SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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Check the appropriate box:
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         (as permitted by Rule 14a-6(e)(2))
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[ ]     Soliciting Material Pursuant to Rule 14a-12

                        First Financial Bankshares, Inc.
                (Name of Registrant As Specified in its Charter)

    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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                        FIRST FINANCIAL BANKSHARES, INC.
                                 400 Pine Street
                              Abilene, Texas 79601
                                  325.627.7155


                NOTICE OF THE 2006 ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD APRIL 25, 2006

To our shareholders:

     We cordially  invite you to attend the annual meeting of our  shareholders,
which will be held in the Abilene Civic Center, 1100 North 6th Street,  Abilene,
Texas,  at 10:30  a.m.,  Central  time,  on  Tuesday,  April 25,  2006,  for the
following purposes:

     (1)  To elect 12 directors;

     (2)  To ratify the  appointment by our audit committee of Ernst & Young LLP
          as our independent auditors for the year ending December 31, 2006;

     (3)  To  adopt  an  Amended  and  Restated  Certificate  of  Formation  and
          voluntarily  elect to adopt and become  subject to the Texas  Business
          Organization Code;

     (4)  To change the par value of our Common  Stock from  $10.00 to $0.01 per
          share;

     (5)  To act on such other  business as may properly  come before the annual
          meeting or any adjournment thereof.

     Only shareholders of record at the close of business on March 15, 2006, are
entitled to notice of and to vote at the annual meeting or any  continuation  of
the meeting if it is adjourned.

     We have  included,  along with this  notice and proxy  statement,  our 2005
annual report, which describes our activities during 2005, and our Form 10-K for
the year ended  December 31, 2005.  The annual  report and Form 10-K do not form
any part of the material for solicitation of proxies.

     We hope that you will be present at the annual  meeting and the luncheon to
be held immediately afterward. We respectfully urge you, whether or not you plan
to attend the annual meeting,  to sign, date and mail the enclosed proxy card in
the  envelope  provided in order to  eliminate  any  question of your vote being
counted.  You can revoke  your  proxy in  writing at any time  before the annual
meeting,  so long as your written request is received by our corporate secretary
before your proxy is voted.  Alternatively,  if you submitted a proxy and attend
the annual meeting in person, you may revoke the proxy and vote in person on all
matters  submitted  at the  annual  meeting.  If you plan to attend  the  annual
meeting and  luncheon,  we request that you confirm your  attendance  by calling
325.627.7155.


                                             By order of the Board of Directors,



                                             KENNETH T. MURPHY, Chairman

March 24, 2006



                        FIRST FINANCIAL BANKSHARES, INC.
                                 400 Pine Street
                              Abilene, Texas 79601
                                  325.627.7155

                                 PROXY STATEMENT

                       2006 ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD APRIL 25, 2006


                                  INTRODUCTION

     Your  board of  directors  hereby  solicits  your proxy for use at the 2006
annual meeting of our shareholders and any continuation of this meeting if it is
adjourned.  The annual  meeting will be held in the Abilene Civic  Center,  1100
North 6th Street, Abilene, Texas, at 10:30 a.m., Central time, on Tuesday, April
25, 2006.

     Our  principal  executive  office is located at 400 Pine  Street,  Abilene,
Texas 79601. Our telephone number is 325.627.7155.

     We mailed this proxy statement and the accompanying proxy card on March 24,
2006. The date of this proxy statement is March 24, 2006.

                              VOTING OF SECURITIES

Record Date

     Your board of directors has  established the close of business on March 15,
2006, as the record date for determining the shareholders entitled to notice of,
and to vote at, the annual meeting. On the record date, we had 20,716,882 shares
of our common stock outstanding.

Quorum

     In order for any business to be conducted at the annual  meeting,  a quorum
consisting  of  shareholders  having voting rights with respect to a majority of
our outstanding  common stock on the record date must be present in person or by
proxy.  You may only vote if you hold your shares directly in your name. If your
shares are held in  "street  name" by your  broker,  your  broker  will send you
instructions  on how you can  instruct  your  broker to vote your  shares.  Your
broker  generally  cannot  vote  your  shares  on  non-routine  matters  without
instructions  from you.  Shares that are  represented  at the annual meeting but
abstain from voting on any or all matters and shares that are "broker non-votes"
will be  counted  in  determining  whether a quorum  is  present  at our  annual
meeting.  A "broker  non-vote"  occurs  when a broker or  nominee  votes on some
matters on the proxy card but not others  because he does not have  authority to
do so from the beneficial owner of the underlying shares.

Required Vote

     The  affirmative  vote of a  plurality  of the  shares  cast at the  annual
meeting is required to elect a nominee for director. The affirmative vote of the
holders of at least  two-thirds of our  outstanding  shares  entitled to vote is
required  to  approve  the  amendment  and  restatement  to our  certificate  of
formation  (including  the  election  to become  subject  to the Texas  Business
Organization  Code) and to reduce our par value  from  $10.00 per share to $0.01
per share.  The  affirmative  vote of a majority  of shares  entitled to vote is
required to approve  the  ratification  of Ernst & Young LLP as our  independent
accountants or any other matter that may come before the meeting. If you abstain
from voting or withhold  authority to vote in the  election of a director,  your
abstention or withholdings  will have no effect.  However,  as to other matters,
you abstention or  withholding  authority will have the effect of a vote against
such matters because  approval is premised on the  affirmative  vote of at least
two-thirds  or a majority  (as the case may be) of all shares  entitled to vote.



Broker non-votes will have no effect on the outcome of director  elections,  but
will count as negative votes for all other matters.

Shareholder List

     A list of shareholders  entitled to vote at the annual meeting,  which will
show each  shareholder's  address and the number of shares  registered in his or
her name,  will be open to any shareholder to examine for any purpose related to
the annual  meeting.  Any  shareholder  may examine  this list  during  ordinary
business hours commencing March 24, 2006, and continuing through the date of the
annual meeting at our principal office, 400 Pine Street, Abilene, Texas 79601.

                    SOLICITATION AND REVOCABILITY OF PROXIES

Solicitation

     We  will  bear  the  expense  to  solicit   proxies,   which  will  include
reimbursement  of expenses  incurred by  brokerage  firms and other  custodians,
nominees and fiduciaries to forward solicitation  materials regarding the annual
meeting to beneficial  owners.  Our officers and  directors may further  solicit
proxies from shareholders and other persons by telephone or oral  communication.
We will not pay these officers any extra  compensation for participating in this
solicitation.  We may  engage  Georgeson  Shareholder  to  assist  us  with  the
solicitation of proxies and, if so, would expect to pay that firm  approximately
$15,000 for their services, plus out-of-pocket expenses.

Proxies and Revocation

     Each  executed  and  returned  proxy  card will be voted  according  to the
directions indicated on that proxy card. If no direction is indicated, the proxy
will be voted  according to the board of directors'  recommendations,  which are
contained in this proxy  statement.  Your board of directors  does not intend to
present,  and has no information  that others will present,  any business at the
annual  meeting that  requires a vote on any other  matter.  If any other matter
requiring a vote properly comes before the annual  meeting,  the proxies will be
voted in the discretion of the proxyholders named on the proxy.

     Each  shareholder  giving a proxy  has the  power to  revoke it at any time
before the shares of our common stock it represents are voted.  This  revocation
is effective  upon receipt,  at any time before the annual  meeting is called to
order, by our corporate secretary of either (1) an instrument revoking the proxy
or (2) a duly  executed  proxy  bearing a later date than the  preceding  proxy.
Additionally,  a shareholder may change or revoke a previously executed proxy by
voting in person at the annual meeting.

                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

General

     Your board of directors  currently consists of 14 directors.  At the annual
meeting, 12 directors are to be elected,  each for a term of one year. Under our
bylaws,  an  individual  may not stand for election or  reelection as a director
upon  attaining 72 years of age,  unless he owns at least 1% of the  outstanding
shares  of our  common  stock  and is less  than 75 years  of age.  Three of our
current directors (Mr.  McDaniel,  Dr. Ramsey and Mr. Parker) will not stand for
reelection at the annual meeting due to these bylaw provisions. While our bylaws
fix the  number of  directors  at a number not less than three nor more than 30,
the  board of  directors  has  fixed the  number  of  directors  at 12 for 2006.
Although we do not contemplate that any of the nominees will be unable to serve,
if such a situation arises before the annual meeting,  the proxies will be voted
to  elect  any  substitute  nominee  or  nominees  designated  by your  board of
directors.

     Under Nasdaq rules, a majority of your board of directors must be comprised
of independent directors. The board has determined that each director nominated,
except Messrs.  Dueser and Murphy, is independent under applicable Nasdaq rules.
The  Board  of  Directors  has  not yet  made a  determination  of Mr.  Edwards'
independence.

                                       -2-



Nominees

     The names and  principal  occupations  of the  nominees,  together with the
length of  service as a  director  and the number of shares of our common  stock
beneficially  owned by each of them on  February  1, 2006,  are set forth in the
following table, except as otherwise  indicated,  the named beneficial owner has
sole voting and investment power with respect to shares held by him or her:



                                                                                      Shares of
                                       Years as                                      Bankshares       Percent
                                       Director    Principal Occupation             Beneficially     of Shares
Name                           Age        (1)      During Last Five Years               Owned       Outstanding
----                           ---        ---      ----------------------               -----       -----------
                                                                                          
Joseph E. Canon                 63        10       Executive Director,                 11,447            0.06%
                                                     Dodge Jones Foundation, a
                                                     private charitable foundation

Mac A. Coalson                  66        10       Real Estate and Ranching           226,230            1.09%

David Copeland                  50         8       President, Shelton Family          133,946 (2)        0.65%
                                                     Foundation, a private
                                                     charitable foundation

F. Scott Dueser                 52        15       See "Executive Officers" on        225,119 (3)(4)     1.09%
                                                     page 6

Murray Edwards                  54         -       Principal, The Edwards Group        43,923 (5)        0.21%

Derrell E. Johnson              66         6       President, American Council         40,000            0.19%
                                                     of Engineering Companies
                                                     Life Health Trust

Kade L. Matthews                47         8       Ranching and Investments           189,621            0.92%

Bynum Miers                     69        14       Ranching                            57,103 (6)        0.28%

Kenneth T. Murphy               68        35       See "Executive Officers" on        157,896            0.76%
                                                     page 6

Dian Graves Stai                65        13       Chair, Mansefeldt Investment Inc.   72,593            0.35%

F. L. Stephens                  67         8       Retired Chairman and Chief          59,665            0.29%
                                                     Executive Officer, Town &
                                                     Country Food Stores, Inc.

Johnny E. Trotter               54         3       Ranching, Farming and Cattle        90,481            0.44%
                                                     Feeding

Shares beneficially owned by all executive officers and directors*                  1,334,720 (4)        6.44%

* See "Security Ownership of Certain Beneficial Owners and Management."

