Financial Institutions, Inc. (the "Company") (Nasdaq:FISI), the
parent company of Five Star Bank, today reported financial results
for the quarter ended March 31, 2015. The Company's financial
results for the first quarter of 2015 include the results of
operations from the acquisition of Scott Danahy Naylon ("SDN"), an
insurance agency the Company acquired in August 2014.
Net income for the first quarter 2015 was $6.8 million, compared
to $7.9 million for the fourth quarter 2014, and $7.2 million for
the first quarter 2014. After preferred dividends, first quarter
2015 net income available to common shareholders was $6.4 million
or $0.46 per diluted share, compared with $7.6 million or $0.54 per
share for the fourth quarter 2014, and $6.9 million or $0.50 per
share for the first quarter 2014.
The Company's President and Chief Executive Officer Martin K.
Birmingham stated, "We are very pleased that our strategy for
revenue growth and diversification to enhance long term
profitability has been making meaningful progress. The 30% increase
in quarterly noninterest income as compared with the prior year's
first quarter, a primary objective of our growth strategy, has
among other benefits had an offsetting effect on the net interest
margin pressures that have impacted the industry for some time. We
are encouraged by the loan opportunities that developed as the
quarter progressed, which ultimately led to the majority of our
loan growth and a strong pipeline."
"In the first quarter, we grew our loans and deposits at or
above the levels achieved in 2014. This growth suggests successful
initial execution of our organic growth initiatives, which includes
developing the opportunity rich markets of Rochester and Buffalo.
Average earnings assets in the first quarter increased by 1% from
the fourth quarter of 2014 and 3% from the first quarter of 2014.
Among other achievements in the quarter, total deposits reached the
highest level in Company history, growing by 10% to $2.7 billion at
the end of the first quarter from $2.5 billion at December 31,
2014."
First Quarter 2015 Highlights and Recent
Developments:
- Growth strategy drives increase in fee-based services income
and market penetration, leading to record level of earnings assets
and deposits
- Noninterest income in first quarter 2015 increased by 30% from
prior year
- Grew total loans $74.1 million or 4% from a year ago
- Increased total deposits by $171.3 million or 7% from a year
ago
- Total assets increased $181.5 million or 6% from a year
ago
- Provision for loan losses increased due to the recognition of a
commercial downgrade
- Strengthened financial position through recently completed $40
million subordinated notes offering
- Quarterly cash dividend of $0.20 per common share represented a
3.54% dividend yield as of March 31, 2015 and a return of 43% of
first quarter net income to common shareholders
- Common and tangible common book value per share increased to
$19.01 and $14.18, respectively, at March 31, 2015
On April 15, 2015, the Company successfully completed the sale
of $40 million in aggregate principal amount of its 6.00% fixed to
floating rate subordinated notes due 2030 (the "Notes"). The
Company intends to treat the Notes as Tier 2 regulatory capital and
use the net proceeds of the offering for general corporate
purposes, including but not limited to, contributing capital to
Five Star Bank, its wholly-owned subsidiary, organic growth
initiatives, and potential acquisitions to expand its banking and
other complementary non-banking businesses should accretive
opportunities arise.
Kevin B. Klotzbach, the Company's Executive Vice President and
Chief Financial Officer commented, "We are gratified that the
progress made last year to position Financial Institutions for
growth in its top line and the continued execution of our plan in
the first quarter resulted in the strong demand for our recently
completed Notes offering. Due to institutional investor interest in
the Company, we increased the aggregate offering amount of the
Notes to $40 million from the initially intended amount of $35
million. We have further bolstered our capital position, which
provided a measure of financial flexibility to capitalize on
potential growth opportunities."
Net Interest Income and Net Interest Margin
Net interest income was $23.1 million in the first quarter 2015
compared to $24.1 million in the fourth quarter 2014 and $23.3
million in the first quarter 2014. When comparing the first quarter
2015 to the fourth quarter 2014, average earning assets increased
$36.6 million, including increases of $5.5 million and $30.9
million in loans and investment securities, respectively. Average
earning assets were up $69.1 million, led by a $65.9 million
increase in loans in the first quarter of 2015 compared to the same
quarter in 2014. The growth in earning assets was offset by
decreases in net interest margin. First quarter 2015 net interest
margin was 3.43%, a decrease of 13 basis points from 3.56% for the
fourth quarter of 2014 and a 9 basis point decrease from 3.52% for
the first quarter of 2014. The receipt of non-recurring loan
prepayment income resulted in higher net interest income and a
larger net interest margin during the fourth quarter of 2014.
