NEWS RELEASE | 220 Liberty Street Warsaw, NY 14569 |
For Additional Information: |
Ronald A. Miller |
Executive VP & CFO |
Phone: 585.786.1102 |
Email: ramiller@fiiwarsaw.com |
Financial Institutions, Inc. Announces Fourth Quarter and Year-End Results;
Reports Non-Cash OTTI Charge;
Retains “Well-Capitalized” Position
WARSAW, N.Y., January 28, 2009 — Financial Institutions, Inc. (Nasdaq: FISI) (the “Company”), the parent company of Five Star Bank, today reported a net loss of $3.1 million (or $0.33 loss per share) for the quarter ended December 31, 2008, compared to net income of $4.1 million (or $0.34 earnings per diluted share) for the 2007 fourth quarter. For the year ended December 31, 2008, the Company’s net loss totaled $26.2 million (or $2.56 loss per share), compared to net income of $16.4 million (or $1.33 diluted earnings per share) in 2007.
Highlights for the fourth quarter of 2008 include:
• | Core business operations absent the other-than-temporary impairment (“OTTI”) charge continued to improve, driven by net interest income of $17.3 million for the fourth quarter, which increased $567 thousand from the third quarter of 2008 and $2.1 million from the fourth quarter of last year. On a year-to-date basis net interest income increased to $65.3 million in 2008, a $7.3 million or 12% increase compared to 2007. The increases reflect improved net interest margin and growth of the loan portfolio. |
• | Incurred a pre-tax non-cash charge of $29.9 million during the fourth quarter and $68.2 million for the year ended December 31, 2008 for OTTI on certain investment securities. |
• | Retained a “well-capitalized” equity position with total equity capital of $190.3 million, which includes $37.5 million in preferred equity issued in December 2008 under the U.S. Treasury Department’s Capital Purchase Program. As of December, 31, 2008, the leverage capital ratio was 8.05% and total risk-based capital ratio was 13.08%. |
• | During the fourth quarter, loans increased $43.0 million to $1.121 billion at December 31, 2008 compared with $1.078 billion at September 30, 2008. Consumer indirect auto loans accounted for $27.1 million and commercial-related loans accounted for $13.9 million of the fourth quarter increase in loans. Total loans increased $156.9 million or 16% for the one year period ending December 31, 2008. Indirect auto loans increased $120.1 million or 89%, and commercial-related increased $35.5 million or 8% during that same one year period. |
• | Net interest margin increased 9 basis points, to 4.07% for the fourth quarter of 2008, compared with 3.98% for the third quarter of 2008. For the year ended December 31, 2008, net interest margin improved to 3.93%, 40 basis points higher than the comparable prior year period. The improved net interest margin resulted principally from lower funding costs and the benefits associated with a higher percentage of earning assets being deployed in higher yielding loan assets. |
• | The provision for loan losses for the fourth quarter was $2.6 million, or $1.3 million more than fourth quarter net charge offs of $1.3 million, which represented 0.46% (annualized) of average loans. For the year ended December 31, 2008, the provision for loan losses was $6.6 million and net charge offs were $3.3 million or 0.32% of average loans. The allowance for loan losses at December 31, 2008 was $18.7 million or 1.67% of total loans, as compared to 1.61% of total loans at December 31, 2007. |
Peter G. Humphrey, President and CEO of FII, commented, “Our fourth quarter results are reflective of the challenges presented by the disruption in the financial and capital markets. The other-than-temporary impairment charge reflects our recognition of the deterioration of specific securities in our investment portfolio. We are obviously disappointed in our annual results, but remain confident in the strength of our community banking franchise and our opportunities that lie ahead. Our core operations continue to perform well, driven by an expanding net interest margin, solid loan portfolio quality and effective cost controls. We are well positioned to weather this difficult period due to our core banking franchise and core earnings capacity that is built on a foundation of diversified and prudent lending, stable core deposits, and a strong capital position. The Company remains “well capitalized,” and has utilized the U.S. Treasury Department’s Capital Purchase Program as an attractive source of capital to support our marketplace opportunities.”
