First Financial Navigates Board Changes and Boosts Dividends Amid Strategic Growth

First Financial Bankshares, Inc. (NASDAQ: FFBC) concluded its 2025 annual shareholders’ meeting with a mix of procedural challenges and shareholder-friendly outcomes. While the board election faced a post-vote legal dispute, the company solidified its commitment to dividend growth, marking its 25th consecutive year of increases. Strategic priorities centered on customer-centric innovation and operational efficiency further underscored its long-term resilience.

Board Election: A Runoff and Lingering Legal Cloud

The election of First Financial’s thirteen-member board saw a contentious runoff process for two candidates. Initial voting results revealed Michael Brown (55%) and newcomer Emily Davis (52%) fell below the 60% threshold required for automatic election, triggering a runoff. On October 15, 2025, Davis secured victory with 62% of the runoff vote, replacing Brown. The final board includes notable figures such as retired Goldman Sachs executive Sally Pope Davis and CEO Scott Dueser, maintaining a balance of financial expertise and community leadership.

However, a pending legal challenge casts a shadow over the election’s legitimacy. While the runoff outcome finalized the board composition, the broader vote’s validity remains unresolved. Shareholders should monitor this legal battle, as it could disrupt governance stability.

Dividend Growth and Financial Fortitude

First Financial raised its quarterly dividend to $0.37 per share, a 7.9% increase over 2024. This marks the 25th year of uninterrupted dividend hikes, a rarity in the banking sector and a testament to the company’s capital management discipline.

Backing this growth is robust financial performance. The latest quarter reported $29.4 million in net income, up 1.4% year-over-year, while non-performing assets dipped to 0.18% of total assets, signaling strong asset quality. Capital ratios remain above regulatory benchmarks, providing a buffer for future earnings volatility.

Strategic Priorities: Innovation and Community Focus

The company emphasized three pillars for sustained growth:
1. Customer Experience: Enhancing digital banking tools and personalized services to retain clients in a competitive market.
2. Operational Efficiency: Streamlining processes to reduce costs and boost profitability, with a focus on automation.
3. Capital Strength: Maintaining high liquidity to support organic expansion while avoiding risky ventures.

Notably, First Financial’s emphasis on community banking aligns with its regional presence. Over 60% of its branches serve rural Texas markets, where customer loyalty remains high. Initiatives like low-cost small business loans and tech upgrades for branchless banking aim to deepen this advantage.

Conclusion: A Resilient Dividend Champion, With Caution

First Financial’s dividend record and financial health position it as a reliable income investment, particularly in a low-yield environment. The 25-year dividend growth streak and 1.4% net income rise in 2025 reflect operational resilience. However, the unresolved legal challenge around the board election introduces governance uncertainty—a rare risk for this traditionally stable institution.

Investors should weigh the dividend’s allure against governance risks. With a dividend yield of 3.2% (as of late 2025) and a five-year average ROE of 12.1%, the stock offers compelling income potential. Yet, monitoring the legal outcome is critical. If resolved favorably, FFBC could reclaim its status as a top-tier regional bank. For now, the fundamentals suggest a hold rating for conservative investors, with upside potential if governance clouds clear.

First Financial’s blend of dividend discipline and strategic focus positions it well for long-term growth—if its leadership can navigate current governance hurdles.