For More Information: Ronald A. Miller Executive Vice President and Chief Financial Officer Phone: 585-786-1102
FOR IMMEDIATE RELEASEFinancial Institutions Reports Results for Third Quarter 2006
and Announces Stock Repurchase Program
•
Solid results reflect improved asset quality, lower costs and continued operating efficiencies
•
Board authorizes $5.0 million stock repurchase
•
$1.4 million gain on trust business sale
•
$25 million secured debt to be repaid
WARSAW, N.Y., October 25, 2006 — Financial Institutions, Inc. (NASDAQ: FISI) (“FI”), the parent company of Five Star Bank, today announced its financial results for the third quarter ended September 30, 2006. Net income for the quarter was $5.2 million, or $0.43 per diluted share, compared with net income of $9.0 million, or $0.76 per diluted share, for the third quarter of 2005. Included in income for the third quarter of last year was a net gain of $9.2 million related to the sale or settlement of lower quality commercial related loans. This year’s third quarter included a $1.4 million gain on the sale of the Company’s trust operations, which closed September 29, 2006.
Excluding these impacts, the primary contributors to the 2006 third quarter results were a $0.5 million credit for loan losses compared with a $1.5 million provision for loan losses last year and a $1.7 million reduction in noninterest expense compared with the same quarter last year. The improved risk profile of the Company’s loan portfolio contributed to the credit for loan losses, while lower noninterest expenses are the result of improved operating efficiencies and the reduction of costs associated with asset quality issues and regulatory matters.
Net income for the nine-month period of 2006 was $14.4 million, or $1.17 per diluted share, compared with a net loss of $0.7 million, or $0.16 net loss per diluted share for the same period last year. The 2005 nine-month period results reflected a higher provision for loan losses as a result of write-downs associated with the decision to sell approximately $169 million of commercial related loans in 2005.
Total assets at September 30, 2006 were $1.952 billion compared with $2.022 billion and $2.095 billion at December 31, 2005 and September 30, 2005, respectively.
Mr. Peter G. Humphrey, President and CEO of Financial Institutions, Inc., stated, “The risk profile of our loan portfolio continues to improve. Our team continues to be patient and disciplined in our approach to lending in our challenging marketplace. In addition, higher quality credits are helping to offset the exit of lower quality credits. We have put in place many initiatives that we believe over the long run will result in our gaining greater market share, strengthened brand recognition, a solid loan portfolio, and a strong base of loyal customers. These initiatives include:
•
A retooled small business lending program. The number of approved SBA loans increased by approximately 49% over last year, and we are currently ranked among the top 100 SBA lenders nationally in number of loans originated.
•
We offer same-day response for credit approval on most consumer and small business loans
•
Our marketing and customer service remains local, responsive and friendly.
•
We have implemented a progressive sales and marketing plan through customer events, signage, and print, television and radio advertisements throughout our territory.
•
We have established consistent service standards throughout the Company, and
•
We are expanding our branch-based lending programs.”
Common Stock Repurchase Program
At its regular meeting today, the Company’s Board of Directors approved a one-year, $5.0 million common stock repurchase program. The Company’s stock closed today at $22.13 per share and there were 11.3 million shares outstanding at September 30, 2006.
Under the program, stock repurchases may be made either in the open market or through privately negotiated transactions in amounts and at times and prices as determined by the Company.
Erland E. “Erkie” Kailbourne, Chairman of the Board commented, “Given the Company’s strengthened financial performance and available capital, we believe a common stock repurchase program together with the other initiatives the Company has taken over the past few quarters will continue to enhance shareholder value.”
Credit for Loan Losses, Allowance for Loan Losses and Asset Quality
FI recorded a credit for loan losses of $0.5 million and $1.8 million for the third quarter and the first nine months of 2006, respectively. Net loan charge-offs were $0.4 million for the third quarter and
$0.7 million for the first nine months of 2006. Nonperforming loans at September 30, 2006 were $12.8 million, representing reductions of $2.4 million from June 30, 2006, $5.2 million from December 31, 2005, and $3.4 million from September 30, 2005. The improved risk profile of the loan portfolio, the low level of net loan charge-offs, and a smaller loan portfolio all contributed to the credit for loan losses for the quarter and year-to-date periods. The allowance for loan losses was $17.7 million and $20.2 million at September 30, 2006 and December 31, 2005, respectively.