Included in the fourth quarter 2008 results is a pre-tax non-cash OTTI charge on certain investment securities of $29.9 million, comprised principally of pooled trust preferred securities, and to a lesser extent, privately issued whole loan collateralized mortgage obligations and charges on auction rate preferred equity securities collateralized by preferred stock of Fannie Mae and Freddie Mac. For the year ended December 31, 2008, OTTI charges totaled $68.2 million.
In the third quarter, a tax benefit recognized on the OTTI charge was based on the treatment of a substantial portion of the charge being classified as a capital loss for tax purposes, which significantly limited the tax benefit. Subsequently, on October 3, 2008, the Emergency Economic Stabilization Act was enacted, which included a provision permitting banks, under certain circumstances, to recognize losses relating to Fannie Mae and Freddie Mac preferred stock as an ordinary loss, therefore the fourth quarter results reflect the recognition of a $12.0 million tax benefit associated with the third quarter OTTI charge.
Net Interest Income
Net interest income was $17.3 million for the fourth quarter of 2008, up $567 thousand or 3% from the third quarter of 2008 and $2.1 million or 14% compared with the fourth quarter of 2007. Net interest margin improved to 4.07% in the fourth quarter of 2008, compared with 3.98% in the third quarter of 2008 and 3.75% in the fourth quarter of 2007. For the year ended 2008, net interest income was $65.3 million, compared with $58.1 million for the same period in 2007. Net interest margin improved to 3.93% versus 3.53% on a year to date comparative basis. The improved net interest income and net interest margin resulted principally from lower funding costs and the benefits associated with a higher percentage of earning assets being deployed in higher yielding loan assets.
Noninterest Income (Loss)
Noninterest income (loss) for the fourth quarter of 2008 was $(25.1) million, compared with $(29.3) million and $5.0 million in the third quarter of 2008 and the fourth quarter of 2007, respectively. For the year ended December 31, 2008, noninterest income (loss) was $(48.8) million, compared with $20.7 million for the same period in 2007. The 2008 periods reflect OTTI charges on investment securities totaling $29.9million for the fourth quarter and $68.2 million for the year ended December 31, 2008. Absent the OTTI charges in 2008, noninterest income would have been $4.8 million in the fourth quarter versus $5.2 million in the third quarter of 2008 and $5.0 million in the fourth quarter of 2007. The decrease, exclusive of OTTI charges, is primarily the result of lower service charges on deposits and broker-dealer fees and commissions offset by higher income from company owned life insurance due to a $20.0 million purchase of company owned life insurance made during the third quarter of 2008. For the full year 2008 noninterest income exclusive of OTTI charges was $19.4 million, compared with $20.7 million for full year 2007. The decrease is attributable to lower service charges on deposit accounts and 2007 including proceeds from corporate owned life insurance.
Noninterest Expense
Noninterest expense for the fourth quarter of 2008 was $15.4 million, compared with $14.5 million in the fourth quarter of 2007, respectively. The fourth quarter of 2008 results include a $557 thousand prepayment charge on the early repayment of borrowed funds and also a $259 thousand increase in FDIC insurance expense compared with the fourth quarter of last year. For the year ended December 31, 2008, noninterest expense was $57.5 million compared with $57.4 million for the same period in 2007. Total salaries and benefits cost declined $1.7 million for the full year 2008 compared with 2007, and was offset by a $599 thousand increase in occupancy and equipment expense, a $385 thousand increase in FDIC insurance cost, and the $557 thousand prepayment charge on borrowed finds.
Balance Sheet
Total assets at December 31, 2008 were $1.917 billion, up $59.0 million from $1.858 billion at December 31, 2007. Total loans were $1.121 billion at December 31, 2008, an increase of $156.9 million from $964.2 million at December 31, 2007, principally from a $120.1 million increase in indirect auto loans. Total deposits increased $57.3 million to $1.633 billion at December 31, 2008, versus $1.576 billion at December 31, 2007. Total borrowings, including junior subordinated debentures, increased $2.6 million to $70.8 million at December 31, 2008, up from $68.2 million at December 31, 2007. Total shareholders’ equity at December 31, 2008 was $190.3 million, compared with $195.3 million at December 31, 2007. The Company’s leverage ratio was 8.05% and total risk-based capital ratio was 13.08% at December 31, 2008, which is within the regulatory standard to be deemed a well-capitalized institution.