Noninterest Income
Noninterest income was $8.3 million for the first quarter 2015
compared to $5.2 million for the fourth quarter 2014 and $6.4
million in the first quarter 2014. Included in these totals are
gains realized from the sale of investment
securities. Exclusive of those gains, noninterest income was
$7.2 million in the first quarter 2015, $4.9 million in the fourth
quarter 2014 and $6.0 million in the first quarter 2014. The
fourth quarter 2014 reflects $2.3 million of amortization of an
historic tax credit investment in a community-based
project. These types of investments are amortized in the first
year the project is placed in service and the Company recognized
the amortization as contra-income, included in noninterest income,
with an offsetting tax benefit that reduced income tax
expense. The higher noninterest income in the first quarter
2015 compared to the first quarter 2014 is primarily a result of a
$1.6 million increase in insurance income, reflecting the
contributions from SDN, which was acquired during the third quarter
2014 as part of the Company's strategy to diversify its business
lines and increase noninterest income through additional fee-based
services.
Noninterest Expense
Noninterest expense was $19.0 million for the first quarter 2015
compared to $19.4 million for the fourth quarter 2014 and $17.2
million in the first quarter 2014. Salaries and employee
benefits expense increased $967 thousand from the first quarter
2014, reflecting higher pension costs, additional personnel as a
result of the SDN acquisition and the hiring of additional
personnel associated with the Company's expansion
initiatives. Other noninterest expense for the first quarter
2015 included an increase of $153 thousand in intangible asset
amortization attributable to the SDN acquisition.
Income Tax Expense
Income tax expense was $2.9 million in the first quarter 2015,
compared to $84 thousand in the fourth quarter 2014 and $3.1
million in the first quarter 2014. Lower income tax expense
during the fourth quarter 2014 was primarily driven by the
favorable impact of $3.0 million in Federal and New York State
historic tax credits realized in the fourth quarter 2014, as
discussed above. As a result of the historic tax credits, the
fourth quarter 2014 effective tax rate was 1.0%, compared with an
effective tax rate of 29.8% for the first quarter 2015 and 30.0% in
the first quarter 2014.
Balance Sheet and Capital Management
Total assets were $3.20 billion at March 31, 2015, up $107.6
million from $3.09 billion at December 31, 2014 and up $181.5
million from $3.02 billion at March 31, 2014.
Cash and cash equivalents were $136.0 million at March 31, 2015,
up $77.8 million from December 31, 2014 and up $63.6 million from
March 31, 2014. The higher cash and cash equivalents balance
resulted from strong public deposit inflows at the end of the first
quarter of 2015.
Total loans were $1.92 billion at March 31, 2015, up $11.0
million from December 31, 2014 and up $74.1 million from March 31,
2014. The year-to-date increase in loans is primarily
attributable to organic commercial loan growth. The increase
in loans from the prior year is primarily attributable to growth in
commercial, home equity and consumer indirect loans. Total
investment securities were $945.5 million at March 31, 2015, up
$28.6 million or 3% from the end of the prior quarter and up $17.3
million or 2% compared with the March 31, 2014.
Total deposits were $2.70 billion at March 31, 2015, an increase
of $254.2 million from December 31, 2014 and an increase of $171.3
million from March 31, 2014. The increase during the first
quarter of 2015 was mainly due to seasonal inflows of municipal
deposits, while the year-over-year increase was due to higher
municipal deposits as well as successful business development
efforts. Public deposit balances represented 30% of total
deposits at March 31, 2015, compared to 25% at December 31, 2014
and 28% at March 31, 2014.
Short-term borrowings were $175.6 million at March 31, 2015,
down $159.2 million from December 31, 2014 and down $21.2 million
from March 31, 2014. Short-term borrowings are often utilized
to manage the seasonal outflows of municipal deposits.
Shareholders' equity was $286.7 million at March 31, 2015,
compared with $279.5 million at December 31, 2014 and $262.9
million at March 31, 2014. Common book value per share was
$19.01 at March 31, 2015, an increase of $0.44 from $18.57 at
December 31, 2014 and $1.29 from $17.72 at March 31,
2014. Tangible common book value per share was $14.18 at March
31, 2015, compared to $13.71 at December 31, 2014 and $14.12 at
March 31, 2014.
During the first quarter of 2015, the Company declared a common
stock dividend of $0.20 per common share, consistent with the prior
quarter and up by 5%, or $0.01 per share, from the first quarter of
2014. The first quarter 2015 dividend returned 43% of the
quarter's net income to common shareholders.