Net loan charge-offs to average loans (annualized) for the third quarter 2006 were 0.18% and for the first nine months of 2006 were .10%. At September 30, 2006, the allowance for loan losses as a percentage of total loans was 1.88% compared with 1.95% at June 30, 2006, 2.04% at December 31, 2005 and 2.05% at September 30, 2005. The ratio of allowance for loan losses to nonperforming loans was 138% at September 30, 2006 compared with 121% at June 30, 2006, 112% at December 31, 2005 and 128% at September 30, 2005.
The ratio of nonperforming loans to total loans was 1.36% at the end of the third quarter 2006 compared with 1.61% at June 30, 2006, 1.82% at December 31, 2005 and 1.60% at the end of last year’s third quarter.
Net Interest Income
For the third quarter of 2006 net interest income was $14.7 million compared with $16.3 million for the third quarter of 2005. For the 2006 and 2005 nine-month periods, net interest income was $45.2 million and $51.5 million, respectively. The decline in net interest income was principally due to a decline in the amount of earning assets. For the third quarter of 2006, average earning assets were $1.778 billion compared with $1.933 billion for the third quarter of 2005 and for the nine months ended September 30, 2006, average earning assets were $1.814 billion compared with $1.990 billion for the same period last year. Net interest margin was 3.56% for the third quarter of 2006, down 3 basis points from the same period last year and for the first nine months of 2006 net interest margin was 3.59%, down 9 basis points from the comparable period in 2005.
Loans at September 30, 2006 were $941 million, down $72 million, or 7%, when compared with $1.013 billion at the same time last year and down $12 million from June 30, 2006. Commercial loans represent $64 million of the decline from last year and $10 million of the drop from June 30, 2006.
Total average deposits were $1.593 billion for the third quarter of 2006 compared with $1.767 billion for the third quarter of 2005 and for the first nine months of 2006 averaged $1.637 billion compared with $1.807 billion for the first nine months of 2005. Contributing to the decline in deposits were fewer certificates of deposit, including brokered certificates of deposit, as the Company actively managed to lower the level of these higher cost deposits. Other deposit categories have declined from deposit outflows associated with the effects of the 2005 loan sale and from competitors offering higher rate products.
In addition to the decline in loans and deposits, the overall mix of the Company’s earning assets has changed, with loans, which generally have a higher interest yield then investments, representing a lower percentage of earning assets. For the first nine months of 2006 average loans represented 53% of earning assets compared with 59% for the same period last year. The decline in the volume of total earning assets together with the change in the mix of earning assets and a small drop in net interest margin collectively result in the decline in net interest income.
Noninterest Income
Noninterest income for the third quarter and nine months ended September 30, 2006 was $7.0 million and $17.1 million, respectively. This compared with noninterest income in the third quarter and first nine months of 2005 of $14.7 million and $24.4 million, respectively. Service charges on deposits, the largest contributor to noninterest income, at $3.1 million and $8.6 million for the 2006 third quarter and nine month periods, respectively, was relatively unchanged from the comparable periods in 2005. ATM and debit card income grew $0.1 million, or 31%, and $0.4 million, or 33%, for the quarter and nine-month period this year when compared with the same periods last year. Mortgage banking activities for the third quarter of 2006 were down $0.1 million when compared with the third quarter of 2005 and for the first nine months of 2006 are down $0.4 million from the first nine months of 2005.
As previously mentioned, the third quarter of 2006 included a $1.4 million gain on the sale of the Company’s trust operations, while the third quarter of 2005 included a $9.2 million net gain on the sale or settlement of commercial related loans. Also included in noninterest income for the first nine months of 2006 was $0.5 million in income associated with corporate owned life insurance.
Noninterest Expense
Noninterest expense for the third quarter of 2006 decreased $1.7 million, or 11%, to $14.6 million from
$16.3 million for the third quarter of 2005. For the first nine months of 2006, noninterest expense declined $4.9 million, or 10%, to $44.4 million compared with $49.3 million for the same period in 2005. These declines were related to operational efficiencies gained from the consolidation of the Company’s subsidiary banks at the end of 2005, the elimination of professional service fees related to last year’s asset quality and regulatory issues, as well as lower FDIC insurance costs.
The Company’s efficiency ratio for the third quarter of 2006 was 67.21% compared with 67.29% for the second quarter of 2006 and 70.24% for the third quarter of 2005. The improved efficiency ratio is reflective of a proportionately greater reduction in noninterest expense than in revenue.
Capital Management and Outlook
On October 2, 2006 the Company paid a third quarter common dividend of $.09 per share, which represented an increase of $.01 per share over the second quarter of 2006.