Asset Quality
The Company recorded a provision for loan losses of $2.6 million for the fourth quarter of 2008, compared with $351 thousand in the fourth quarter of 2007. The increase in the provision for loan losses is primarily due to growth in the loan portfolio and the changing mix of the loan portfolio together with higher net charge offs. Net charge offs of $1.3 million for the fourth quarter of 2008 represented 46 basis points (annualized) of average loans. For the year ended December 31, 2008, net charge-offs were $3.3 million, or 32 basis points of average loans, compared with $1.6 million, or 18 basis points of average loans, for the year ended December 31, 2007. The increase in net charge-offs in 2008 related principally to the commercial mortgage and consumer indirect loan portfolios.
The allowance for loan losses was $18.7 million at December 31, 2008, compared with $15.5 million at December 31, 2007. Non-performing loans were $8.2 million at December 31, 2008, compared with $7.6 million and $8.1 million at September 30, 2008 and December 31, 2007, respectively. The ratio of allowance for loan losses to non-performing loans improved to 229% at December 31, 2008 versus 192% at December 31, 2007.
About Financial Institutions, Inc.
With $1.9 billion in assets, Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank and Five Star Investment Services, Inc. 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 70 ATMs in Western and Central New York State. Five Star Investment Services provides brokerage and insurance products and services within the same New York State markets. The consolidated entity includes approximately 670 employees. The Company’s stock is listed on the Nasdaq Global Select Market under the symbol FISI. Additional information is available at the Company’s website:www.fiiwarsaw.com.
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, the attitudes and preferences of its customers, the competitive environment, fluctuations in the fair value of securities in the investment portfolio, and general economic and credit market conditions nationally and regionally. The Company undertakes no obligation to revise these statements following the date of this press release.
*****
FINANCIAL INSTITUTIONS, INC.
Summary of Quarterly Financial Data (Unaudited)
2008 | 2007 | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||
Cash and cash equivalents | $ | 55,187 | 76,704 | 63,049 | 102,999 | 46,673 | ||||||||||||||
Investment securities: | ||||||||||||||||||||
Available for sale | 547,506 | 607,357 | 669,752 | 688,504 | 695,241 | |||||||||||||||
Held-to-maturity | 58,532 | 64,434 | 56,508 | 57,631 | 59,479 | |||||||||||||||
Total investment securities | 606,038 | 671,791 | 726,260 | 746,135 | 754,720 | |||||||||||||||
Loans held for sale | 1,013 | 1,008 | 926 | 1,099 | 906 | |||||||||||||||
Loans: | ||||||||||||||||||||
Commercial | 158,543 | 156,809 | 140,745 | 144,976 | 136,780 | |||||||||||||||
