

Working Harder and Smarter

Efficiency Ratio (FFIN vs. Peers)

37

Stock cost in January 2010 $54,230

Dividend received ($1.36 x 1,000 shares) $ 1,360

Decrease in stock price during 2010($54.23 to $51.25 X 1,000 shares) $2210,720

2010 return on investment -2.99%

2009 return on investment 0.69%


2007 return on investment -7.05%


5 year average return 10.50%

Total Return on Investment

($2,980)

Assume you owned 1,000 shares of FFIN stock on January 1, 2010…

38

Strong Stock Performance

-60.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

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

39

Challenges

Proposed Legislation from Washington

Keep nonperforming assets to a minimum

Maintain net interest margin

Lower efficiency ratio

40

Opportunities

Loan Growth

Mortgage Lending

Trust Services

Treasury Management

Potential Acquisitions

41

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