At its regular meeting today the FI Board approved the early repayment of a $25 million term loan that FI has with another financial institution. The debt was scheduled to be repaid in equal annual installments beginning in December 2007 and ending in December 2010. It is expected that this action will result in an annual increase in net interest income of approximately $0.5 million.
“Through patience and discipline, the Company has built a solid capital base from which we can grow. We believe that our 12.5% increase in the quarterly dividend, the Board approval of our stock repurchase program and our debt repayment action are all actions that will contribute to growing shareholder value,” Mr. Humphrey noted.
Shareholders’ equity at September 30, 2006 was $182.0 million compared with $171.8 million at December 31, 2005.
Mr. Humphrey concluded, “Our disciplined credit culture, successful consolidation and enhanced asset quality has stabilized our franchise allowing us to focus on new business opportunities to grow our market share within our 10,000 square-mile footprint.”
Webcast and Conference Call
A company-hosted teleconference will be held at 10:00 a.m. eastern time on October 26, 2006. During the teleconference, Peter G. Humphrey, President and CEO, and Ronald A. Miller, Executive Vice President and CFO, will review the financial and operating results for the period and discuss Financial Institutions’ corporate strategy and outlook. A question-and-answer session will follow.
The Financial Institutions conference call can be accessed the following ways:
•
The live webcast can be found athttp://www.fiiwarsaw.com. Participants should go to the website 10-15 minutes prior to the scheduled conference in order to download any necessary audio software.
•
The teleconference can be accessed by dialing 1-913-312-1299 approximately 5-10 minutes prior to the call.
To listen to the archived call:
•
The archived webcast will be athttp://www.fiiwarsaw.com. A replay can also be heard by calling 1-719-457-0820, and entering passcode 4458943. The telephonic replay will be available until November 2, 2006 at 11:59 p.m. ET.
About Financial Institutions, Inc. With total assets of $1.952 billion, Financial Institutions, Inc. is the parent company of Five Star Bank, which provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of 50 offices and 70 ATM’s in Western and Central New York State. Through its Investment Services affiliate, Five Star Investment Services, Inc., FI also provides diversified financial services to its customers and clients, including brokerage and insurance. More information on FI and its subsidiaries is available through the Company web site atwww.fiiwarsaw.com.
Safe Harbor Statement This press release contains 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 reduce operating expenses, the attitudes and preferences of customers, the competitive environment and other factors discussed in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise these statements following the date of this press release.
TABLES FOLLOW.
1
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Consolidated Statements of Income and Other Data (Dollars in thousands, except per share amounts) (Unaudited)
Three months ended
September 30,
2006
2005
$ Change
% Change
Interest and dividend income
$
25,823
$
25,495
$
328
1
%
Interest expense
11,141
9,238
1,903
21
%
Net interest income
14,682
16,257
(1,575
)
(10
)%
(Credit) provision for loan losses
(491
)
1,529
(2,020
)
(132
)%
Net interest income after (credit) provision for loan losses
15,173
14,728
445
3
%
Noninterest income:
Service charges on deposits
3,054
3,076
(22
)
(1
)%
ATM and debit card income
558
426
132
31
%
Financial services group fees and commissions
491
678
(187
)
(28
)%
Mortgage banking activities
284 14
384
(100
)
(26
)%
Income from corporate owned life insurance
14
15
(1
)
(7
)%
Net gain on sale of student loans held for sale
427