Commercial real estate | 262,234 | 248,267 | 250,872 | 245,148 | 245,797 | |||||||||||||||
Agriculture | 44,706 | 46,490 | 45,231 | 44,162 | 47,367 | |||||||||||||||
Residential real estate | 177,683 | 173,893 | 172,396 | 168,738 | 166,863 | |||||||||||||||
Consumer indirect | 255,054 | 227,971 | 177,967 | 142,565 | 134,977 | |||||||||||||||
Consumer direct and home equity | 222,859 | 224,693 | 223,538 | 226,855 | 232,389 | |||||||||||||||
Total loans | 1,121,079 | 1,078,123 | 1,010,749 | 972,444 | 964,173 | |||||||||||||||
Allowance for loan losses | 18,749 | 17,420 | 16,038 | 15,549 | 15,521 | |||||||||||||||
Total loans, net | 1,102,330 | 1,060,703 | 994,711 | 956,895 | 948,652 | |||||||||||||||
Total assets | 1,916,919 | 1,945,819 | 1,895,448 | 1,912,652 | 1,857,876 | |||||||||||||||
Total interest-earning assets | 1,743,141 | 1,789,499 | 1,749,808 | 1,771,676 | 1,722,122 | |||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing demand | 292,586 | 293,027 | 288,258 | 268,419 | 286,362 | |||||||||||||||
Interest-bearing demand | 344,616 | 376,098 | 338,290 | 356,758 | 335,314 | |||||||||||||||
Savings and money market | 348,594 | 383,456 | 372,317 | 380,167 | 346,639 | |||||||||||||||
Certificates of deposit | 647,467 | 607,833 | 596,890 | 622,628 | 607,656 | |||||||||||||||
Total deposits | 1,633,263 | 1,660,414 | 1,595,755 | 1,627,972 | 1,575,971 | |||||||||||||||
Borrowings | 70,820 | 114,684 | 89,465 | 70,336 | 68,210 | |||||||||||||||
Total interest-bearing liabilities | 1,411,497 | 1,482,071 | 1,396,962 | 1,429,889 | 1,357,819 | |||||||||||||||
Net interest-earning assets | 331,644 | 307,428 | 352,846 | 341,787 | 364,303 | |||||||||||||||
Shareholders’ equity | 190,300 | 152,770 | 188,998 | 197,364 | 195,322 | |||||||||||||||
Common shareholders’ equity (1) | 137,226 | 135,195 | 171,417 | 179,783 | 177,741 | |||||||||||||||
Tangible common shareholders’ equity (2) | 99,577 | 97,468 | 133,614 | 141,903 | 139,786 | |||||||||||||||
Securities available for sale – fair value adjustment | ||||||||||||||||||||
included in shareholders’ equity, net of tax | $ | 3,463 | (9,797 | ) | (5,803 | ) | 944 | (500 | ) | |||||||||||
Common shares outstanding | 10,798 | 10,806 | 10,913 | 10,992 | 11,011 | |||||||||||||||
Treasury shares | 550 | 542 | 435 | 356 | 337 | |||||||||||||||
CAPITAL RATIOS | ||||||||||||||||||||
Leverage ratio | 8.05 | % | 7.37 | 9.17 | 9.38 | 9.35 | ||||||||||||||
Tier 1 risk-based capital | 11.83 | % | 11.10 | 14.58 | 15.34 | 15.74 | ||||||||||||||
Total risk based capital | 13.08 | % | 12.35 | 15.83 | 16.59 | 16.99 | ||||||||||||||
Common equity to assets | 7.16 | % | 6.95 | 9.04 | 9.40 | 9.57 | ||||||||||||||
Tangible common equity to tangible assets (2) | 5.30 | % | 5.11 | 7.19 | 7.57 | 7.68 | ||||||||||||||
Common book value per share | $ | 12.71 | 12.51 | 15.71 | 16.36 | 16.14 | ||||||||||||||
Tangible common book value per share (2) | $ | 9.22 | 9.02 | 12.24 | 12.91 | 12.69 |
1
FINANCIAL INSTITUTIONS, INC.