The Company's leverage ratio was 7.53% at March 31, 2015,
compared to 7.35% at December 31, 2014 and 7.51% at March 31,
2014. Goodwill and intangible assets recorded during the third
quarter 2014 in conjunction with the addition of SDN resulted in a
reduction in capital ratios upon acquisition. Such goodwill
and intangible assets are excluded from regulatory capital under
regulatory accounting practices.
Credit Quality
Non-performing loans at March 31, 2015 increased $919 thousand
compared with December 31, 2014, primarily due to a $690 thousand
increase in non-performing commercial loans. Included in
non-performing loans at March 31, 2015 is one $2.6 million
commercial credit relationship which we placed on nonaccrual status
during the first quarter 2015. This downgrade resulted in an
increase in our provision and allowance for losses of approximately
$800 thousand. The loans comprising this credit relationship are
performing in accordance with their contractual terms as of March
31, 2015 and the Company continues to monitor this relationship
closely. The ratio of non-performing loans to total loans was
0.58% at March 31, 2015 compared with 0.53% at December 31, 2014
and 0.88% at March 31, 2014.
The provision for loans losses for the first quarter 2015 was
$2.7 million, an increase of $831 thousand from the prior quarter
and $635 thousand from the first quarter 2014. The increase in
the provision for loan losses in the first quarter 2015 was
primarily related to the credit relationship placed on nonaccrual
status referenced above. Net charge-offs were $3.2 million
during the first quarter 2015, a $1.7 million increase compared to
the prior quarter and $1.5 million from the first quarter
2014. The increase in net charge-offs was primarily
driven by the first quarter 2015 charge-off of two commercial loan
relationships totaling $1.7 million that had been previously
reserved by the Company. The ratio of annualized net
charge-offs to total average loans was 0.68% during the current
quarter, compared to 0.32% during the prior quarter and 0.37%
during the first quarter 2014.
The ratio of allowance for loans losses to total loans was 1.41%
at March 31, 2015, compared with 1.45% at December 31, 2014 and
1.47% at March 31, 2014. The ratio of allowance for loans
losses to non-performing loans was 246% at March 31, 2015, compared
with 272% at December 31, 2014 and 167% at March 31, 2014.
About Financial Institutions, Inc.
Financial Institutions, Inc. provides diversified financial
services through its subsidiaries, Five Star Bank and Scott Danahy
Naylon. Five Star Bank provides a wide range of consumer and
commercial banking services to individuals, municipalities and
businesses through a network of over 50 offices and more than 60
ATMs throughout Western and Central New York State. Scott
Danahy Naylon provides a broad range of insurance services to
personal and business clients across 44 states. Financial
Institutions, Inc. and its subsidiaries employ approximately 650
individuals. The Company's stock is listed on the Nasdaq
Global Select Market under the symbol FISI and is a member of the
NASDAQ OMX ABA Community Bank Index. Additional information is
available at the Company's website: www.fiiwarsaw.com.
Non-GAAP Financial Information
This news release contains financial information, such as
tangible common equity, determined by methods other than in
accordance with U.S. generally accepted accounting principles
("GAAP"). The Company believes that non-GAAP financial
measures provide a meaningful comparison of the underlying
operational performance of the Company, and facilitate investors'
assessments of its business and performance trends. In addition,
the Company believes the exclusion of these non-operating items
enables management to perform a more effective evaluation and
comparison of the Company's results and to assess performance in
relation to the company's ongoing operations. These disclosures
should not be viewed as a substitute for financial measures
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented
by other companies. Where non-GAAP disclosures are used in this
news release, the comparable GAAP financial measure, as well as the
reconciliation to the comparable GAAP financial measure, can be
found in Appendix A to this document.
Safe Harbor Statement
This press release may contain forward-looking statements as
defined by federal securities laws. These statements may
address issues that involve significant risks, uncertainties,
estimates and assumptions made by management. Actual results
could differ materially from current beliefs or projections. There
are a number of important factors that could affect the Company's
forward-looking statements, which include its ability to implement
its strategic plan, its ability to redeploy investment assets into
loan assets, whether it experiences greater credit losses than
expected, breaches of its third party information systems, the
attitudes and preferences of its customers, its ability to
successfully integrate and profitably operate acquired businesses,
the competitive environment, fluctuations in the fair value of
securities in its investment portfolio, changes in the regulatory
environment and general economic and credit market conditions
nationally and regionally. For more information about these
factors and other factors that could affect the Company's
forward-looking statements, please see the Company's Annual Report
on Form 10-K and its Quarterly Reports on Form 10-Q on file with
the SEC. All of these factors should be carefully reviewed, and
readers should not place undue reliance on these forward-looking
statements. Except as required by law, the Company undertakes
no obligation to revise these statements following the date of this
press release.