(1)  The years  indicated  are the  approximate  number of years each person has
     continuously  served as a director,  or, prior  thereto,  of First National
     Bank of Abilene,  which became our  wholly-owned  subsidiary in April 1973,
     when all the then  directors of First  National Bank of Abilene  became our
     directors.
(2)  Includes  123,281  shares  that are owned by trusts for which Mr.  Copeland
     serves as trustee or co-trustee to which he disclaims beneficial ownership.
     Mr. Copeland is also a director of Harte-Hanks, Inc.
(3)  Includes 2,208 shares of our common stock issuable upon exercise of options
     presently  exercisable or  exercisable  within 60 days of February 1, 2006.
     Also  includes  39,988  shares  owned by his  wife of  which  he  disclaims
     beneficial ownership.
(4)  Includes  shares  indirectly  owned as of  February  1,  2006  through  the
     employee stock ownership plan portion of the profit sharing plan which each
     participant has sole voting powers, as follows: Mr. Dueser - 23,200 and all
     executive officers and directors as a group - 31,973.
(5)  Includes  12,642 shares our common stock owned by Mr.  Edward's  spouse and
     minor child. Mr. Edwards and his wife were a 27.5% owner of Clyde Financial
     Corporation  that was acquired by the Company in February  2005. See Annual
     Report on Form 10-K for additional disclosures related to this acquisition.
(6)  Includes 8,933 shares of our common stock owned by Mr. Miers' spouse.



                     YOUR BOARD OF DIRECTORS RECOMMENDS YOU
               VOTE "FOR" THE ELECTION OF EACH OF THESE NOMINEES.

                                      -3-



                                   PROPOSAL 2

               RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

     The audit  committee of your board of directors has selected  Ernst & Young
LLP to serve as our  independent  auditors for the year ending December 31, 2006
and to serve until the next annual meeting in April 2007.  Ernst & Young LLP has
served as the Company's independent auditors since 2002. We have been advised by
Ernst & Young LLP that neither its firm nor any of its members has any financial
interest,  direct or indirect,  in us, nor has had any connection with us or any
of our subsidiaries in any capacity other than independent auditors.  Your board
of directors  recommends that you vote for the  ratification of the selection of
Ernst & Young LLP.  Shareholder  ratification  of the selection of Ernst & Young
LLP  as  our   independent   auditors  is  not   required  by  our  articles  of
incorporation,  bylaws or  otherwise.  Nevertheless,  your board of directors is
submitting  this  matter to the  shareholders  as what we believe is a matter of
good corporate  practice.  If the  shareholders do not ratify the appointment of
Ernst  & Young  LLP,  then  the  appointment  of  independent  auditors  will be
reconsidered by our audit  committee.  Even if the appointment is ratified,  the
audit  committee in its  discretion  may direct the  appointment  of a different
independent audit firm at any time during the year if it is determined that such
a change  would be in the best  interests  of the Company and its  shareholders.
Representatives  of Ernst & Young LLP are  expected  to be present at the annual
shareholders meeting, and they may have the opportunity to make a statement,  if
they desire to do so, and to respond to appropriate questions.


           YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
     RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
                     INDEPENDENT AUDITORS FOR THE YEAR 2006

                                      -4-



                                   PROPOSAL 3

                                PROPOSAL TO ADOPT
                AN AMENDED AND RESTATED CERTIFICATE OF FORMATION
                         TO REFLECT CHANGES IN TEXAS LAW

Background

     Your board of directors has approved the Amended and Restated  Certificated
of Formation in the form attached  hereto as Appendix A, subject to  shareholder
approval.  Our current restated  articles of  incorporation  were filed with the
Texas  Secretary  of State in 1972 and have been  amended  several  times in the
intervening  decades. We refer to the restated articles of incorporation and all
amendments as the "Current Articles." Since the original date of adoption of the
Current  Articles,  Texas law governing  corporations  has been amended numerous
times,  most  recently by the adoption of the new Texas  Business  Organizations
Code, or TBOC. The TBOC will eventually  replace the Texas Business  Corporation
Act,  or  TBCA,  and the  other  miscellaneous  Texas  corporate  statutes  that
currently govern our affairs.

     The TBOC became  effective on January 1, 2006,  for all entities  formed in
Texas on or after that date. Unless existing entities elect early adoption to be
governed  by the TBOC,  the TBOC will not apply to them  until  January 1, 2010.
After  January 1, 2010,  all  entities  formed in Texas will be  governed by the
TBOC. Because we were originally  incorporated in 1956, we are currently subject
only  to  the  TBCA  and  the  other  miscellaneous  Texas  corporate  statutes.
Accordingly,  unless we elect to become subject to the TBOC, we will continue to
be subject to the TBCA and other  miscellaneous  Texas corporate  statutes until
January 1, 2010.

     Enacted  during the Texas  Legislature's  2003 regular  session and refined
during its 2005 regular session, the TBOC has been adopted as part of an ongoing
legislative  mandate to reorganize  all Texas  statutes into  centralized  codes
grouped by  subject  matter.  The TBOC's  stated  purpose  is to  rearrange  the
disparate  business  statutes  into a more  logical  order,  employ a consistent
format and numbering system,  eliminate duplicative and ineffective  provisions,
and restate the law in modern American  English.  For the most part, the TBOC is
not intended to effect  substantive  changes in the Texas law governing business
organizations.  Nevertheless, there are some substantive differences between the
TBCA and the provisions of the TBOC applicable to business corporations that are
relevant to a public company such as us. For example:

     o Section 3.104 of the TBOC permits a corporation  to remove  officers with
or without cause. The TBCA permitted the board of directors to remove an officer
only if the best interests of the corporation would be served by such removal.

     o Section  6.053 of the TBOC is derived  from  provisions  of the TBCA that
enable  a  corporation  to have a  valid  meeting  without  giving  notice  to a
shareholder  when  certain  previous  notices  or  distributions  mailed to that
shareholder's  address  have been  returned  undeliverable.  The  revised law in
Section 6.053(b),  however,  departs from the TBCA and incorporates by reference
SEC rules that permit a publicly traded company not to provide notice to a "lost
security  holder."  Under the SEC's  rules,  a "lost  security  holder"  means a
securityholder  to  whom  an  item  of  correspondence  that  was  sent  to  the
securityholder   at  the  address  contained  in  the  transfer  agent's  master
securityholder  file  has  been  returned  as  undeliverable,  and for  whom the
transfer agent has not received  information  regarding the securityholder's new
address.

     o Section 8.103 of the TBOC provides that a determination that the standard
for indemnification has been met may be made by a committee of one disinterested
director  if no quorum of  disinterested  directors  can be  obtained.  The TBCA
requires two such directors.

     o Sections  11.201 and 11.202 of the TBOC extend the ability to reinstate a
voluntarily  terminated  corporation from 120 days under the TBCA to three years
under the TBOC,  though  the  ability  to  reinstate  is  limited  to  specified
circumstances.

     o Section 21.352 of the TBOC adds the requirement  that a shareholder  must
request in writing that an annual meeting be held before  attempting to obtain a
court order to force the meeting,  if an annual meeting has not been held in the
preceding 13 months. The TBCA does not require such written notice.

                                      -5-



     In addition to these  differences  between the TBOC and the TBCA,  the TBOC
clarifies  certain  provisions  in current  law. For  instance,  under the TBOC,
shareholders  may by  resolution  approve  indemnification  and  advancement  of
expenses of any officer,  employee,  agent or delgate of the  corporation who is
not also a director,  which was only  implied in existing  law.  Also,  the TBOC
clarifies that permitted  self-insurance includes implementation by an indemnity
contract,  and harmonizes certain provisions,  including dissenters' rights, for
short-form  and other  mergers.  Moreover,  the TBOC revises the  procedures for
making filings with the Texas  Secretary of State and changes many of the filing
fees.

     Your board of  directors  believes  it to be in our best  interest to elect
early  adoption of the TBOC to take  advantages  of these  changes in Texas law.
Additionally,  your board of directors  believes it to be a  convenient  time to
consolidate the provisions of the Current  Articles into one document for easier
reference.

Purpose

     This proposal is primarily  intended to modernize  the Current  Articles by
conforming  them to the TBOC and by deleting  provisions  that are  unnecessary,
ineffective or otherwise  inappropriate as a result of the adoption of the TBOC.
If this proposal is approved,  the Amended and Restated Certificate of Formation
will become  effective  upon filing with the Texas  Secretary of State.  We will
also file a brief  statement  with the Texas  Secretary of State  electing to be
governed by the TBOC.  If this  proposal is not  approved,  then the Amended and
Restated  Certificate of Formation  will not become  effective and the TBOC will
not apply to us until January 1, 2010, at the latest.

Description of Amended and Restated Certificate of Formation

     The following table sets forth a general  description of the changes to our
Current Articles  effected by the proposed  Amended and Restated  Certificate of
Formation.  The full text of the proposed  Amended and Restated  Certificate  of
Formation is set forth in Appendix A.


                                           Change Effected by Amended and
Current Articles                          Restated Certificate of Formation
----------------                    --------------------------------------------

Article One                         This provision is unchanged.
(Name)

Article Two                         The TBOC  provides that perpetual  existence
(Duration)                          is the default rule for  Texas corporations.
                                    Therefore,  current  language  concerning
                                    perpetual  duration  is redundant and has
                                    been deleted. This provision has also been
                                    updated to clarify under the TBOC that the
                                    we are a domestic, for-profit corporation.

Article Three                       Current  drafting  practice is to provide
(Purposes)                          that a  corporation  may engage "in any
                                    lawful  activity  for which a  corporation
                                    may be  incorporated"  rather than to
                                    enumerate permitted activities, and the
                                    language has been modified appropriately.

Article Four                        The number of  authorized  shares  remains
(Capital Stock)                     unchanged  but the par value has been
                                    reduced  to  one  cent  ($0.01).  The  draft
                                    proposed   Amended and  Restated Certificate
                                    of Formation included as Appendix A assumes
                                    the approval of Proposal 4 to reduce the par
                                    value of our shares to one cent ($0.01). If
                                    Proposal 4 is not approved then the draft
                                    language will be revised to reflect the
                                    current par value of ten dollars ($10.00).

                                      -6-



Article Five                        The TBOC does not require this provision to
(Minimum Capital)                   be included and it has been deleted.

Article Six                         (New Article Five) This provision has been
(Registered Agent &                 updated to reflect our current registered
Registered Office)                  agent and registered office.

Article Seven                       (New Article Six) This  provision  will be
(Board of Directors)                updated to include our current  roster of
                                    directors at the time of the filing.

Article Eight                       This  provision  is not  required  to be
(Incorporators)                     repeated  under  the  TBOC and has been
                                    deleted.