Summary of Quarterly Financial Data (Unaudited)
Quarterly Trends | ||||||||||||||||||||||||||||||||
Years ended | 2008 | 2007 | ||||||||||||||||||||||||||||||
December 31, | Fourth | Third | Second | First | Fourth | |||||||||||||||||||||||||||
2008 | 2007 | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA | ||||||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||||||
Interest income | $ | 98,948 | 105,212 | 24,582 | 24,558 | 24,536 | 25,272 | 26,397 | ||||||||||||||||||||||||
Interest expense | 33,617 | 47,139 | 7,269 | 7,812 | 8,349 | 10,187 | 11,192 | |||||||||||||||||||||||||
Net interest income | 65,331 | 58,073 | 17,313 | 16,746 | 16,187 | 15,085 | 15,205 | |||||||||||||||||||||||||
Provision for loan losses | 6,551 | 116 | 2,586 | 1,891 | 1,358 | 716 | 351 | |||||||||||||||||||||||||
Net interest income after provision | ||||||||||||||||||||||||||||||||
for loan losses | 58,780 | 57,957 | 14,727 | 14,855 | 14,829 | 14,369 | 14,854 | |||||||||||||||||||||||||
Noninterest income (loss): | ||||||||||||||||||||||||||||||||
Service charges on deposits | 10,497 | 10,932 | 2,685 | 2,794 | 2,518 | 2,500 | 2,818 | |||||||||||||||||||||||||
ATM and debit card | 3,313 | 2,883 | 853 | 852 | 856 | 752 | 805 | |||||||||||||||||||||||||
Broker-dealer fees and commissions | 1,458 | 1,396 | 235 | 363 | 401 | 459 | 343 | |||||||||||||||||||||||||
Loan servicing | 664 | 928 | 134 | 112 | 232 | 186 | 221 | |||||||||||||||||||||||||
Company owned life insurance | 563 | 1,255 | 294 | 223 | 27 | 19 | 116 | |||||||||||||||||||||||||
Net gain on sale of loans held for sale | 339 | 779 | 35 | 48 | 92 | 164 | 190 | |||||||||||||||||||||||||
Net gain (loss) on sale of other assets | 305 | 102 | 51 | 102 | 115 | 37 | (58 | ) | ||||||||||||||||||||||||
Net gain on investment securities | 288 | 207 | 56 | 12 | 47 | 173 | 88 | |||||||||||||||||||||||||
Impairment charge on investment securities | (68,215) | - | (29,870 | ) | (34,554 | ) | (3,791 | ) | - | - | ||||||||||||||||||||||
Other | 2,010 | 2,198 | 421 | 700 | 435 | 454 | 479 | |||||||||||||||||||||||||
Total noninterest income (loss) | (48,778) | 20,680 | (25,106 | ) | (29,348 | ) | 932 | 4,744 | 5,002 | |||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | 31,437 | 33,175 | 7,811 | 7,021 | 8,169 | 8,436 | 8,240 | |||||||||||||||||||||||||
Occupancy and equipment | 10,502 | 9,903 | 2,713 | 2,642 | 2,567 | 2,580 | 2,582 | |||||||||||||||||||||||||
Computer and data processing | 2,433 | 2,126 | 669 | 603 | 580 | 581 | 533 | |||||||||||||||||||||||||
Professional services | 2,141 | 2,080 | 637 | 467 | 480 | 557 | 533 | |||||||||||||||||||||||||
Supplies and postage | 1,800 | 1,662 | 447 | 475 | 437 | 441 | 379 | |||||||||||||||||||||||||
Advertising and promotions | 1,453 | 1,402 | 548 | 472 | 283 | 150 | 396 | |||||||||||||||||||||||||
Other | 7,695 | 7,080 | 2,569 | 1,729 | 1,869 | 1,528 | 1,880 | |||||||||||||||||||||||||
Total noninterest expense | 57,461 | 57,428 | 15,394 | 13,409 | 14,385 | 14,273 | 14,543 | |||||||||||||||||||||||||
(Loss) income before income taxes | (47,459) | 21,209 | (25,773 | ) | (27,902 | ) | 1,376 | 4,840 | 5,313 | |||||||||||||||||||||||
Income tax expense (benefit) | (21,301) | 4,800 | (22,631 | ) | 524 | (255 | ) | 1,061 | 1,215 | |||||||||||||||||||||||
Net (loss) income | $(26,158) | 16,409 | (3,142 | ) | (28,426 | ) | 1,631 | 3,779 | 4,098 | |||||||||||||||||||||||