FINANCIAL INSTITUTIONS,
INC. |
Selected Financial
Information (Unaudited) |
(Amounts in thousands, except per
share amounts) |
|
|
|
|
|
|
|
2015 |
2014 |
|
March
31, |
December
31, |
September
30, |
June
30, |
March
31, |
SELECTED BALANCE SHEET
DATA: |
|
|
|
|
|
Cash and cash equivalents |
$135,972 |
58,151 |
87,582 |
64,832 |
72,401 |
Investment securities: |
|
|
|
|
|
Available for sale |
639,275 |
622,494 |
585,479 |
601,903 |
674,650 |
Held-to-maturity |
306,255 |
294,438 |
285,967 |
262,057 |
253,576 |
Total investment
securities |
945,530 |
916,932 |
871,446 |
863,960 |
928,226 |
Loans held for sale |
656 |
755 |
1,029 |
201 |
900 |
Loans: |
|
|
|
|
|
Commercial business |
277,464 |
267,409 |
275,107 |
277,685 |
268,352 |
Commercial mortgage |
479,226 |
475,092 |
469,485 |
469,055 |
468,763 |
Residential mortgage |
97,717 |
100,101 |
103,044 |
106,206 |
110,164 |
Home equity |
386,961 |
386,615 |
382,703 |
369,578 |
332,348 |
Consumer indirect |
662,213 |
661,673 |
656,215 |
652,748 |
647,546 |
Other consumer |
19,373 |
21,112 |
21,291 |
21,392 |
21,667 |
Total loans |
1,922,954 |
1,912,002 |
1,907,845 |
1,896,664 |
1,848,840 |
Allowance for loan losses |
27,191 |
27,637 |
27,244 |
27,166 |
27,152 |
Total loans,
net |
1,895,763 |
1,884,365 |
1,880,601 |
1,869,498 |
1,821,688 |
Total interest-earning assets (1) (2) |
2,860,605 |
2,826,488 |
2,780,940 |
2,758,779 |
2,780,489 |
Goodwill and other intangible assets,
net |
68,396 |
68,639 |
68,887 |
49,826 |
49,913 |
Total assets |
3,197,077 |
3,089,521 |
3,055,304 |
2,993,264 |
3,015,619 |
Deposits: |
|
|
|
|
|
Noninterest-bearing demand |
559,646 |
571,260 |
571,549 |
551,229 |
532,914 |
Interest-bearing demand |
611,104 |
490,190 |
530,783 |
507,083 |
541,660 |
Savings and money market |
922,093 |
795,835 |
805,522 |
766,594 |
812,734 |
Certificates of deposit |
611,852 |
593,242 |
630,970 |
625,172 |
646,112 |
Total
deposits |
2,704,695 |
2,450,527 |
2,538,824 |
2,450,078 |
2,533,420 |
Borrowings |
175,573 |
334,804 |
215,967 |
254,683 |
196,746 |
Total interest-bearing liabilities |
2,320,622 |
2,214,071 |
2,183,242 |
2,153,532 |
2,197,252 |
Shareholders' equity |
286,689 |
279,532 |
277,758 |
269,827 |
262,865 |
Common shareholders' equity (3) |
269,349 |
262,192 |
260,418 |
252,487 |
245,523 |
Tangible common equity (5) |
200,953 |
193,553 |
191,531 |
202,661 |
195,610 |
Unrealized gain (loss) on investment
securities, net of tax |
$5,241 |
1,933 |
(374) |
1,292 |
(1,467) |
|
|
|
|
|
|
Common shares outstanding |
14,167 |
14,118 |
14,094 |
13,863 |
13,853 |
Treasury shares |
231 |
280 |
304 |
299 |
309 |
|
|
|
|
|
|
CAPITAL RATIOS AND PER SHARE
DATA: |
|
|
|
|
|
Leverage ratio (4) |
7.53% |
7.35 |
7.34 |
7.64 |
7.51 |
Common equity Tier 1 ratio (4) |
9.66% |
n/a |
n/a |
n/a |
n/a |
Tier 1 risk-based capital (4) |
10.45% |
10.47 |
10.44 |
10.95 |
10.89 |
Total risk-based capital (4) |
11.69% |
11.72 |
11.69 |
12.2 |
12.14 |
Common equity to assets |
8.42% |
8.49 |
8.52 |
8.44 |
8.14 |
Tangible common equity to tangible assets
(5) |
6.42% |
6.41 |
6.41 |
6.89 |
6.60 |
|
|
|
|
|
|
Common book value per share |
$19.01 |
18.57 |
18.48 |
18.21 |
17.72 |
Tangible common book value per share (5) |
14.18 |
13.71 |