Article Nine                        (New Article Seven) This provision has been
(Cumulative Voting)                 revised to use modern  language,  but  its
                                    substance--the denial of cumulative voting--
                                    is unchanged.

Article Ten                         (New Article Eight) This provision is
(Denial of Preemptive Rights)       unchanged.


Article Eleven                      (New  Article  Nine)  This   provision  has
(Liability and Indemnification)     been  revised  to  use   terminology
                                    consistent  with the rest of the Amended and
                                    Restated  Certificate  of Formation
                                    and to update section references, but its
                                    substance is otherwise unchanged.

Impact of Proposal 4

     Proposal 4 set forth below relates to the reduction of the par value of our
authorized  shares from ten dollars ($10.00) to one cent ($0.01).  If Proposal 4
is not approved, and this Proposal 3 is approved,  then the Amended and Restated
Certificate  of  Formation  will be adopted in the form set forth as Appendix A,
except that the draft  language will be revised to reflect the current par value
of ten dollars ($10.00) per share.

   YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ADOPTION OF THE
    AMENDED AND RESTATED CERTIFICATE OF FORMATION, INCLUDING ADOPTION OF THE
                       TEXAS BUSINESS ORGANIZATIONS CODE

                                      -7-



                                   PROPOSAL 4

                          AMENDMENT TO CURRENT ARTICLES
                   TO CHANGE THE PAR VALUE OF OUR COMMON STOCK
                               TO $0.01 PER SHARE

     Historically,  par value served as a stated price at which a  corporation's
stock would be issued.  Nevertheless,  we believe the  protection par values may
have provided  investors has become less important over time.  Regulation of the
securities markets and increased financial  transparency has contributed to this
trend.  Also, as markets have become more liquid,  with prices  responding  more
rapidly to market  developments,  it has  became  increasingly  difficult  for a
corporation  to commit  in  advance  to issue  securities  at their  par  value.
Instead,  for public companies,  the market sets the price at which stock may be
issued or otherwise sold. For this reason, par value is generally  considered to
be an anachronistic  concept, and many corporations today set their par value at
$0.01 per share or even less. In fact,  under Texas law, stock without par value
is permissible.

     Our Current  Articles  authorize  40,000,000  shares,  par value $10.00 per
share. Although the ten-dollar par value may have had merit in 1956 when we were
incorporated, we no longer believe it is a meaningful metric. In fact, in recent
years our ability to split our stock or issue stock  dividends has been hampered
because of the $10.00 par value.  In  addition,  we have  surveyed  the  charter
documents of regional bank holding companies in the Southwest area of the United
States and have found that  substantially all of them set par value at $0.01 per
share or less. Accordingly, your board of directors has determined that it is in
our best  interests to reduce the par value of our authorized  shares,  which we
refer to as our common stock, from $10.00 per share to $0.01 per share.

     A change  in the par  value of our  stock  will have no effect on the total
dollar amount of our total shareholders' equity and no substantive effect on our
balance  sheet.  If the  change is  approved,  the common  stock  account on our
balance  sheet at $10.00 per share will be reduced to reflect the product of the
number of shares  outstanding and the new par value of $0.01 per share,  and the
difference will be transferred to the capital surplus account.

     Proposal 3 relates to the approval of an Amended and  Restated  Certificate
of Formation.  If the Amended and Restated  Certificate of Formation is approved
pursuant to Proposal 3 and this Proposal 4 is also approved,  then the reduction
in par  value  will  be  effected  by  adoption  of  the  Amended  and  Restated
Certificate of Formation.  If Proposal 3 is not approved, but this Proposal 4 is
approved,  then the  decrease  in par value will be  effected  by adoption of an
amendment  to our Current  Articles.  A draft of the  proposed  amendment to the
Current Articles is set forth in Appendix B.

     YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE REDUCTION OF
                        OUR PAR VALUE TO $0.01 PER SHARE

                                      -8-



Executive Officers

     Set forth in the following table are our executive officers, and the shares
of our common stock  beneficially  owned by each of them as of February 1, 2006,
except as otherwise  indicated,  the named executive officer has sole voting and
investment power with respect to the shares he holds:




                                                   Years                                     Shares of
                                                   Served                                   Bankshares      Percent of
                                                   in Such    Principal Occupation         Beneficially       Shares
Name                     Age   Office               Office    During Past 5 Years              Owned        Outstanding
----                     ---   ------               ------    -------------------              -----        -----------
                                                                                             
Kenneth T. Murphy        68    Chairman               19      Chairman, First Financial      157,896           0.76%
                                                              Bankshares, Inc.;
                                                              Chairman, President and
                                                              Chief Executive Officer,
                                                              First Financial
                                                              Bankshares, Inc.
                                                              (1986-2000); Chairman,
                                                              First National Bank of
                                                              Abilene* (1993-2000)

F. Scott Dueser          52    President and           5      President and Chief            225,119 (1)(2)    1.09%
                               Chief Executive                Executive Officer of
                               Officer                        First Financial
                                                              Bankshares, Inc.;
                                                              Chairman, First National
                                                              Bank of Abilene*;
                                                              President and Chief
                                                              Executive Officer, First
                                                              National Bank of Abilene*
                                                              (1991-2001); Executive
                                                              Vice President of First
                                                              Financial Bankshares,
                                                              Inc. (1999-2001)

J. Bruce Hildebrand      50    Executive Vice          3      Executive Vice President         3,249 (1)       0.02%
                               President and                  and Chief Financial
                               Chief Financial                Officer of First
                               Officer                        Financial Bankshares,
                                                              Inc.; Partner, KPMG LLP
                                                              (1990-2002)

Robert S. Patterson      65    Executive Vice         12      Executive Vice President        11,643 (1)(3)    0.06%
                               President                      of First Financial
                                                              Bankshares, Inc.; Senior
                                                              Vice President of First
                                                              Financial Bankshares,
                                                              Inc. (1994 to 2005)

Gary L. Webb             48    Executive Vice          3      Executive Vice President         2,380 (1)(4)    0.01%
                               President                      of First Financial
                                                              Bankshares, Inc.;
                                                              Partner, BearingPoint
                                                              (2002); Partner, Arthur
                                                              Andersen (2001-2002);
                                                              Senior Manager, Arthur
                                                              Andersen (1998-2001)


*A bank subsidiary.
(1)  Includes  shares  indirectly  owned as of  February  1,  2006  through  our
     employee stock  ownership  plan portion of the profit  sharing plan,  which
     each  participant has sole voting power,  as follows:  Mr. Dueser - 23,200,
     Mr. Hildebrand - 402, Mr. Patterson - 4,244, and Mr. Webb - 287.
(2)  Includes 2,208 shares of our common stock issuable upon exercise of options
     presently  exercisable or  exercisable  within 60 days of February 1, 2006.
     Also  includes  39,988  shares  owned by his  wife of  which  he  disclaims
     beneficial ownership.
(3)  Includes 4,717 shares of our common stock issuable upon exercise of options
     presently exercisable or exercisable within 60 days of February 1, 2006.
(4)  Includes 666 shares of our common stock  issuable  upon exercise of options
     presently exercisable or exercisable within 60 days of February 1, 2006.



                                      -9-



                                   MANAGEMENT

     Amounts and prices related to shares of our common stock have been adjusted
to give effect to all stock splits and stock dividends.

Executive Compensation

     The following  table provides  individual  compensation  information on our
chief executive officer and our five most highly compensated  executive officers
during 2005 whose total annual salary and bonus was in excess of $100,000.

                           Summary Compensation Table




                                                                                       Long Term
                                                                                      Compensation
                                                                   Annual                Awards
                                                                Compensation     -----------------------    All Other
                                                            --------------------       Securities          Compensation
Name and Principal Position                         Year    Salary ($) Bonus ($) Underlying Options(#)(1)    ($)(2)
---------------------------                        -----    -------------------- -----------------------   -------------
                                                                                             
Kenneth T. Murphy, Chairman of the Board            2005          -         -                 -             $145,257 (3)
     First Financial Bankshares, Inc.               2004          -         -                 -              234,990 (3)
                                                    2003          -         -                 -              345,514 (3)

F. Scott Dueser, President and Chief                2005     385,000        -              5,333              45,918 (2)
   Executive Officer                                2004     356,000   $19,758                -               33,454 (2)
     First Financial Bankshares, Inc.               2003     356,000        -              5,833              14,659 (2)

J. Bruce Hildebrand, Executive Vice President       2005     230,000        -              2,666              27,907 (2)
   and Chief Financial Officer                      2004     212,000    11,766                -               33,454 (2)
     First Financial Bankshares, Inc.               2003     200,000        -              3,333              13,459 (2)

Gary L. Webb, Executive Vice President              2005     218,000        -              2,666              26,513 (2)
    First Financial Bankshares, Inc.                2004     208,000    11,544                -               32,164 (2)
                                                    2003     166,667    15,000             3,333                  -

Robert S. Patterson, Executive Vice President       2005     171,000        -              2,000              27,529 (2)
    First Financial Bankshares, Inc.                2004     165,000     9,458                -               20,959 (2)
                                                    2003     158,333        -              2,500              12,682 (2)

(1)  Adjusted for stock splits and stock dividends.
(2)  Represents the  contributions  we made to our profit  sharing plan,  401(k)
     match and make whole plan for the benefit of such  officer and country club
     dues.
(3)  Represents  amount paid under his  consulting  agreement,  pension plan and
     deferred compensation agreement.

Note: Amounts  have been  reported  solely in  compliance  with  applicable  SEC
     regulations,  and may not  accurately  reflect wages or other  compensation
     under applicable IRS regulations.

     We also provide  liability  insurance for all of our directors and officers
at an annual cost of approximately $183,000 and have contractual indemnification
arrangements  with  directors  and  select  officers  which may,  under  certain
circumstance,  require us to compensate them for costs and liabilities  incurred
in actions  brought  against them while acting in their official  capacities for
the Company.



                                      -10-



     The following table sets forth certain information concerning stock options
activity during the last fiscal year by the named executive  officers  (adjusted
for stock split):

                 Aggregated Option Exercises in Last Fiscal Year
                        and Fiscal Year End Option Values




                                                           Number of Securities             Value of Unexercised
                                                          Underlying Unexercised            In-the-Money Options
                             Shares                    Options at Fiscal Year End (#)     at Fiscal Year End ($)(1)
                           Acquired on      Value       ---------------------------      ---------------------------
Name                       Exercise (#)   Realized ($)  Exercisable   Unexercisable      Exercisable   Unexercisable
----                       ------------   ------------  -----------   -------------      -----------   -------------
                                                                                         
Kenneth T. Murphy                  -         $      -           -              -          $     -          $     -

F. Scott Dueser                1,041           19,134       1,166         11,042           13,945           89,905

J. Bruce Hildebrand              666           10,103           -          5,333                -           37,176

Robert S. Patterson            2,082           54,299       4,217          4,500           81,170           39,170

Gary L. Webb                       -                -         666          5,333            7,965           37,176

(1)  Based upon the  closing  price per share of our  common  stock of $35.06 on
     December 31, 2005.