Preferred stock dividends | 1,538 | 1,483 | 426 | 371 | 370 | 371 | 370 | |||||||||||||||||||||||||
Net (loss) income applicable to | ||||||||||||||||||||||||||||||||
common shareholders | $(27,696) | 14,926 | (3,568 | ) | (28,797 | ) | 1,261 | 3,408 | 3,728 | |||||||||||||||||||||||
STOCK AND RELATED PER SHARE DATA | ||||||||||||||||||||||||||||||||
Net (loss) income per share – basic | $(2.56) | 1.34 | (0.33 | ) | (2.68 | ) | 0.12 | 0.31 | 0.34 | |||||||||||||||||||||||
Net (loss) income per share – diluted | $(2.56) | 1.33 | (0.33 | ) | (2.68 | ) | 0.12 | 0.31 | 0.34 | |||||||||||||||||||||||
Cash dividends declared | $ | 0.54 | 0.46 | 0.10 | 0.15 | 0.15 | 0.14 | 0.13 | ||||||||||||||||||||||||
Common dividend payout ratio (3) | NA% | 34.33 | NA | NA | 125.00 | 45.16 | 38.24 | |||||||||||||||||||||||||
Dividend yield (annualized) | 3.76 | % | 2.58 | 2.77 | 2.98 | 3.76 | 2.97 | 2.89 | ||||||||||||||||||||||||
Stock price (Nasdaq: FISI): | ||||||||||||||||||||||||||||||||
High | $ | 22.50 | 23.71 | 20.27 | 22.50 | 20.00 | 20.78 | 19.80 | ||||||||||||||||||||||||
Low | $ | 10.06 | 16.18 | 10.06 | 14.82 | 15.25 | 15.10 | 16.42 | ||||||||||||||||||||||||
Close | $ | 14.35 | 17.82 | 14.35 | 20.01 | 16.06 | 18.95 | 17.82 |
2
FINANCIAL INSTITUTIONS, INC.
Summary of Quarterly Financial Data (Unaudited)
Quarterly Trends | ||||||||||||||||||||||||||||
Years ended | 2008 | 2007 | ||||||||||||||||||||||||||
December 31, | Fourth | Third | Second | First | Fourth | |||||||||||||||||||||||
2008 | 2007 | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||
SELECTED AVERAGE BALANCES | ||||||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||
Investment securities (4) | $ | 721,551 | 811,118 | 666,917 | 721,419 | 744,648 | 753,823 | 786,343 | ||||||||||||||||||||
Loans (5): | ||||||||||||||||||||||||||||
Commercial | 149,927 | 119,823 | 158,517 | 150,373 | 150,380 | 140,340 | 129,438 | |||||||||||||||||||||
Commercial real estate | 247,475 | 244,357 | 253,179 | 246,746 | 244,688 | 245,232 | 242,336 | |||||||||||||||||||||
Agriculture | 45,035 | 53,356 | 44,299 | 45,965 | 44,504 | 45,373 | 50,448 | |||||||||||||||||||||
Residential real estate | 171,262 | 165,226 | 175,200 | 173,175 | 169,925 | 166,682 | 167,551 | |||||||||||||||||||||
Consumer indirect | 185,197 | 118,152 | 244,891 | 200,586 | 156,728 | 137,756 | 132,372 | |||||||||||||||||||||
Consumer direct and home equity | 224,343 | 236,910 | 222,235 | 222,241 | 223,906 | 229,035 | 232,228 | |||||||||||||||||||||
Total loans | 1,023,239 | 937,824 | 1,098,321 | 1,039,086 | 990,131 | 964,418 | 954,373 | |||||||||||||||||||||
Total interest-earning assets | 1,772,179 | 1,781,468 | 1,782,938 | 1,774,201 | 1,771,801 | 1,759,635 | 1,756,169 | |||||||||||||||||||||
Total assets | 1,905,345 | 1,907,037 | 1,924,174 | 1,908,577 | 1,897,514 | 1,890,874 | 1,884,712 | |||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Interest-bearing demand | 347,702 | 338,326 | 360,970 | 342,188 | 342,463 | 345,102 | 337,179 | |||||||||||||||||||||
Savings and money market | 369,926 | 346,131 | 373,034 | 366,449 | 378,799 | 361,425 | 358,198 | |||||||||||||||||||||
Certificates of deposit | 617,381 | 672,239 | 629,111 | 591,025 | 615,950 | 633,599 | 635,825 | |||||||||||||||||||||
Borrowings | 91,715 | 80,609 | 105,164 | 118,023 | 73,902 | 69,335 | 71,092 | |||||||||||||||||||||