162
265
164
%
Net gain on sale of commercial-related loans held for sale
-
9,212
(9,212
)
(100
)%
Net loss on sale of premises and equipment
(12
)
(6
)
(6
)
(100
)%
Net loss on sale of other real estate and repossessed assets
(44
)
(19
)
(25
)
(132
)%
Gain on sale of the trust business
1,365
-
1,365
-
%
Other
842
821
21
3
%
Total noninterest income
6,979
14,749
(7,770
)
(53
)%
Noninterest expense:
Salaries and employee benefits
8,510
8,808
(298
)
(3
)%
Occupancy and equipment
2,293
2,252
41
2
%
Supplies and postage
442
530
(88
)
(17
)%
Amortization of intangibles
108
108
-
-
%
Computer and data processing
469
412
57
14
%
Professional fees
660
1,344
(684
)
(51
)%
Other
2,111
2,858
(747
)
(26
)%
Total noninterest expense
14,593
16,312
(1,719
)
(11
)%
Income from continuing operations before income taxes
7,559
13,165
(5,606
)
(43
)%
Income tax provision from continuing operations
2,314
4,205
(1,891
)
(45
)%
Income from continuing operations
5,245
8,960
(3,715
)
(41
)%
Discontinued operation:
Loss from operation of discontinued subsidiary
-
(84
)
84
100
%
Gain on sale of discontinued subsidiary
-
88
(88
)
(100
)%
Income tax benefit
-
(7
)
7
100
%
Income on discontinued operation
-
11
(11
)
(100
)%
Net income
$
5,245
$
8,971
$
(3,726
)
(42
)%
Preferred stock dividends
$
371
$
372
$
(1
)
-
%
Taxable-equivalent net interest income
$
15,853
$
17,418
$
(1,565
)
(9
)%
Per common share data:
Basic:
Income from continuing operations
$
0.43
$
0.76
$
(0.33
)
(43
)%
Net income
$
0.43
$
0.76
$
(0.33
)
(43
)%
Diluted:
Income from continuing operations
$
0.43
$
0.76
$
(0.33
)
(43
)%
Net income
$
0.43
$
0.76
$
(0.33
)
(43
)%
Cash dividends declared
$
0.09
$
0.08
$
0.01
13
%
Common shares outstanding:
Weighted average shares – basic
11,327,362
11,333,374
Weighted average shares – diluted
11,371,963
11,353,367
2
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Additional Data (Dollars in thousands, except per share amounts) (Unaudited)
Three months ended
September 30,
2006
2005
Performance ratios, annualized
Return on average assets
1.09
%
1.71
%
Return on average common equity
12.16
%
22.43
%
Common dividend payout ratio
20.93
%
10.53
%
Net interest margin (tax-equivalent)
3.56
%
3.59
%
Efficiency ratio (1)
67.21
%
70.24
%
Asset quality data:
Past due over 90 days and accruing
$
—
$
36
Nonaccrual loans
12,804
16,140
Total nonperforming loans
12,804
16,176
Other real estate owned (ORE)
1,551
1,197
Total nonperforming loans and ORE
14,355
17,373
Nonaccrual loans held for sale
—
1,681
Total nonperforming assets
$
14,355
$
19,054
Net loan charge-offs
$
418
$
1,824
Asset quality ratios:
Nonperforming loans to total loans (2)
1.36
%
1.60
%
Nonperforming loans and ORE to total loans and ORE (2)
1.52
%
1.71
%
Nonperforming assets to total assets
0.74
%
0.91
%
Allowance for loan losses to total loans (2)
1.88
%
2.05
%
Allowance for loan losses to nonperforming loans (2)
138
%
128
%
Net loan charge-offs to average loans (annualized)
0.18
%
0.71
%
Capital ratios:
Average common equity to average total assets
8.36
%
7.30
%
Leverage ratio
8.87
%
7.52
%
Tier 1 risk-based capital ratio
15.33
%
13.17
%
Risk-based capital ratio
16.58
%
14.42
%
(1)
Ratio excludes the operations of discontinued subsidiary.
(2)
Ratios exclude nonaccruing loans held for sale from nonperforming loans and exclude loans held for sale from total loans.
3
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Consolidated Statements of Income (Loss) and Other Data (Dollars in thousands, except per share amounts) (Unaudited)
Nine months ended
September 30,
2006
2005
$ Change
% Change
Interest and dividend income
$
76,848
$
77,733
$
(885
)
(1
)%
Interest expense
31,675
26,249
5,426
21
%
Net interest income
45,173
51,484
(6,311
)
(12
)%
(Credit) provision for loan losses
(1,842
)
27,110
(28,952
)
(107
)%
Net interest income after (credit) provision for loan losses
47,015
24,374
22,641
93
%
Noninterest income:
Service charges on deposits
8,559