13.59 |
14.62 |
14.12 |
________ |
|
|
|
|
|
(1) Includes investment
securities at adjusted amortized cost and non-performing investment
securities. |
(2) Includes nonaccrual
loans. |
(3) Excludes preferred
shareholders' equity. |
(4) March 31, 2015
calculated under Basel III rules, which became effective January 1,
2015. |
(5) See Appendix A –
Non-GAAP to GAAP Reconciliation for the computation of this
Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL INSTITUTIONS,
INC. |
Selected Financial
Information (Unaudited) |
(Amounts in thousands, except per
share amounts) |
|
|
|
|
|
|
|
|
2015 |
2014 |
|
First |
Year ended |
Fourth |
Third |
Second |
First |
|
Quarter |
December
31, |
Quarter |
Quarter |
Quarter |
Quarter |
SELECTED INCOME STATEMENT
DATA: |
|
|
|
|
|
|
Interest income |
$24,997 |
101,055 |
25,984 |
25,129 |
24,883 |
25,059 |
Interest expense |
1,850 |
7,281 |
1,846 |
1,871 |
1,780 |
1,784 |
Net interest income |
23,147 |
93,774 |
24,138 |
23,258 |
23,103 |
23,275 |
Provision for loan losses |
2,741 |
7,789 |
1,910 |
2,015 |
1,758 |
2,106 |
Net interest income after
provision for loan losses |
20,406 |
85,985 |
22,228 |
21,243 |
21,345 |
21,169 |
Noninterest income: |
|
|
|
|
|
|
Service charges on
deposits |
1,879 |
8,954 |
2,186 |
2,277 |
2,241 |
2,250 |
Insurance income |
1,608 |
2,399 |
1,420 |
922 |
16 |
41 |
ATM and debit card |
1,193 |
4,963 |
1,269 |
1,263 |
1,257 |
1,174 |
Investment advisory |
487 |
2,138 |
491 |
524 |
561 |
562 |
Investments in limited
partnerships |
474 |
1,103 |
209 |
187 |
81 |
626 |
Company owned life
insurance |
467 |
1,753 |
504 |
421 |
425 |
403 |
Loan servicing |
167 |
568 |
118 |
120 |
176 |
154 |
Net gain on sale of loans held
for sale |
69 |
313 |
82 |
76 |
50 |
105 |
Net gain on investment
securities |
1,062 |
2,041 |
264 |
515 |
949 |
313 |
Net gain (loss) on sale of
other assets |
4 |
69 |
8 |
72 |
24 |
(35) |
Amortization of tax credit
investment |
-- |
(2,323) |
(2,323) |
-- |
-- |
-- |
Other |
887 |
3,372 |
927 |
884 |
797 |
764 |
Total noninterest
income |
8,297 |
25,350 |
5,155 |
7,261 |
6,577 |
6,357 |
Noninterest expense: |
|
|
|
|
|
|
Salaries and employee
benefits |
10,223 |
38,595 |
10,551 |
9,725 |
9,063 |
9,256 |
Occupancy and equipment |
3,699 |
12,829 |
3,324 |
3,131 |
3,139 |
3,235 |
Professional services |
968 |
4,760 |
1,428 |
976 |
1,384 |
972 |
Computer and data
processing |
702 |
3,016 |
791 |
725 |
777 |
723 |
Supplies and postage |
563 |
2,053 |
499 |
507 |
535 |
512 |
FDIC assessments |
418 |
1,592 |
392 |
390 |
388 |
422 |
Advertising and promotions |
239 |
805 |
196 |
216 |
214 |
179 |
Other |
2,199 |
8,705 |
2,198 |
2,285 |
2,308 |
1,914 |
Total noninterest
expense |
19,011 |
72,355 |
19,379 |
17,955 |
17,808 |
17,213 |
Income before
income taxes |
9,692 |
38,980 |
8,004 |
10,549 |
10,114 |
10,313 |
Income tax expense |
2,891 |
9,625 |
84 |
3,365 |
3,082 |
3,094 |
Net income |
6,801 |
29,355 |
7,920 |
7,184 |
7,032 |
7,219 |
Preferred stock dividends |
365 |
1,462 |
365 |
366 |
365 |
366 |
Net income available to common
shareholders |
$6,436 |
27,893 |
7,555 |
6,818 |
6,667 |
6,853 |
|
|
|
|
|
|
|
FINANCIAL RATIOS AND STOCK
DATA: |
|
|
|
|
|
|
Earnings per share – basic |
$0.46 |
2.01 |