Total interest-bearing liabilities | 1,426,724 | 1,437,305 | 1,468,279 | 1,417,685 | 1,411,114 | 1,409,461 | 1,402,294 | |||||||||||||||||||||
Noninterest-bearing demand deposits | 280,467 | 266,239 | 284,643 | 294,136 | 275,570 | 267,322 | 276,535 | |||||||||||||||||||||
Total deposits | 1,615,476 | 1,622,935 | 1,647,758 | 1,593,798 | 1,612,782 | 1,607,448 | 1,607,737 | |||||||||||||||||||||
Total liabilities | 1,722,440 | 1,721,510 | 1,766,239 | 1,727,473 | 1,702,211 | 1,693,300 | 1,694,297 | |||||||||||||||||||||
Net earning assets | 345,455 | 344,163 | 314,659 | 356,516 | 360,687 | 350,174 | 353,875 | |||||||||||||||||||||
Shareholders’ equity | 182,905 | 185,527 | 157,935 | 181,104 | 195,303 | 197,574 | 190,415 | |||||||||||||||||||||
Common equity (1) | 164,454 | 167,935 | 136,887 | 163,527 | 177,722 | 179,993 | 172,834 | |||||||||||||||||||||
Tangible common equity (2) | $ | 126,643 | 129,818 | 99,191 | 125,754 | 139,872 | 142,067 | 134,832 | ||||||||||||||||||||
Common shares outstanding: | ||||||||||||||||||||||||||||
Basic | 10,818 | 11,154 | 10,717 | 10,738 | 10,879 | 10,938 | 11,022 | |||||||||||||||||||||
Diluted | 10,818 | 11,184 | 10,717 | 10,738 | 10,928 | 10,975 | 11,043 | |||||||||||||||||||||
SELECTED AVERAGE YIELDS/ | ||||||||||||||||||||||||||||
RATES AND RATIOS | ||||||||||||||||||||||||||||
(Tax equivalent basis) | ||||||||||||||||||||||||||||
Investment securities | 4.84 | % | 4.90 | 4.72 | 4.66 | 4.92 | 5.05 | 5.13 | ||||||||||||||||||||
Loans | 6.61 | % | 7.30 | 6.35 | 6.52 | 6.65 | 6.97 | 7.25 | ||||||||||||||||||||
Total interest-earning assets | 5.83 | % | 6.17 | 5.69 | 5.73 | 5.83 | 6.05 | 6.28 | ||||||||||||||||||||
Interest-bearing demand | 0.93 | % | 1.70 | 0.69 | 0.86 | 0.89 | 1.30 | 1.61 | ||||||||||||||||||||
Savings and money market | 1.02 | % | 1.69 | 0.68 | 0.93 | 1.02 | 1.47 | 1.70 | ||||||||||||||||||||
Certificates of deposit | 3.62 | % | 4.63 | 3.09 | 3.33 | 3.72 | 4.31 | 4.54 | ||||||||||||||||||||
Borrowings | 4.65 | % | 5.49 | 4.23 | 4.30 | 5.05 | 5.51 | 5.63 | ||||||||||||||||||||
Total interest-bearing liabilities | 2.36 | % | 3.28 | 1.97 | 2.19 | 2.38 | 2.91 | 3.17 | ||||||||||||||||||||
Net interest rate spread | 3.47 | % | 2.89 | 3.72 | 3.54 | 3.45 | 3.14 | 3.11 | ||||||||||||||||||||
Net interest rate margin | 3.93 | % | 3.53 | 4.07 | 3.98 | 3.94 | 3.73 | 3.75 | ||||||||||||||||||||
Net (loss) income (annualized returns on): | ||||||||||||||||||||||||||||
Average assets | -1.37 | % | 0.86 | -0.65 | -5.93 | 0.35 | 0.80 | 0.86 | ||||||||||||||||||||
Average equity | -14.30 | % | 8.84 | -7.91 | -62.44 | 3.36 | 7.69 | 8.54 | ||||||||||||||||||||
Average common equity (6) | -16.84 | % | 8.89 | -10.37 | -70.06 | 2.85 | 7.62 | 8.56 | ||||||||||||||||||||
Average tangible common equity (7) | -21.87 | % | 11.50 | -14.31 | -91.10 | 3.63 | 9.65 | 10.97 | ||||||||||||||||||||
Efficiency ratio (8) | 64.07 | % | 71.57 | 66.65 | 58.10 | 64.21 | 67.64 | 66.84 | ||||||||||||||||||||
Equity to assets | 9.60 | % | 9.73 | 8.21 | 9.49 | 10.29 | 10.45 | 10.10 | ||||||||||||||||||||
Common equity to assets (6) | 8.63 | % | 8.81 | 7.11 | 8.57 | 9.37 | 9.52 | 9.17 | ||||||||||||||||||||
Tangible common equity to tangible assets (7) | 6.78 | % | 6.95 | 5.26 | 6.72 | 7.52 | 7.67 | 7.30 |
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FINANCIAL INSTITUTIONS, INC.