8,605
(46
)
(1
)%
ATM and debit card income
1,645
1,233
412
33
%
Financial services group fees and commissions
1,559
2,059
(500
)
(24
)%
Mortgage banking activities
898
1,248
(350
)
(28
)%
Income from corporate owned life insurance
466
52
414
796
%
Net gain on sale and call of securities
- 604
14
(14
)
(100
)%
Net gain on sale of student loans held for sale
604 82
209
395
189
%
Net gain on sale of commercial-related loans held for sale
82
9,212
(9,130
)
(99
)%
Net gain (loss) on sale of premises and equipment
2
(103
)
105
102
%
Net gain (loss) on sale of other real estate and repossessed assets
63
(24
)
87
363
%
Gain on sale of the trust business
1,365
-
1,365
-
%
Other
1,873
1,942
(69
)
(4
)%
Total noninterest income
17,116
24,447
(7,331
)
(30
)%
Noninterest expense:
Salaries and employee benefits
25,294
26,881
(1,587
)
(6
)%
Occupancy and equipment
7,083
6,754
329
5
%
Supplies and postage
1,452
1,663
(211
)
(13
)%
Amortization of intangibles
323
323
-
-
%
Computer and data processing
1,312
1,359
(47
)
(3
)%
Professional fees
2,090
3,534
(1,444
)
(41
)%
Other
6,895
8,808
(1,913
)
(22
)%
Total noninterest expense
44,449
49,322
(4,873
)
(10
)%
Income (loss) from continuing operations before income taxes
19,682
(501
)
20,183
4,029
%
Income tax provision (benefit) from continuing operations
5,324
(2,278
)
7,602
334
%
Income from continuing operations
14,358
1,777
12,581
708
%
Discontinued operation:
Loss from operation of discontinued subsidiary
-
(340
)
340
100
%
Loss on sale of discontinued subsidiary
-
(1,112
)
1,112
100
%
Income tax expense
-
1,030
(1,030
)
(100
)%
Loss on discontinued operation
-
(2,482
)
2,482
100
%
Net income (loss)
$
14,358
$
(705
)
$
15,063
2,137
%
Preferred stock dividends
$
1,115
$
1,116
$
(1
)
-
%
Taxable-equivalent net interest income
$
48,791
$
54,916
$
(6,125
)
(11
)%
Per common share data:
Basic:
Income from continuing operations
$
1.17
$
0.06
$
1.11
1,850
%
Net income (loss)
$
1.17
$
(0.16
)
$
1.33
831
%
Diluted:
Income from continuing operations
$
1.17
$
0.06
$
1.11
1,850
%
Net income (loss)
$
1.17
$
(0.16
)
$
1.33
831
%
Cash dividends declared
$
0.25
$
0.32
$
(0.07
)
(22
)%
Book value
$
14.49
$
13.77
$
0.72
5
%
Common shares outstanding:
Weighted average shares – basic
11,326,482
11,292,824
Weighted average shares – diluted
11,357,678
11,325,115
Period end actual
11,347,375
11,333,318
4
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Additional Data (Dollars in thousands, except per share amounts) (Unaudited)
Nine months ended
September 30,
2006
2005
Performance ratios, annualized
Return (loss) on average assets
0.99
%
(0.04
)%
Return (loss) on average common equity
11.35
%
(1.51
)%
Common dividend payout ratio
21.37
%
>100
%
Net interest margin (tax-equivalent)
3.59
%
3.68
%
Efficiency ratio (1)
68.16
%
69.47
%
Asset quality data:
Net loan charge-offs
$
708
$
45,512
Net loan charge-offs to average loans (annualized)
0.10
%
5.28
%
(1)
Ratio excludes the operations of discontinued subsidiary.
5
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (Dollars in thousands) (Unaudited)
September 30,
December 31,
2006
2005
$ Change
% Change
ASSETS
Cash, due from banks and interest-bearing deposits
$
52,910
$
47,258
$
5,652
12
%
Federal funds sold
80,223
44,682
35,541
80
%
Investment securities (HTM and AFS)
779,703
833,448
(53,745
)
(6
)%
Loans held for sale
721
1,253
(532
)
(42
)%
Loans
941,011
992,321
(51,310
)
(5
)%
Less: Allowance for loan losses
17,681
20,231
(2,550
)
(13
)%
Loans, net
923,330
972,090
(48,760
)
(5
)%
Goodwill
37,369
37,369
—
—
%
Other assets
77,873
86,292
(8,419
)
(10
)%
Total assets
$
1,952,129
$
2,022,392
$
(70,263
)
(3
)%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Demand
$
270,671
$
284,958
$
(14,287
)
(5
)%
Savings, money market, and interest-bearing checking
714,141
755,229
(41,088
)
(5
)%
Certificates of deposit
654,807
677,074
(22,267
)
(3
)%
Total deposits
1,639,619
1,717,261
(77,642
)
(5
)%
Short-term borrowings