Compensation pursuant to Employee Benefit Plans

General

     We have both a defined  benefit  pension plan and a profit sharing plan. An
employee is eligible to become a participant  in the profit  sharing plan on the
January 1  coincident  with or  immediately  following  the date his  employment
begins.  The pension plan was frozen effective January 1, 2004 and new employees
hired after that date are not eligible to  participate  in the plan. See changes
made to these plans  described  below.  With our subsidiary  banks, we adopted a
flexible  spending  account benefit plan for all employees that became effective
in 1988. First Financial Bank,  National  Association,  Cleburne,  adopted these
plans  effective  in  1991.   First  Financial   Bank,   National   Association,
Stephenville  adopted these plans  effective in 1993.  San Angelo  National Bank
adopted the pension and flexible spending account benefit plan effective in 1994
and profit  sharing plan  effective in 1995.  Weatherford  National Bank adopted
these plans  effective in 1996.  First  Financial  Bank,  National  Association,
Southlake,  adopted all benefit  plans  effective in 1998.  City  National  Bank
adopted all benefit plans effective in 2002. First Technology Services, Inc. and
First Financial Trust & Asset Management Company, National Association,  adopted
all benefit plans effective in 2003.

Profit Sharing Plan

     We, and each of our  subsidiaries  that  participates in the profit sharing
plan,  determine by a formula on an annual basis the  contribution  that it will
make  to the  profit  sharing  plan  from  such  employer's  operating  profits.
Contributions  under the  profit  sharing  plan are  administered  by and at the
discretion of the Compensation Committee.  Effective January 1, 2002, we added a
401(k) feature to our profit sharing plan which allows the  participants to make
pre-tax  contributions to the plan. Effective January 1, 2004, the plan includes
a safe  harbor  Company  match  equal  to 100% of  each  Participant's  deferral
contributions  not exceeding 3% of the participant's  compensation,  plus 50% of
each participant's  deferral  contributions in excess of 3% but not in excess of
5% of the participant's compensation. Prior to January 1, 2004, the plan did not
include a mandatory  Company match but did provide a safe harbor profit  sharing
contribution equal to 3% of the qualifying participant's compensation. Under the
profit sharing plan,  contributions by employees are not required as a condition
of participation. Each participating employer's annual contribution is allocated
among the accounts of the active plan participants employed by such employer, in
the ratio that each  participant's  compensation bears to the total compensation
of all  participants  of such  employer.  Compensation  is  defined as the total
amount paid to an employee during the year, including bonuses,  commissions, and
overtime pay, but excluding  reimbursed  expenses,  group insurance benefits and
pension and profit sharing contributions.  However, the Internal Revenue Service
limits the  compensation  amount used to calculate a participant's  benefit to a
maximum of $210,000.  Additionally,  the annual  addition  amount  (which is the
aggregate  of employer and  employee  contributions)  that may be allocated to a
participant is limited to $42,000.

                                      -11-



     Effective  July 1, 2003, we added an employee  stock  ownership plan (ESOP)
feature  to our profit  sharing  plan.  Shares of our  common  stock held by the
profit sharing plan were allocated to participants  generally based on the ratio
that each  participant's  balance  bears to the  total  balances  in the  profit
sharing  plan.  Participants  are given the option to receive cash  dividends on
these shares in cash or reinvest the dividends in additional shares.

     The  profit  sharing  plan  provides  for  benefits  to vest  in  graduated
percentages for the first six years of participation,  with benefits being fully
vested after seven years of credited  service except for amounts  contributed to
an employee's account under the safe harbor provisions and shares resulting from
the  reinvestment of dividends in the ESOP which are  immediately  fully vested.
Generally,  an employee's benefit at normal retirement will be the contributions
allocated to his account while a  participant,  increased by gains and decreased
by losses  from  investments  of the trust,  and  increased  by any  forfeitures
allocated to his account. An employee is always fully vested with respect to any
voluntary  contributions he makes. The plan also provides for immediate  vesting
upon  attainment of normal  retirement  age and upon death or  disability.  If a
participant  terminates employment for any other reason, the total amount of his
employee   contribution   account  and  the  vested   portion  of  his  employer
contribution account become eligible to be distributed.

     Effective  January 2005, the Company adopted a "make whole" program whereby
executives  whose Company  contributions to the profit sharing plan and employer
match under the 401(k)  feature  were  limited due to Internal  Revenue  Service
limitations will now have  contributions  made to a non-qualified  plan equal to
the amount under  qualified  plans as if there were no Internal  Revenue Service
limitations.  For 2005,  contributions  were made for Mr. Dueser, Mr. Hildebrand
and Mr. Webb totaling $20,335, $2,324 and $930, respectively.

Pension Plan

     The pension plan requires  annual  contributions  sufficient to provide the
pension  benefits  accruing  to  employees  under the pension  plan.  The annual
benefit  for a  participant  in the  pension  plan  who  retires  on his  normal
retirement  date is the accrued  benefit  (as  defined in the  pension  plan) at
December 31, 1988,  plus 1.25% of average  compensation  multiplied  by years of
service from January 1, 1989. "Average compensation" is the average compensation
during  the  10  years   immediately   preceding  the  date  of   determination.
Compensation  means  the  total  amount  paid to an  employee  during  the  year
including  bonuses,  commissions,  and overtime  pay, but  excluding  reimbursed
expenses, group insurance benefits and pension and profit sharing contributions.
There are  provisions  in the pension  plan for early  retirement  with  reduced
benefits.  There is no vesting of benefits until a participant  has five or more
years of credited  service or upon  reaching  age 65 without  regard to credited
service.  Effective  January  1,  2004,  the  pension  plan  was  frozen  and no
additional  benefits  accrue  under the plan after  this date.  New hires to the
Company are not eligible to participate in the frozen pension plan.

     The pension  plan is subject to the  minimum  funding  requirements  of the
Employee  Retirement Income Security Act of 1974, or ERISA. Our contributions to
the pension plan,  including those of our  participating  subsidiary banks, have
been $754,416 in 2000;  $742,923 in 2001;  $726,989 in 2002;  and  $1,038,031 in
2003. No contribution were made in 2004 or 2005.

     The following table  illustrates  estimated  retirement  benefits under the
pension  plan for  persons  in  specified  remuneration  and  years  of  service
categories,  which benefits are payable  annually for life (but in no event less
than 10 years).  The  benefits  listed in the table below are not subject to any
deduction  for social  security  or other  offset  amounts.  This table does not
reflect any benefit that a participant may have accrued at December 31, 1988.

                                      -12-



                               PENSION PLAN TABLE




                                                                             Years of Service
                                                         ----------------------------------------------------------
 Remuneration                                               15          20          25          30          35
 ------------                                            ----------  ----------  ----------  ----------  ----------
                                                                                          
 $   25,000                                              $   4,688   $   6,250   $   7,813   $   9,375   $  10,938
     50,000                                                  9,375      12,500      15,625      18,750      21,875
     75,000                                                 14,063      18,750      23,438      28,125      32,813
    100,000                                                 18,750      25,000      31,250      37,500      43,750
    125,000                                                 23,438      31,250      39,063      46,875      54,688
    150,000                                                 28,125      37,500      46,875      56,250      65,625
    175,000                                                 32,813      43,750      54,688      65,625      76,563
    200,000                                                 37,500      50,000      62,500      75,000      87,500



     As of December 31, 2002,  Mr. Murphy was credited with 32 years of service,
at which time he began receiving payments under the pension plan. As of December
31, 2003, Mr. Dueser was credited with 27 years of service,  Mr.  Hildebrand was
credited with one year of service and Mr. Patterson was credited with nine years
of service.  The covered  compensation of Mr. Dueser and Mr.  Hildebrand  during
2003 was  $200,000,  and for Mr.  Patterson was  $158,333.  The maximum  covered
compensation  was $200,000 in 2003. Mr. Webb began  employment in March 2003 and
was not  credited  with any years of  service.  As the  pension  plan was frozen
effective  January 1, 2004,  no  additional  years of service  accrued from that
date.

Flexible Spending Account Benefit Plan

     With our subsidiaries, we have a flexible spending account benefit plan. An
employee is eligible  to become a  participant  in this plan on the first day of
the month following  completion of two months of service.  The flexible spending
account  benefit plan allows each  participant  to redirect a portion of his/her
salary, before taxes, to pay certain medical and/or dependent care expenses.

Deferred Compensation Agreement

     In  1992,  your  board  of  directors  approved  a  deferred   compensation
agreement, which was amended in 1995, between Mr. Murphy and us. We entered into
this agreement in recognition of Mr. Murphy's contribution to our success and as
an  inducement  to him to  remain,  subject to the  discretion  of your board of
directors, in our employ. This agreement provided that, following his retirement
in December  2002, we would pay him, or his  beneficiary,  the sum of $8,750 per
month for a period of 84 months.  The  monthly  amount was  considered  to be an
appropriate  level of  supplemental  income to  partially  offset  Mr.  Murphy's
reduction in personal income  following  retirement and was based on an analysis
of  the  difference  in  projected  final  year   compensation   and  retirement
compensation.  Effective  January 1, 2003,  Mr. Murphy began  receiving  monthly
payments  of  $8,750 as  provided  under  the  terms of this  agreement  through
December 1, 2009.

Executive Recognition Plan

     In April 1996, our outside  directors,  who  constituted a majority of your
board of directors,  unanimously  approved an executive  recognition  plan. This
plan enables us, upon approval of the compensation  committee,  to offer our key
executive  officers  and  those of our  subsidiaries  an  executive  recognition
agreement.  Mr. Dueser,  Mr. Hildebrand,  Mr. Patterson,  Mr. Webb and our other
senior officers have entered into executive recognition agreements with us. Each
executive  recognition  agreement provides severance benefits for each executive
officer  if,  within two years  following a change in control (as defined in the
executive recognition agreements), his employment with us or our subsidiaries is
terminated by us or the subsidiary  bank for any reason other than for cause (as
defined in the executive  recognition  agreements) (except for terminations as a
result of the  officer's  death,  disability  or  retirement  (as such terms are
defined in the executive  recognition  agreements)) or by the executive  officer
for good  reason (as  defined in the  executive  recognition  agreements).  Such
severance  benefits  provide that the  executive  officer will receive a payment
equal  to a  certain  percentage  (as set  forth  in his  executive  recognition
agreement)  of  his  annual  base  salary  immediately  preceding  the  date  of
termination  and,  for  two  years  following  the  date  of  termination,   the
continuation  of all medical,  life and  disability  benefit plans  covering the
officer at no cost to the officer.  The  percentage  of annual base salary to be
received  upon  a  change  in  control  pursuant  to his  executive  recognition
agreement is 200%. The total severance payment for the executive officer cannot,

                                      -13-



however,  exceed  the  amount  that  would  cause  such  payment  to be deemed a
"parachute payment" under Section 280G of the Internal Revenue Code.