0.54 |
0.49 |
0.48 |
0.50 |
Earnings per share – diluted |
$0.46 |
2.00 |
0.54 |
0.49 |
0.48 |
0.50 |
Cash dividends declared on common stock |
$0.20 |
0.77 |
0.20 |
0.19 |
0.19 |
0.19 |
Common dividend payout ratio (1) |
43.48% |
38.31 |
37.04 |
38.78 |
39.58 |
38.00 |
Dividend yield (annualized) |
3.54% |
3.06 |
3.15 |
3.35 |
3.25 |
3.35 |
Return on average assets |
0.89% |
0.98 |
1.03 |
0.95 |
0.95 |
0.99 |
Return on average equity |
9.68% |
10.80 |
11.07 |
10.41 |
10.52 |
11.19 |
Return on average common equity (2) |
9.75% |
10.96 |
11.25 |
10.55 |
10.66 |
11.38 |
Efficiency ratio (3) |
60.27% |
58.59 |
59.58 |
57.65 |
60.15 |
56.96 |
Stock price (Nasdaq: FISI): |
|
|
|
|
|
|
High |
$25.38 |
27.02 |
27.02 |
24.94 |
24.88 |
25.69 |
Low |
$21.67 |
19.72 |
22.45 |
21.71 |
22.17 |
19.72 |
Close |
$22.93 |
25.15 |
25.15 |
22.48 |
23.42 |
23.02 |
________ |
|
|
|
|
|
|
(1) Common dividend payout
ratio equals dividends declared during the period divided by
earnings per share for the equivalent period. |
(2) Annualized net income
available to common shareholders divided by average common
equity. |
(3) Efficiency ratio equals
noninterest expense less other real estate expense and amortization
of intangible assets as a percentage of net revenue, defined as the
sum of tax-equivalent net interest income and noninterest income
before net gains on investment securities and amortization of tax
credit investment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL INSTITUTIONS,
INC. |
Selected Financial
Information (Unaudited) |
(Amounts in
thousands) |
|
|
2015 |
2014 |
|
First |
Year ended |
Fourth |
Third |
Second |
First |
|
Quarter |
December
31, |
Quarter |
Quarter |
Quarter |
Quarter |
SELECTED AVERAGE
BALANCES: |
|
|
|
|
|
|
Federal funds sold and interest-earning
deposits |
$124 |
114 |
-- |
51 |
94 |
316 |
Investment securities (1) |
907,871 |
877,673 |
876,932 |
854,030 |
875,855 |
904,437 |
Loans (2): |
|
|
|
|
|
|
Commercial business |
264,814 |
269,877 |
265,979 |
273,239 |
275,105 |
265,137 |
Commercial mortgage |
478,705 |
473,372 |
473,694 |
473,168 |
473,883 |
472,733 |
Residential mortgage |
99,264 |
107,254 |
101,982 |
105,255 |
108,535 |
113,390 |
Home equity |
386,046 |
359,511 |
384,138 |
377,360 |
346,911 |
328,833 |
Consumer indirect |
661,727 |
651,279 |
658,337 |
653,192 |
651,150 |
642,241 |
Other consumer |
19,736 |
21,094 |
20,630 |
20,847 |
20,855 |
22,062 |
Total loans |
1,910,292 |
1,882,387 |
1,904,760 |
1,903,061 |
1,876,439 |
1,844,396 |
Total interest-earning assets |
2,818,287 |
2,760,174 |
2,781,692 |
2,757,142 |
2,752,388 |
2,749,149 |
Goodwill and other intangible assets,
net |
68,527 |
57,039 |
68,771 |
59,306 |
49,879 |
49,968 |
Total assets |
3,115,516 |
2,994,604 |
3,052,499 |
2,985,920 |
2,973,735 |
2,965,400 |
Interest-bearing liabilities: |
|
|
|
|
|
|
Interest-bearing demand |
551,503 |
504,584 |
511,749 |
486,311 |
509,398 |
511,073 |
Savings and money market |
839,218 |
783,784 |
824,661 |
758,306 |
789,956 |
761,799 |
Certificates of deposit |
602,115 |
624,299 |
614,654 |
634,400 |
629,945 |
618,126 |
Borrowings |
251,768 |
247,956 |
232,935 |
259,995 |
224,801 |
274,414 |
Total
interest-bearing liabilities |
2,244,604 |
2,160,623 |