40,549
35,106
5,443
16
%
Long-term borrowings
54,342
63,391
(9,049
)
(14
)%
Junior subordinated debentures issued to unconsolidated
subsidiary trust
16,702
16,702
—
—
%
Other liabilities
18,919
18,175
744
4
%
Total liabilities
1,770,131
1,850,635
(80,504
)
(4
)%
Shareholders’ equity:
Preferred equity
17,623
17,634
(11
)
—
%
Common equity and accumulated other
comprehensive loss
164,375
154,123
10,252
7
%
Total shareholders’ equity
181,998
171,757
10,241
6
%
Total liabilities and shareholders’ equity
$
1,952,129
$
2,022,392
$
(70,263
)
(3
)%
6
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Consolidated Average Statements of Financial Condition (Dollars in thousands) (Unaudited)
Three months ended
September 30,
2006
2005
$ Change
% Change
ASSETS
Cash, due from banks and interest-bearing deposits
$
42,970
$
43,351
$
(381
)
(1
)%
Federal funds sold
39,299
43,395
(4,096
)
(9
)%
Commercial paper due in less than 90 days
975
—
975
—
%
Investment securities (HTM and AFS)
774,664
796,666
(22,002
)
(3
)%
Loans held for sale
495
64,822
(64,327
)
(99
)%
Loans
944,751
1,026,636
(81,885
)
(8
)%
Less: Allowance for loan losses
18,653
21,054
(2,401
)
(11
)%
Loans, net
926,098
1,005,582
(79,484
)
(8
)%
Goodwill
37,369
37,369
—
—
%
Other assets
80,272
92,047
(11,775
)
(13
)%
Total assets
$
1,902,142
$
2,083,232
$
(181,090
)
(9
)%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Demand
$
260,585
$
281,023
$
(20,438
)
(7
)%
Savings, money market, and interest-bearing checking
681,976
755,213
(73,237
)
(10
)%
Certificates of deposit
650,712
731,067
(80,355
)
(11
)%
Total deposits
1,593,273
1,767,303
(174,030
)
(10
)%
Short-term borrowings
35,552
33,348
2,204
7
%
Long-term borrowings
62,260
72,076
(9,816
)
(14
)%
Junior subordinated debentures issued to unconsolidated
subsidiary trust
16,702
16,702
—
—
%
Other liabilities
17,750
24,097
(6,347
)
(26
)%
Total liabilities
1,725,537
1,913,526
(187,989
)
(10
)%
Shareholders’ equity:
Preferred equity
17,623
17,636
(13
)
—
%
Common equity and accumulated other
comprehensive loss
158,982
152,070
6,912
5
%
Total shareholders’ equity
176,605
169,706
6,899
4
%
Total liabilities and shareholders’ equity
$
1,902,142
$
2,083,232
$
(181,090
)
(9
)%
7
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES Consolidated Average Statements of Financial Condition (Dollars in thousands) (Unaudited)
Nine months ended
September 30,
2006
2005
$ Change
% Change
ASSETS
Cash, due from banks and interest-bearing deposits
$
41,889
$
43,053
$
(1,164
)
(3
)%
Federal funds sold
26,605
34,092
(7,487
)
(22
)%
Commercial paper due in less than 90 days
8,380
—
8,380
—
%
Investment securities (HTM and AFS)
803,646
775,990
27,656
4
%
Loans held for sale
509
31,818
(31,309
)
(98
)%
Loans
959,330
1,148,716
(189,386
)
(16
)%
Less: Allowance for loan losses
19,898
31,988
(12,090
)
(38
)%
Loans, net
939,432
1,116,728
(177,296
)
(16
)%
Goodwill
37,369
37,369
—
—
%
Other assets
85,432
90,888
(5,456
)
(6
)%
Total assets
$
1,943,262
$
2,129,938
$
(186,676
)
(9
)%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Demand
$
258,147
$
274,596
$
(16,449
)
(6
)%
Savings, money market, and interest-bearing checking
716,018
788,255
(72,237
)
(9
)%
Certificates of deposit
662,661
743,690
(81,029
)
(11
)%
Total deposits
1,636,826
1,806,541
(169,715
)
(9
)%
Short-term borrowings
35,984
32,674
3,310
10
%
Long-term borrowings
62,774
76,026
(13,252
)
(17
)%
Junior subordinated debentures issued to unconsolidated
subsidiary trust
16,702
16,702
—
—
%
Other liabilities
17,366
19,361
(1,995
)
(10
)%
Total liabilities
1,769,652
1,951,304
(181,652
)
(9
)%
Shareholders’ equity:
Preferred equity
17,626
17,666
(40
)
—
%
Common equity and accumulated other
comprehensive loss
155,984
160,968
(4,984
)
(3
)%
Total shareholders’ equity
173,610
178,634
(5,024
)
(3
)%
Total liabilities and shareholders’ equity
$
1,943,262
$
2,129,938
$
(186,676
)
(9
)%
8
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