     Each executive recognition agreement has a term of two years. However, if a
change in control  occurs during the original term of the executive  recognition
agreements,  then the executive  recognition  agreements will continue in effect
for  an  additional  period  of two  years  following  the  change  in  control.
Similarly,  if a second change in control  occurs within two years from the date
of the first change in control, then the executive  recognition  agreements will
continue in effect for a period of two years from the date of the second  change
in control.

     These  executive  recognition  agreements  are  presently  being amended to
comply with newly issued Internal Revenue regulations effecting such plans.

Stock Option Plan

     At the 2002 annual meeting of shareholders, our 2002 incentive stock option
plan was  approved  and  adopted.  The  purposes of the stock option plan are to
attract  and retain key  employees  and to  encourage  employee  performance  by
providing  them with a proprietary  interest in us through the granting of stock
options.  The maximum aggregate number of shares of our common stock that may be
issued  under  the 2002  incentive  stock  option  plan is  833,333  subject  to
adjustment  for stock  dividends  and similar  events.  The stock option plan is
administered  by our  compensation  committee.  Only incentive stock options (as
defined in the  Internal  Revenue  Code) may be granted  under the stock  option
plan.  Incentive  stock  options  granted  under  the stock  option  plan may be
exercised  solely  by the  grantee,  or in the  case of the  grantee's  death or
incapacity, by the grantee's executors, administrators, guardians or other legal
representatives  and are not  assignable or  transferable  by a grantee.  In May
2003, 95,413 stock options were issued to certain of our officers under the 2002
incentive stock option plan. In January 2005,  101,066 stock options were issued
to certain officers under the 2002 incentive stock option plan.

     Our 1992 incentive stock plan expired in 2002 and no additional options may
be granted  under this  plan.  Options  totaling  67,801 are  exercisable  as of
December  31,  2005,  under the 1992  incentive  stock  option  plan and will be
exercisable through 2012 under the terms of the plan.

Consulting Agreement

     Effective January 1, 2003, we entered into a consulting  agreement with Mr.
Murphy whereby Mr. Murphy provided  various  services to us and our subsidiaries
with  respect to  strategic  planning  and  potential  acquisitions  among other
things. The term of the original agreement was one year and compensation payable
was $14,583 per month.  The agreement was renewed for one year in 2004, 2005 and
2006. The present  agreement  effective  January 1, 2006  compensates Mr. Murphy
$2,500 per month.

Meetings of the Board of Directors

     Your board of directors has four  regularly  scheduled  meetings each year.
Each of the  directors  attended  at least 75% of the  meetings  of the board of
directors  and the  committees  of the board of directors on which such director
served.

     Although we do not have a formal policy regarding  attendance by members of
the board of  directors  at our annual  meeting of  shareholders,  we  encourage
directors  to attend and  historically  more than a  majority  have done so. For
example, 100% of the directors attended the 2005 annual meeting of shareholders.

Committees of the Board of Directors

     Your board of directors  has four  committees.  The  functions  and current
members of each committee are as follows:

     Executive  Committee.  The  executive  committee  acts  for  your  board of
directors between board meetings,  except to the extent limited by our bylaws or
Texas law. The current members are Messrs. Coalson,  Copeland, Dueser, McDaniel,
Murphy,  Parker,  Ramsey and Stephens.  The Executive  Committee met three times
during 2005 and in January 2006.

                                      -14-



     Nominating Committee.  Among other things, the nominating committee selects
and  recommends  director  candidates to the board of directors.  The nominating
committee members are Messrs. Coalson, Copeland,  McDaniel, Ramsey and Stephens.
All current  directors  eligible for reelection to the board are being nominated
for election as directors for 2006 in addition to one new nominee,  Mr. Edwards.
During 2005, the committee met two times and also in January 2006.

     Historically,  our goal  has been to  assemble  a board of  directors  that
brings to us a variety of  perspectives  and skills  derived  from high  quality
business and professional  experience to provide sound and prudent guidance with
respect to our  operations and interests.  Generally,  the committee  identifies
candidates  through the personal,  business and  organizational  contacts of the
directors  and  management.  Potential  directors  should  possess  the  highest
personal and  professional  ethics,  integrity  and values,  and be committed to
representing  the  interests of all of our  shareholders.  It is also our policy
that at all  times at least a  majority  of your  board of  directors  meets the
independence  standards promulgated by Nasdaq and the SEC. We also require board
members to be able to dedicate  sufficient time and resources to ensure diligent
performance of their duties,  including attending board and applicable committee
meetings. The committee has also generally considered factors such as:

     o    representation of a major business, profession, industry or segment of
          the economy;

     o    our needs with respect to the particular talents and experience of our
          directors;

     o    the knowledge,  skills and experience of nominees,  particularly  with
          respect to the  community  banking  business in North Central and West
          Texas;

     o    a nominee's  experience with accounting rules and practices,  finance,
          management and leadership opportunities;

     o    leader in the  community  and  possession  of an  appreciation  of the
          relationship of our banking business to the communities we serve; and

     o    other  requirements  that  may  be  imposed  by  the  bank  regulatory
          agencies.

     Under our bylaws, an individual may not stand for election or reelection as
a director upon attaining age 72 years of age, unless he owns at least 1% of the
outstanding  shares  of our  common  stock  and is less  than 75  years  of age.
Otherwise,  there are no stated minimum criteria for director nominees. Based on
the age  limitations,  Messrs.  Parker and  McDaniel  and Dr.  Ramsey are not be
eligible to stand for reelection in 2006.

     We expect that the nominating  committee will select nominees in the future
by first  evaluating the current  members of your board of directors  willing to
continue in  service.  Current  members of the board with skills and  experience
that are  relevant  to our  business  and who are willing to continue in service
will be  considered  for  re-nomination,  balancing  the value of  continuity of
service  by  existing  members  of  the  board  with  that  of  obtaining  a new
perspective.  If any member of the board does not wish to continue in service or
if the nominating committee or the board decides not to re-nominate a member for
re-election,  we  anticipate  that the  nominating  committee  will identify the
desired  skills and  experience of a new nominee in light of the criteria  above
and begin a search for appropriately qualified individuals. To date, we have not
engaged third parties to identify or evaluate or assist in identifying potential
nominees,  although  we reserve  the right in the future to retain a third party
search firm, if necessary.

     The  nominating  committee  will  consider  qualified  director  candidates
recommended  by  shareholders.  To date,  no  shareholder  has ever  made such a
recommendation.  For the  2007  Annual  Shareholders  Meeting,  any  shareholder
wishing to propose a nominee  should submit a  recommendation  in writing to the
Nominating  Committee of First  Financial  Bankshares,  Inc. at 400 Pine Street,
Suite  300,  Abilene,  Texas  79601 at least 90 days in  advance  of the  annual
meeting,  including  the nominee's  resume,  qualifications  and other  relevant
biographical  information and providing confirmation of (1) the name and address
of the  shareholder,  (2) the  nominee's  consent to serve as a director,  (3) a
description of all  arrangements or  understandings  between the shareholder and
the nominee and (4) any other  information  regarding the nominee or shareholder
that would be  required  to be  included  in a proxy  statement  relating to the
election of directors. Qualified candidates recommended by our shareholders will
be  evaluated  on the same  basis as  candidates  recommended  by our  officers,
directors and other sources.

                                      -15-



     Audit Committee.  The audit committee  reviews the scope and results of the
annual audit by our independent auditors,  and receives and reviews internal and
external  audit  reports.   The  committee  also  monitors  the  qualifications,
independence and performance of our independent  auditor and internal  auditors.
Its members include Messrs. Copeland,  Johnson,  McDaniel, Miers and Trotter. We
believe that each member of the audit committee is independent  under The Nasdaq
National  Market listing  standards.  During 2005, the audit  committee met four
times and in  February  2006.  The board of  directors  has  determined  that it
believes all audit committee members are financially  literate under the current
listing  standards  of Nasdaq.  The board also  determined  that it believes Mr.
Copeland  qualifies as an "audit committee  financial  expert" as defined by the
SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002.

     Compensation  Committee.  The  compensation  committee is  responsible  for
compensation  matters  for  the  Company  as well as  administering  our  profit
sharing,  pension and flexible spending plans and overseeing our incentive stock
option plan for key  employees.  The current  members are Mrs. Stai, Dr. Ramsey,
Messrs.  Canon,  Coalson,  Matthews and  Stephens.  The  committee met two times
during 2005 and in January 2006.

Director Compensation

     Directors  who  are  our  executive   officers  or  employees   receive  no
compensation  as such for service as members of either the board of directors or
committees  thereof.  Directors who are not our officers receive $2,000 for each
board meeting  attended.  The directors who serve on committees  and who are not
our officers receive $1,000 for each committee meeting attended.

Compensation Committee Interlocks and Insider Participation

     No person who served as a member of the compensation  committee was, during
2005,  an  officer  or  employee  of us or any of our  subsidiaries,  or had any
relationship  requiring disclosure in this proxy statement.  However,  committee
member Mr. Coalson  maintained  loans from  subsidiaries  during 2005. The loans
were made in the ordinary course of business,  on substantially  the same terms,
including  interest rates and  collateral,  as those  prevailing at the time for
comparable  transactions  on an arms-length  basis and did not involve more than
the normal risk of collectibility  or present other unfavorable  features to the
subsidiary  bank.  None of our  executive  officers  served  as a member  of the
compensation committee (or other board committee performing equivalent functions
or, in the absence of any such  committee,  the entire  board of  directors)  or
director of another entity,  one of whose executive  officers served as a member
of our board of directors.

Corporate Governance

     We have long believed that good corporate governance is important to ensure
that the  Company  is managed  for the  long-term  benefit of our  shareholders.
During the past year, we have been reviewing our corporate  governance  policies
and practices and comparing  them to those  suggested by various  authorities in
corporate  governance  and the  practices  of other  public  companies.  We also
monitor new and proposed rules of the Securities  and Exchange  Commission,  the
Nasdaq  National  Market and the bank  regulatory  guidelines.  We may amend our
governance policies and procedures when required by law, Nasdaq rules or when we
otherwise deem it prudent to do so. Our corporate governance policies, including
our code of conduct applicable to all our employees,  officers and directors, as
well as the charters of our audit and  nominating  committees,  are available at
www.ffin.com under the "Corporate Governance" caption.