2,183,999 |
2,139,012 |
2,154,100 |
2,165,412 |
Noninterest-bearing demand deposits |
564,500 |
545,904 |
564,336 |
556,485 |
537,895 |
524,346 |
Total deposits |
2,557,336 |
2,458,571 |
2,515,400 |
2,435,502 |
2,467,194 |
2,415,344 |
Total liabilities |
2,830,557 |
2,722,730 |
2,768,693 |
2,712,274 |
2,705,578 |
2,703,777 |
Shareholders' equity |
284,959 |
271,874 |
283,806 |
273,646 |
268,157 |
261,623 |
Common equity (3) |
267,619 |
254,533 |
266,466 |
256,306 |
250,815 |
244,281 |
Tangible common equity (4) |
$199,092 |
197,494 |
197,695 |
197,000 |
200,936 |
194,313 |
Common shares outstanding: |
|
|
|
|
|
|
Basic |
14,063 |
13,893 |
14,049 |
13,953 |
13,791 |
13,773 |
Diluted |
14,113 |
13,946 |
14,112 |
14,007 |
13,838 |
13,824 |
|
|
|
|
|
|
|
SELECTED AVERAGE
YIELDS: |
|
|
|
|
|
|
(Tax equivalent basis) |
|
|
|
|
|
|
Federal funds sold and interest-earning
deposits |
0.19% |
0.14 |
-- |
0.28 |
0.07 |
0.08 |
Investment securities |
2.47% |
2.44 |
2.48 |
2.43 |
2.45 |
2.43 |
Loans |
4.27% |
4.38 |
4.44 |
4.31 |
4.32 |
4.45 |
Total interest-earning assets |
3.69% |
3.76 |
3.82 |
3.73 |
3.73 |
3.79 |
Interest-bearing demand |
0.11% |
0.12 |
0.11 |
0.12 |
0.12 |
0.13 |
Savings and money market |
0.10% |
0.12 |
0.11 |
0.12 |
0.12 |
0.13 |
Certificates of deposit |
0.84% |
0.78 |
0.82 |
0.78 |
0.76 |
0.74 |
Borrowings |
0.37% |
0.37 |
0.36 |
0.37 |
0.36 |
0.38 |
Total interest-bearing liabilities |
0.33% |
0.34 |
0.34 |
0.35 |
0.33 |
0.33 |
Net interest rate spread |
3.36% |
3.42 |
3.48 |
3.38 |
3.40 |
3.46 |
Net interest rate margin |
3.43% |
3.50 |
3.56 |
3.46 |
3.47 |
3.52 |
________ |
|
|
|
|
|
|
(1) Includes investment
securities at adjusted amortized cost and non-performing investment
securities. |
(2) Includes nonaccrual
loans. |
(3) Excludes preferred
shareholders' equity. |
(4) See Appendix A –
Non-GAAP to GAAP Reconciliation for the computation of this
Non-GAAP measure. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL INSTITUTIONS,
INC. |
Selected Financial
Information (Unaudited) |
(Amounts in thousands) |
|
|
|
|
|
|
|
2015 |
2014 |
|
First |
Fourth |
Third |
Second |
First |
|
Quarter |
Quarter |
Quarter |
Quarter |
Quarter |
ASSET QUALITY DATA: |
|
|
|
|
|
Allowance for Loan
Losses |
|
|
|
|
|
Beginning balance |
$27,637 |
27,244 |
27,166 |
27,152 |
26,736 |
Net loan charge-offs (recoveries): |
|
|
|
|
|
Commercial business |
1,093 |
(15) |
44 |
(65) |
39 |
Commercial mortgage |
520 |
(57) |
66 |
159 |
(7) |
Residential mortgage |
22 |
22 |
11 |
61 |
57 |
Home equity |
74 |
(4) |
66 |
127 |
95 |
Consumer indirect |
1,317 |
1,420 |
1,577 |
1,336 |
1,350 |
Other consumer |
161 |
151 |
173 |
126 |
156 |
Total net
charge-offs |
3,187 |
1,517 |
1,937 |
1,744 |
1,690 |
Provision for loan losses |
2,741 |
1,910 |
2,015 |
1,758 |
2,106 |
Ending balance |
$27,191 |
27,637 |
27,244 |
27,166 |
27,152 |
|
|
|
|
|
|
Net charge-offs (recoveries) to average loans
(annualized): |
|
|
|
|
|
Commercial business |
1.67% |
(0.02) |
0.06 |
(0.09) |
0.06 |
Commercial mortgage |
0.44% |
(0.05) |
0.06 |
0.13 |
(0.01) |
Residential mortgage |
0.09% |
0.09 |
0.04 |
0.23 |
0.21 |
Home equity |
0.08% |
0.00 |
0.07 |
0.15 |
0.12 |
Consumer indirect |
0.81% |
0.86 |
0.96 |