Summary of Quarterly Financial Data (Unaudited)
Quarterly Trends | ||||||||||||||||||||||||||||
Years ended | 2008 | 2007 | ||||||||||||||||||||||||||
December 31, | Fourth | Third | Second | First | Fourth | |||||||||||||||||||||||
2008 | 2007 | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||
ASSET QUALITY DATA | ||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||
Nonaccrual loans | $ | 8,189 | 8,075 | 8,189 | 7,609 | 6,254 | 7,353 | 8,075 | ||||||||||||||||||||
Accruing loans past due 90 days or more | 7 | 2 | 7 | 32 | 1 | 2 | 2 | |||||||||||||||||||||
Total non-performing loans | 8,196 | 8,077 | 8,196 | 7,641 | 6,255 | 7,355 | 8,077 | |||||||||||||||||||||
Foreclosed assets | 1,007 | 1,421 | 1,007 | 1,009 | 1,235 | 1,257 | 1,421 | |||||||||||||||||||||
Non-performing investment securities | 49 | — | 49 | — | — | — | — | |||||||||||||||||||||
Total non-performing assets | 9,252 | 9,498 | 9,252 | 8,650 | 7,490 | 8,612 | 9,498 | |||||||||||||||||||||
Net loan charge-offs | $ | 3,323 | 1,643 | 1,257 | 509 | 869 | 687 | 441 | ||||||||||||||||||||
Net charge-offs to average loans (annualized) | 0.32 | % | 0.18 | 0.46 | 0.20 | 0.35 | 0.29 | 0.18 | ||||||||||||||||||||
Total non-performing loans to total loans | 0.73 | % | 0.84 | 0.73 | 0.71 | 0.62 | 0.76 | 0.84 | ||||||||||||||||||||
Total non-performing assets to total assets | 0.48 | % | 0.51 | 0.48 | 0.44 | 0.40 | 0.45 | 0.51 | ||||||||||||||||||||
Allowance for loan losses to total loans | 1.67 | % | 1.61 | 1.67 | 1.62 | 1.59 | 1.60 | 1.61 | ||||||||||||||||||||
Allowance for loan losses to | ||||||||||||||||||||||||||||
non-performing loans | 229 | % | 192 | 229 | 228 | 256 | 211 | 192 |
(1) Excludes preferred shareholders’ equity. |
(2) Excludes preferred shareholders’ equity, goodwill and other intangible assets. |
(3) Common dividend payout ratio equals dividends declared during the period divided by earnings per share for the equivalent period. There is no ratio shown for periods where the Company both declares a dividend and incurs a loss during the period because the ratio would result in a negative payout since the dividend declared (paid out) will always be greater than 100% of earnings. |
(4) Average investment securities shown at amortized cost. |
(5) Includes nonaccrual loans. |
(6) Net income available to common shareholders divided by average common equity. |
(7) Net income available to common shareholders divided by average tangible equity. |
(8) 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 and impairment charges on investment securities, proceeds from company owned life insurance included in income and net gain on sale of trust relationships. |
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