                                      -16-



                      REPORT OF THE COMPENSATION COMMITTEE
                            ON EXECUTIVE COMPENSATION

     The compensation  committee reviews the compensation  program for the Chief
Executive  Officer and other members of senior  management,  including the named
executive officers listed on the Summary Compensation Table appearing on page 6,
and  determines and  administers  their  compensation.  In the case of the Chief
Executive  Officer,  the  compensation  determination  made by the  compensation
committee  is also  subject to approval by the entire  board of  directors.  The
compensation committee also oversees the administration of employee benefits and
benefit plans for the Company and its  subsidiaries.  The committee has retained
an  independent  consultant,  from time to time,  to  assist  the  Committee  in
fulfilling its responsibilities.

     The  compensation  committee's  philosophy  is to  provide  a  compensation
package that attracts and retains  executive  talent and delivers higher rewards
for superior performance and consequences for  underperformance.  It is also the
compensation  committee's  practice  to  provide  a  balanced  mix of  cash  and
equity-based  compensation that the committee believes  appropriate to align the
short- and  long-term  interests of the  Company's  executives  with that of its
shareholders and to encourage executives to act as equity owners of the Company.

     The  compensation  committee seeks to attract  executive talent by offering
competitive base salaries,  annual performance incentive opportunities,  and the
potential  long-term rewards under the Company's  long-term  incentive  programs
(including  our profit  sharing,  flexible  spending and incentive  stock option
plans). It is the committee's  practice to provide  incentives that promote both
the short- and long-term  financial  objectives of the Company.  Achievement  of
short-term objectives is rewarded through base salary and annual bonuses,  while
long-term  incentive  programs  encourage  executives  to focus on the Company's
long-term goals as well. These  incentives are based on financial  objectives of
importance  to the Company,  including  revenue and earnings  growth,  return on
assets,  and creation of shareholder value. The Company's  compensation  program
also  accounts  for  individual  performance,  which  enables  the  compensation
committee to  differentiate  among  executives  and  emphasize  the link between
personal performance and compensation.

     The  compensation   committee  compares  the  Company's  senior  management
compensation levels with those of a group of peer companies and competitors. The
committee  periodically  reviews the  effectiveness and  competitiveness  of the
Company's executive compensation structure with the assistance of an independent
consultant.  This  consultant  is  engaged  by,  and  reports  directly  to, the
committee.

     The key elements of executive  compensation are base salary, profit sharing
contributions,  and incentive stock options. In setting Mr. Dueser's base salary
and eligibility for stock options, the compensation committee considered,  among
other things:

     o    the  scope  of the  Chief  Executive  Officer's  responsibilities  and
          experience;

     o    base salary compared to several compensation surveys;

     o    the overall performance of the Company and a subjective  evaluation of
          Mr. Dueser's contribution to its overall success; and

     o    tenure with the Company.

     Mr. Dueser's compensation program also includes a bonus plan that calls for
Mr. Dueser to receive a cash bonus based on a sliding scale. The scale considers
net income growth times the  Company's  return on average  assets.  No bonus was
earned in 2005. The maximum to be earned approximated $60,000.

     The annual base  salaries,  bonuses and stock  option  grants for the other
named executive  officers and subsidiary bank presidents and senior officers are
adjusted  annually by the committee.  The compensation  committee  considers the
following  factors when approving annual base salaries,  bonuses and eligibility
for stock options:

                                      -17-



     o    attainment of planned goals and objectives;

     o    scope of  responsibility  (asset size of subsidiary bank and/or degree
          of influence on our profitability and operations);

     o    tenure with the Company;

     o    evaluation input from subsidiary directors and executive management of
          Company; and

     o    relationship  of base salary to the base  salaries of other members of
          the executive officer group.

     During the course of the year,  the  compensation  committee has at various
times reviewed the different  components of the Chief Executive  Officer and the
named executive officers'  compensation,  including salary,  bonus,  accumulated
realized and  unrealized  stock option gains,  the dollar value to the executive
and cost to the Company of all perquisites and other personal  benefits,  payout
obligations  under the Company's new  non-qualified  "make whole"  program,  the
actual projected payout  obligations  under the Company's pension plan and under
potential  change-in-control  scenarios. Based on this review, the committee has
found  the  Chief  Executive  Officer's  and  named  executive  officers'  total
compensation in the aggregate to be reasonable and not excessive.

     The  committee  believes  that the  relative  difference  between the Chief
Executive  Officer's  compensation  and the  compensation of the Company's other
executives has not increased  significantly  over the years.  The comparisons in
the  Company's  internal  pay equity  study go back to the early  1980's and the
percentage differences are not significantly different today from then. Over the
period reviewed,  the Chief Executive Officer's total compensation has generally
been in the range of 1.5 to 2 times the  compensation  of the next  highest paid
executive officer.

     Section  162(m) of the Internal  Revenue Code  generally  limits the annual
corporate tax deduction for compensation paid to the chief executive officer and
the  four  other  most  highly   compensated   executive   officers  unless  the
compensation  is  performance-based.  One condition to qualify  compensation  as
performance-based  is to  establish  the  amount  of the  award on an  objective
formula that precludes any discretion.  The compensation  committee continues to
review  the  impact  of  this  tax  provision  on our  incentive  plans  and has
determined  that  Section  162(m) is  currently  inapplicable  because  no named
executive officer receives compensation in excess of $1 million.

                                                       COMPENSATION COMMITTEE


                                                       F. L. Stephens, Chairman
                                                       Joseph E. Canon
                                                       Mac A. Coalson
                                                       Kade L. Matthews
                                                       Jack D. Ramsey, M.D.
                                                       Dian Graves Stai

                                      -18-



                          REPORT OF THE AUDIT COMMITTEE

     The audit committee  oversees our financial  reporting process on behalf of
your board of  directors.  Management  has the  primary  responsibility  for the
financial  statements and the reporting process including the system of internal
controls. In fulfilling its oversight responsibilities,  the committee, which is
composed of  independent  directors in  compliance  with Rule 4200 of the Nasdaq
listing  standards,  reviewed and discussed the audited financial  statements in
the Annual Report with management.  The committee also discussed with management
the quality,  not just the  acceptability,  of the  accounting  principles,  the
reasonableness of significant  judgments,  and the clarity of disclosures in the
financial statements.

     The committee reviewed with Ernst & Young LLP, our independent auditors for
2005, who were  responsible for expressing an opinion on the conformity of those
audited  financial  statements with generally  accepted  accounting  principles,
their judgments as to the quality, not just the acceptability, of our accounting
principles  and such other  matters as are  required  to be  discussed  with the
committee under generally  accepted auditing  standards and, as applicable,  the
standards of the Public Company  Accounting  Oversight Board. The Committee also
discussed with the independent  auditors their audit of management's  assessment
that the Company maintained  effective internal control over financial reporting
as  of  December  31,   2005,   based  on  criteria   established   in  Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway  Commission.  In addition,  the committee has discussed with the
independent auditors the auditors' independence from management and the company,
including the matters  required by the  Statement on Auditing  Standards No. 61,
Communication with Audit Committees,  as amended, and the matters in the written
disclosures  required by the  Independence  Standards  Board, and considered the
compatibility of non-audit services with the auditors'  independence.  The audit
committee  has  received  the  written  disclosures  and  the  letter  from  our
independent  auditors  required by  Independence  Standards Board Standard No. 1
concerning the independence of the independent auditors.

     The committee discussed with our independent auditors the overall scope and
plans for their audit. The committee meets with the independent  auditors,  with
and without management  present,  to discuss the results of their  examinations,
their  evaluations  of our  internal  controls,  and the overall  quality of our
financial  reporting.  The committee  held four  meetings  during the year ended
December 31, 2005.

     The committee has relied, without independent verification, on management's
representation  that the financial  statements have been prepared with integrity
and objectivity and in conformity with generally accepted accounting principles.
The  committee's  oversight  does not  provide it with an  independent  basis to
determine that  management  has in fact  maintained  appropriate  accounting and
financial  reporting  principles  or  policies.   Furthermore,  the  committee's
considerations  and discussions with management and the independent  auditors do
not ensure that our company's  financial  statements are presented in accordance
with generally accepted accounting  principles,  that the audit of our company's
financial  statements has been carried out in accordance with generally accepted
auditing standards or the standards of the Public Company  Accounting  Oversight
Board or that our company's independent accountants are in fact independent.

     In reliance on the reviews  and  discussions  referred to above,  the audit
committee  recommended to the executive committee of the board of directors that
the audited  financial  statements be included in the annual report on Form 10-K
for the year ended  December  31,  2005,  for  filing  with the  Securities  and
Exchange Commission.  Acting on behalf of the board of directors,  the executive
committee approved the audit committee's recommendation. Your board of directors
has  adopted a charter for the audit  committee,  a copy of which is filed as an
appendix  to this  definitive  proxy  statement  filed with the  Securities  and
Exchange  Commission.  The members of the committee are  considered  independent
because  we  believe  they  satisfy  the  independence  requirements  for  audit
committee members prescribed by Nasdaq and the SEC.

                                                       AUDIT COMMITTEE

                                                       David Copeland, Chairman
                                                       Raymond A. McDaniel, Jr.
                                                       Bynum Miers
                                                       Derrell E. Johnson
                                                       Johnny E. Trotter

                                      -19-



PERFORMANCE GRAPH

     The following  performance  graph  compares  cumulative  total  shareholder
return for our common  stock,  the Russell 3000 Index,  and the SNL Banks Index,
which is a banking index  prepared by SNL Financial LC and is comprised of banks
with $1 billion to $5 billion in total assets,  for a five-year period (December
31, 2000 to December 31, 2005).  The performance  graph assumes $100 invested in
our common stock at its closing  price on December 31, 2000,  and in each of the
Russell  3000  Index and the SNL Bank Index on the same  date.  The  performance
graph  also  assumes  the  reinvestment  of  all  dividends.  The  dates  on the
performance  graph  represent the last trading day of each year  indicated.  The
amounts noted on the performance  graph have been adjusted to give effect to all
stock splits and stock dividends.