0.82 |
0.85 |
Other consumer |
3.31% |
2.90 |
3.29 |
2.42 |
2.87 |
Total loans |
0.68% |
0.32 |
0.40 |
0.37 |
0.37 |
|
|
|
|
|
|
Supplemental information
(1) |
|
|
|
|
|
Non-performing loans: |
|
|
|
|
|
Commercial business |
$4,587 |
4,288 |
3,258 |
3,589 |
3,706 |
Commercial mortgage |
3,411 |
3,020 |
2,460 |
2,734 |
9,545 |
Residential mortgage |
1,361 |
1,194 |
656 |
758 |
760 |
Home equity |
672 |
463 |
464 |
371 |
826 |
Consumer indirect |
994 |
1,169 |
1,300 |
1,427 |
1,387 |
Other consumer |
47 |
19 |
46 |
12 |
46 |
Total
non-performing loans |
11,072 |
10,153 |
8,184 |
8,891 |
16,270 |
Foreclosed assets |
139 |
194 |
509 |
554 |
412 |
Non-performing investment securities |
-- |
-- |
-- |
-- |
113 |
Total non-performing
assets |
$11,211 |
10,347 |
8,693 |
9,445 |
16,795 |
|
|
|
|
|
|
Total non-performing loans to total
loans |
0.58% |
0.53 |
0.43 |
0.47 |
0.88 |
Total non-performing assets to total
assets |
0.35% |
0.33 |
0.28 |
0.32 |
0.56 |
Allowance for loan losses to total loans |
1.41% |
1.45 |
1.43 |
1.43 |
1.47 |
Allowance for loan losses to non-performing
loans |
246% |
272 |
333 |
306 |
167 |
________ |
|
|
|
|
|
(1) At period end. |
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL INSTITUTIONS,
INC. |
Appendix A - Non-GAAP to
GAAP Reconciliation (Unaudited) |
(In thousands, except per share
amounts) |
|
2015 |
2014 |
|
First |
Year ended |
Fourth |
Third |
Second |
First |
|
Quarter |
December
31, |
Quarter |
Quarter |
Quarter |
Quarter |
Ending tangible assets: |
|
|
|
|
|
|
Total assets |
$3,197,077 |
|
3,089,521 |
3,055,304 |
2,993,264 |
3,015,619 |
Less: Goodwill and other intangible
assets, net |
68,396 |
|
68,639 |
68,887 |
49,826 |
49,913 |
Tangible assets (non-GAAP) |
$3,128,681 |
|
3,020,882 |
2,986,417 |
2,943,438 |
2,965,706 |
|
|
|
|
|
|
|
Ending tangible common
equity: |
|
|
|
|
|
|
Common shareholders' equity |
$269,349 |
|
262,192 |
260,418 |
252,487 |
245,523 |
Less: Goodwill and other intangible
assets, net |
68,396 |
|
68,639 |
68,887 |
49,826 |
49,913 |
Tangible common equity (non-GAAP) |
$200,953 |
|
193,553 |
191,531 |
202,661 |
195,610 |
|
|
|
|
|
|
|
Tangible common equity to tangible assets
(non-GAAP) (1) |
6.42% |
|
6.41 |
6.41 |
6.89 |
6.60 |
|
|
|
|
|
|
|
Common shares outstanding |
14,167 |
|
14,118 |
14,094 |
13,863 |
13,853 |
Tangible common book value per share
(non-GAAP) (2) |
$14.18 |
|
13.71 |
13.59 |
14.62 |
14.12 |
|
|
|
|
|
|
|
Average tangible common
equity: |
|
|
|
|
|
|
Average common equity |
$267,619 |
254,533 |
266,466 |
256,306 |
250,815 |
244,281 |
Average goodwill and other intangible assets,
net |
68,527 |
57,039 |
68,771 |
59,306 |
49,879 |
49,968 |
Average tangible common equity
(non-GAAP) |
$199,092 |
197,494 |
197,695 |
197,000 |
200,936 |
194,313 |
________ |
|
|
|
|
|
|
(1) Tangible common equity
divided by tangible assets. |
(2) Tangible common equity
divided by common shares outstanding. |
|
|
|
|
|
|
|
CONTACT: For additional information contact:
Kevin B. Klotzbach
Chief Financial Officer & Treasurer
Phone: 585.786.1130
Email: KBKlotzbach@five-starbank.com
Jordan Darrow
Darrow Associates
Phone: 631.367.1866
Email: jdarrow@darrowir.com
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