[GRAPHIC OMITTED]




                                                                      Year Ended
                                         ----------------------------------------------------------------------
Index                                      12/31/00   12/31/01    12/31/02   12/31/03    12/31/04   12/31/05
---------------------------------------------------------------------------------------------------------------
                                                                                   
First Financial Bankshares, Inc.            100.00     124.62      163.17     228.33      257.08     276.77
Russell 3000                                100.00      88.54       69.47      91.04      101.92     108.16
SNL $1B-$5B Bank Index                      100.00     121.50      140.26     190.73      235.40     231.38

*Source:SNL Financial LC, Charlottesville, VA, 434-977-1600, www.snl.com (C)2006



                                      -20-



         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of  February  1, 2006,  we were not aware of any person  (including  any
"group" as that term is used in Section 13(d)(3) of the Securities  Exchange Act
of 1934)  who is the  beneficial  owner  of more  than 5% of our  common  stock.
However,  as of  February  1, 2006,  First  Financial  Trust & Asset  Management
Company,  National Association held of record in various fiduciary capacities an
aggregate of  3,536,780  shares of our common  stock.  Of the total shares held,
First Financial Trust & Asset Management Company,  National Association had sole
power in its fiduciary  capacity to vote 1,990,787  shares (9.61%),  shared with
others the power to vote  58,929  shares  (0.28%) and had no  authority  to vote
1,487,064 shares (7.18%).  All the shares held by this subsidiary entity,  which
are registered in its name as fiduciary or in the name of its nominee, are owned
by many different  accounts,  each of which is governed by a separate instrument
that sets forth the powers of the fiduciary with regard to the  securities  held
in such accounts.  The board of directors historically has not attempted to, and
does not  intend to attempt to in the  future,  exercise  any power to vote such
shares.  See "Proposal  1--Election  of  Directors--Nominees"  and  "--Executive
Officers" for information with respect to the beneficial ownership of our common
stock by each director  nominee and named  executive  officers as of February 1,
2006. In the aggregate,  all director nominees and executive officers as a group
(17  individuals)  beneficially  owned 1,334,720  shares of our common stock, or
6.44%, as of February 1, 2006.

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires our directors and officers,  and
persons who own more than 10% of our common stock,  to file with the  Securities
and  Exchange  Commission  initial  reports of our common  stock  ownership  and
reports of changes in such  ownership.  A  reporting  person must file a Form 3,
Initial  Statement of Beneficial  Ownership of Securities,  within 10 days after
such person becomes a reporting  person.  A reporting person must file a Form 4,
Statement of Changes of Beneficial Ownership of Securities,  within two business
days after such person's beneficial ownership of securities changes,  except for
certain  changes exempt from the reporting  requirements  of Form 4. A reporting
person  must  file a  Form  5,  Annual  Statement  of  Beneficial  Ownership  of
Securities,  within 45 days after the end of the issuer's  fiscal year to report
any changes in ownership  during such year not  reported on a Form 4,  including
changes exempt from the reporting requirements of Form 4.

     The  Securities  and  Exchange  Commission's  rules  require our  reporting
persons to furnish us with copies of all Section  16(a)  reports that they file.
Based  solely upon a review of the copies of such  reports  furnished  to us, we
believe that the reporting  persons have complied  with all  applicable  Section
16(a) filing  requirements  for 2005 and through the date of this statement on a
timely basis with the following exceptions: Mr. Parker and Dr. Ramsey each filed
a Form 4 in 2005  and Mr.  Coalson  filed a Form 5 in 2006 to  amend  previously
filed reports.  Mr. Parker (1 report - 1 transaction),  Dr. Ramsey (1 report - 1
transaction), Mr. Trotter (1 report - 8 transactions),  Mr. Copeland (1 report -
2  transactions)  and Mr. Canon (1 report - 1 transaction)  filed Forms 4 during
2005 and through the date of this statement past the required  two-business  day
deadline.

     The  Company  conducted  a review of its  Section 16  reporting  process to
determine  whether  transactions in the Company's stock were timely reported and
to evaluate proper  reporting of all beneficial  holdings.  All three amendments
filed were due to clerical  error and were filed to correct the error  either on
the same day or the following day. As disclosed  above, the review also revealed
transactions  that were not timely  reported  and,  as these  transactions  were
identified,  the Company  undertook to file corrected forms throughout the year.
The Company continues to emphasize to its section 16 reporters the importance of
timely and accurate filings and seeks means to improve  compliance on an ongoing
basis.

                              INDEPENDENT AUDITORS

     We  retained  Ernst & Young LLP to serve as our  independent  auditors  for
2005.

     The  aggregate  fees  billed  for  each of the last two  fiscal  years  for
professional services rendered by Ernst & Young, LLP, the principal auditors who
performed the audit of our annual financial statements,  review of the quarterly
financial statements and audit of internal controls, follows:

                                      -21-



                                                  Year ended December 31,
                                                  -----------------------
                                             2005                        2004
                                             ----                        ----
         Audit Fees                        $297,645                    $310,458
         Audit Related Fees                   None                        None
         Tax Fees                             None                        None
         All Other Fees                       None                        None


     Our audit committee has adopted a policy that requires  advance approval of
all audit,  audit-related,  tax services,  and other  services  performed by the
independent auditor. The policy provides for pre-approval by the audit committee
of specifically defined audit and non-audit services.  Except as permitted under
Rule 2-01 of SEC Regulation S-X, unless the specific service has been previously
pre-approved  with respect to that year,  the audit  committee  must approve the
permitted  service before the independent  auditor is engaged to perform it. The
audit  committee  has  delegated to its Chairman to approve  permitted  services
provided  that the Chairman  reports any  decisions to the committee at its next
scheduled meeting.

                        INTEREST IN CERTAIN TRANSACTIONS

     As has been true in the past,  some of our officers and directors,  members
of their families,  and other businesses with which they are affiliated,  are or
have been customers of one or more of our subsidiary  banks. As customers,  they
have entered into  transactions  in the  ordinary  course of business  with such
banks, including borrowings,  all of which were on substantially the same terms,
including  interest rates and  collateral,  as those  prevailing at the time for
comparable  transactions on an arms-length basis and did not involve more than a
normal risk of collectibility  or present any other unfavorable  features to the
subsidiary  banks involved.  None of the  transactions  involving our subsidiary
banks and our officers and directors, or other businesses with which they may be
affiliated,   have  been  classified  or  disclosed  as  nonaccrual,  past  due,
restructured or potential problems.

     In February 2005, we acquired Clyde  Financial  Corporation  for a purchase
price of $25.4 million. Mr. Edwards, a nominee for director,  and his wife owned
27.5% of Clyde  Financial  Corporation and received  approximately  $7.1 million
from us to acquire  their  shares.  See our 2005 Annual  Report on Form 10-K for
additional disclosures related to this acquisition.

                           INCORPORATION BY REFERENCE

     With  respect  to any  future  filings  with the  Securities  and  Exchange
Commission into which this proxy  statement is  incorporated  by reference,  the
material   under  the  headings   "Executive   Committee   Report  on  Executive
Compensation," "Report of the Audit Committee" and "Performance Graph" shall not
be incorporated into such future filings.

                                      -22-



                           FORWARD-LOOKING STATEMENTS

     This proxy statement contains certain forward-looking statements within the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  21E of the
Securities  Exchange Act of 1934. When used in this proxy statement,  words such
as  "anticipate,"   "believe,"   "estimate,"   "expect,"  "intend,"   "predict,"
"project,"  and similar  expressions,  as they  relate to us or our  management,
identify forward-looking statements.  These forward-looking statements are based
on  information  currently  available to our  management.  Actual  results could
differ materially from those contemplated by the forward-looking statements as a
result of certain factors,  including but not limited to those listed in Item 1A
- "Risk  Factors" in our Annual Report on Form 10-K for the year ended  December
31, 2005 and the following:

     o    general economic conditions;

     o    legislative and regulatory actions and reforms;

     o    competition from other financial  institutions  and financial  holding
          companies;

     o    the effects of and changes in trade,  monetary and fiscal policies and
          laws, including interest rate policies of the Federal Reserve Board;

     o    changes in the demand for loans;

     o    fluctuations in value of collateral and loan reserves;

     o    inflation, interest rate, market and monetary fluctuations;

     o    changes in consumer spending, borrowing and savings habits;

     o    our ability to attract deposits;

     o    consequences of continued bank mergers and  acquisitions in our market
          area, resulting in fewer but much larger and stronger competitors; and

     o    acquisitions and integration of acquired businesses.

     Such statements reflect the current views of our management with respect to
future  events  and are  subject  to these and other  risks,  uncertainties  and
assumptions relating to our operations,  results of operations,  growth strategy
and  liquidity.  All  subsequent  written  and oral  forward-looking  statements
attributable  to us or persons  acting on our behalf are expressly  qualified in
their entirety by this paragraph.  We undertake no obligation to publicly update
or otherwise revise any forward-looking  statements,  whether as a result of new
information, future events or otherwise.

              SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING

     To be considered  for inclusion in our proxy  statement for the 2007 annual
meeting,  shareholder  proposals  must be  received at our  principal  executive
offices no later than December 1, 2006. Under Rule 14a-4(c)(1) of the Securities
Exchange Act of 1934, if any  shareholder  proposal  intended to be presented at
the 2007  annual  meeting  without  inclusion  in our proxy  statement  for this
meeting is received at our principal  executive offices after February 14, 2007,
then a proxy will have the ability to confer discretionary  authority to vote on
this proposal.

                                            By Order of the Board of Directors,



                                            KENNETH T. MURPHY, Chairman

March 24, 2006

                                      -23-



                                                                     APPENDIX A

                  AMENDED AND RESTATED CERTIFICATE OF FORMATION

                                       OF

                        FIRST FINANCIAL BANKSHARES, INC.
                        --------------------------------



                                      FIRST
                                      -----


     First  Financial  Bankshares,  Inc.  (the  "Corporation"),  pursuant to the
provisions  of Article 4.07 of the Texas  Business  Corporation  Act and Section
3.059 of the Texas Business  Organizations  Code, hereby adopts this Amended and
Restated  Certificate  of  Formation,  which  accurately  copies the Articles of
Incorporation  and all amendments  thereto that are in effect to date. The prior
Articles of Incorporation,  as restated and amended by this Amended and Restated
Certificate  of  Formation,  are set forth below and contain no other changes in
any  provisions.   For  purposes  of  this  document,   the  prior  Articles  of
Incorporation,  including  all  amendments  thereto,  will be referred to as the
Certificate of Formation.

                                     SECOND
                                     ------


     The shareholders of the Corporation adopted the following amendments to the
Certificate of Formation on the _____ day of _____________, 2006:


     1.  ARTICLE  TWO of the  Certificate  of  Formation  is  amended to read as
          follows:

               "The corporation is formed as a domestic for-profit corporation."

     2.  ARTICLE  THREE of the  Certificate  of  Formation is amended to read as
          follows:

               "The  purposes  for which the  corporation  is organized  are the
          transaction of any or all lawful business for which  corporations  may
          be incorporated under the Texas Business Organizations Code."

     3.  ARTICLE  FOUR of the  Certificate  of  Formation  is amended to read as
          follows:

               "The aggregate number of shares which the corporation  shall have
          authority to issue is FORTY MILLION  (40,000,000)  of the par value of
          ONE CENT ($0.01) each."

     4. ARTICLE FIVE of the Certificate of Formation is deleted in its entirety.

     5. ARTICLE SIX of the  Certificate  of Formation is  renumbered  as ARTICLE
          FIVE, and is amended to read as follows:

               "The  address  of  its  registered  office  is 400  Pine  Street,
          Abilene,  Texas,  USA 79601,  and the name of its registered  agent at
          such address is F. Scott Dueser."

     6. ARTICLE SEVEN of the  Certificate  of Formation is renumbered as ARTICLE
          SIX, and is amended to read as follows:



               "The  number  of  Directors  constituting  the  current  Board of
          Directors  is  ________  (___),  and the  names and  addresses  of the
          persons who are currently  serving as Directors  until the next annual
          meeting of the  shareholders or until their successors are elected and
          qualified are:


                  Name                      Address
                  ----                      -------

                  ---------------           ----------------------------------

                  ---------------           ----------------------------------"

     7.  ARTICLE  EIGHT  of the  Certificate  of  Formation  is  deleted  in its
          entirety.

     8. ARTICLE NINE of the  Certificate  of Formation is  renumbered as ARTICLE
          SEVEN, and is amended to read as follows:

               "The right of every  shareholder to  cumulatively  vote shares is
          denied."

     9. ARTICLE TEN of the  Certificate  of Formation is  renumbered  as ARTICLE
          EIGHT, and is amended to read as follows:

               "The preemptive  rights of every  shareholder to acquire unissued
          or treasury shares of the corporation are denied."

     10. ARTICLE ELEVEN of the Certificate of Formation is renumbered as ARTICLE
          NINE, and is amended to read as follows:

               "To the  fullest  extent not  prohibited  by  applicable  laws as
          presently  or  hereafter  in effect,  no person shall be liable to the
          corporation  or its  shareholders  for  monetary  damages  for or with
          respect to any acts or  omissions in his or her capacity as a Director
          of the corporation,  except liability for (i) a breach of a Director's
          duty of loyalty to the corporation or its shareholders, (ii) an act or
          omission not in good faith or that involves intentional  misconduct or
          a knowing  violation  of the law,  (iii) a  transaction  from  which a
          Director  received  an  improper  benefit,  whether or not the benefit
          resulted  from an action  taken  within  the  scope of the  Director's
          office,  (iv) an act or omission for which the liability of a Director
          is expressly provided by statute, or (v) an act related to an unlawful
          stock repurchase or payment of a dividend.

               Each   person,   his   or   her   heirs,   executors,    personal
          representatives  and estate,  shall be indemnified by the  corporation
          for all  expenses  incurred  in  connection  with  any  action,  suit,
          proceeding  or  claim  to  which  he or she  shall be named a party or
          otherwise  be a  participant  by  virtue  of being or  having  been or
          agreeing to become (i) a Director,  officer,  employee or agent of the
          corporation and/or (ii) a Director,  officer, employee or agent of any
          corporation or  organization at the request of the  corporation.  Such
          indemnity  shall be provided to the fullest  extent not  prohibited by
          applicable  laws  presently in effect or as may  hereafter be amended.
          Indemnity  shall  include,  but not be limited to the  advancement  of
          expenses and payment of all loss,  liability and  expenses.  Provided,
          however,  that no person  shall be  indemnified  for  amounts  paid in
          settlement  unless the terms and  conditions of said  settlement  have
          been consented to by the corporation.  Further,  no indemnification of
          employees  or agents of the  corporation  (other  than  Directors  and
          officers)  will  be  made  without   express   authorization   of  the
          corporation's Board of Directors.

               The corporation may, upon the affirmative vote of the majority of
          its Board of Directors, purchase insurance for the purpose of securing
          the indemnification of its Directors,  officers and other employees to
          the extent that such indemnification is allowed in this Article.  Such
          insurance  may,  but need not,  be for the  benefit of all  Directors,
          officers or employees, and the purchase of any such insurance shall in
          no  way  limit  the   indemnification   provisions  of  the  preceding
          paragraph.  Provided,  however,  that such insurance shall not include
          coverage for a formal order assessing civil money penalties  against a
          Director   or  employee   of  the   corporation   arising  out  of  an
          administrative  proceeding or action by an appropriate bank regulatory
          agency.



               No repeal of or  amendment  to this  Article  Nine shall have any
          effect  with  respect to the  liability  or alleged  liability  of any
          Director occurring prior to such amendment or to the acts or omissions
          or rights to indemnity of any person occurring prior to such repeal or
          amendment."

               The term  "Director" in this Article Nine shall include  Advisory
          Directors and  Directors  Emeritus and Inside  Directors  serving in a
          post  retirement  capacity,  as such  terms  are or may  hereafter  be
          defined in the Bylaws of the Company.

                                      THIRD
                                      -----

     Each statement  made by this Amended and Restated  Certificate of Formation
has been effected in conformity with the Texas Business  Corporation Act and the
Texas  Business  Organizations  Code.  This Amended and Restated  Certificate of
Formation and all  amendments  made by this Amended and Restated  Certificate of
Formation   were   adopted   by  the   shareholders   of  the   Corporation   on
________________,  2006 and in accordance  with the Texas  Business  Corporation
Act, the Texas Business  Organizations Code and the constituent documents of the
Corporation.


                                     FOURTH
                                     ------


     The Certificate of Formation and all amendments and supplements thereto are
superseded by the following Amended and Restated Certificate of Formation, which
accurately  copies the entire text of the  Certificate  of  Formation as well as
incorporates the amendments set forth above:


                                   ARTICLE ONE

     The name of the corporation is FIRST FINANCIAL BANKSHARES, INC.

                                   ARTICLE TWO

     The corporation is formed as a domestic for-profit corporation.

                                  ARTICLE THREE

     The purposes for which the  corporation is organized are the transaction of
any or all lawful business for which  corporations may be incorporated under the
Texas Business Organizations Code.

                                  ARTICLE FOUR

     The aggregate  number of shares which the corporation  shall have authority
to issue is FORTY  MILLION  (40,000,000)  of the par  value of ONE CENT  ($0.01)
each.

                                  ARTICLE FIVE

     The address of its registered  office is 400 Pine Street,  Abilene,  Texas,
USA  79601,  and the name of its  registered  agent at such  address is F. Scott
Dueser.



                                   ARTICLE SIX

     The number of  Directors  constituting  the current  Board of  Directors is
________  (___),  and the names and  addresses of the persons who are  currently
serving as Directors until the next annual meeting of the  shareholders or until
their successors are elected and qualified are:


         Name                               Address
         ----                               -------

         ---------------                    ----------------------------------

         ---------------                    ----------------------------------

                                  ARTICLE SEVEN

     The right of every shareholder to cumulatively vote shares is denied.

                                  ARTICLE EIGHT

     The preemptive  rights of every shareholder to acquire unissued or treasury
shares of the corporation is denied.

                                  ARTICLE NINE

     To the fullest  extent not  prohibited by  applicable  laws as presently or
hereafter  in  effect,  no  person  shall be liable  to the  corporation  or its
shareholders  for monetary  damages for or with respect to any acts or omissions
in his or her capacity as a Director of the  corporation,  except  liability for
(i) a  breach  of a  Director's  duty  of  loyalty  to  the  corporation  or its
shareholders,  (ii) an act or  omission  not in  good  faith  or  that  involves
intentional  misconduct or a knowing  violation of the law,  (iii) a transaction
from which a Director received an improper  benefit,  whether or not the benefit
resulted from an action taken within the scope of the Director's office, (iv) an
act or omission for which the  liability of a Director is expressly  provided by
statute,  or (v) an act related to an unlawful stock  repurchase or payment of a
dividend.

     Each person,  his or her heirs,  executors,  personal  representatives  and
estate,  shall be indemnified by the  corporation  for all expenses  incurred in
connection with any action,  suit,  proceeding or claim to which he or she shall
be named a party or otherwise be a participant by virtue of being or having been
or  agreeing  to  become  (i) a  Director,  officer,  employee  or  agent of the
corporation  and/or  (ii)  a  Director,   officer,  employee  or  agent  of  any
corporation or  organization at the request of the  corporation.  Such indemnity
shall be  provided to the  fullest  extent not  prohibited  by  applicable  laws
presently in effect or as may hereafter be amended. Indemnity shall include, but
not be limited to the advancement of expenses and payment of all loss, liability
and expenses. Provided, however, that no person shall be indemnified for amounts
paid in settlement  unless the terms and conditions of said settlement have been
consented to by the corporation.  Further,  no  indemnification  of employees or
agents of the  corporation  (other than  Directors  and  officers)  will be made
without express authorization of the corporation's Board of Directors.

     The corporation may, upon the affirmative vote of the majority of its Board
of Directors, purchase insurance for the purpose of securing the indemnification
of its  Directors,  officers  and  other  employees  to  the  extent  that  such
indemnification is allowed in this Article. Such insurance may, but need not, be
for the benefit of all Directors, officers or employees, and the purchase of any
such  insurance  shall in no way limit  the  indemnification  provisions  of the
preceding paragraph.  Provided,  however,  that such insurance shall not include
coverage for a formal order assessing  civil money penalties  against a Director
or employee of the corporation  arising out of an  administrative  proceeding or
action by an appropriate bank regulatory agency.



     No repeal of or  amendment  to this Article Nine shall have any effect with
respect to the liability or alleged liability of any Director occurring prior to
such  amendment or to the acts or omissions or rights to indemnity of any person
occurring prior to such repeal or amendment.

     The term "Director" in this Article Nine shall include  Advisory  Directors
and  Directors  Emeritus  and  Inside  Directors  serving  in a post  retirement
capacity,  as such  terms are or may  hereafter  be defined in the Bylaws of the
Company.


                                               FIRST FINANCIAL BANKSHARES, INC.


                                               By:____________________________
                                                    F. Scott Dueser, President



Dated:                     , 2006
       --------------------



                                                                     APPENDIX B

                              ARTICLES OF AMENDMENT
                                     TO THE
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                        FIRST FINANCIAL BANKSHARES, INC.

     Pursuant to Article 4.04 of the Texas Business Corporation Act, as amended,
First  Financial  Bankshares,  Inc.,  a Texas  corporation,  hereby  adopts  the
following Articles of Amendment to its Restated Articles of Incorporation.

                                    ARTICLE 1

The name of the Corporation is First Financial Bankshares, Inc.

                                    ARTICLE 2

The text of  ARTICLE  FOUR of the  Restated  Articles  of  Incorporation  of the
Corporation, as amended, is hereby deleted in its entirety and replaced with the
following:

     "The aggregate number of shares which the corporation  shall have authority
     to issue is FORTY MILLION (40,000,000) of the par value of ONE CENT ($0.01)
     each."

                                    ARTICLE 3

The foregoing  amendment was adopted by the  shareholders  of the Corporation on
_________, 2006. ARTICLE 4

The  foregoing  amendment  was  approved  in the  manner  required  by the Texas
Business  Corporation  Act, as amended,  and the  constituent  documents  of the
Corporation.

Dated _______, 2006

                                               FIRST FINANCIAL BANKSHARES, INC.


                                               By:
                                                  ------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------