FINANCIAL INSTITUTIONS, INC. REPORTS THIRD QUARTER 2014 NET INCOME OF $7.2 MILLION
WARSAW, N.Y., October 22, 2014– Financial Institutions, Inc. (the “Company”) (Nasdaq: FISI), the parent company of Five Star Bank, today reported net income for the third quarter ended September 30, 2014 of $7.2 million, compared with $7.0 million for the second quarter of 2014 and $6.2 million for the third quarter of 2013. After preferred dividends, third quarter earnings per diluted common share was $0.49, compared with $0.48 per share for the second quarter of 2014 and $0.42 per share for the third quarter of 2013.
“We are pleased to have delivered strong earnings growth in the third quarter, which reflects the impact of our strategic operating priorities,” said Martin K. Birmingham, the Company’s President and Chief Executive Officer. “Even more encouraging is that our improved profitability was achieved amid a challenging revenue growth environment. Our operating priorities center on maintaining a disciplined approach to meeting the financial needs of the communities we serve while bolstering our financial performance measures. In the third quarter, our efforts produced solid balance sheet growth, an improvement in our credit quality and resulted in an 11% increase in year-to-date earnings compared to the first three quarters of 2013.”
“We remain intensely focused on performance, continued enhancements to our business model and on developing talent at all levels of the organization so that we can be the leading community bank in the markets we serve,” added Birmingham. “Our people are critical to our success. I want to once again thank the expanding Five Star team, which includes our newest members from the recently acquired Scott Danahy Naylon insurance agency, for their commitment to delivering excellence to our customers and shareholders.”
Highlights:
•
Completed the acquisition of Scott Danahy Naylon Co., Inc. (“SDN”), a full service insurance agency
•
Initiated the implementation of a Company-wide Enterprise Risk Management model
•
Quarterly net income was $7.2 million, up 2% from last quarter and 17% from the third quarter of 2013
•
Noninterest income increased to $7.3 million for the third quarter of 2014, up 10% from last quarter and 18% from the third quarter of 2013
•
Average loans increased by $144.3 million or 8% from the third quarter of 2013 and $26.6 million or 1% from the second quarter of 2014, as total loans at September 30, 2014 reached record levels
•
Non-performing assets decreased 8% from the second quarter of 2014
•
Shareholders’ equity and common book value per share reached record levels at the end of the third quarter
•
Quarterly cash dividend of $0.19 per common share represents a 3.35% dividend yield as of September 30, 2014 and a return of 39% of third quarter net income to common shareholders
•
Strong quarterly return on average common equity of 10.55% and return on average tangible common equity of 13.73%
During the third quarter of 2014, the Company completed the acquisition of SDN, located in a suburb of Buffalo, New York, that provides a broad range of insurance services to both personal and business clients. SDN now operates as a subsidiary of Financial Institutions, Inc. and an affiliate of Five Star Bank. Also during the quarter, the Company continued the implementation of an enterprise risk management structure. This structure is intended to build upon the Company’s already strong risk culture and led to the appointment of a new, highly experienced chief risk officer. The structure will more closely integrate the Company’s growth strategies, including organic expansion and acquisitions, with its risk management and governance processes.
“Acquiring SDN represents an important building block in accordance with our strategic growth plans, which call for increased penetration of the Rochester and Buffalo markets and the diversification of our revenue base by expanding fee-based services,” said Kevin B. Klotzbach, the Company’s Executive Vice President and Chief Financial Officer. “The SDN platform provides subsequent opportunities to bolt on independent agencies in the future.”
Net Interest Income and Net Interest Margin
Net interest income totaled $23.3 million in the third quarter of 2014, up from $23.1 million in the second quarter of 2014 and $22.8 million in the third quarter of 2013. Average earning assets were up $4.8 million compared to the second quarter of 2014 and $176.7 million compared to the third quarter of 2013. The increase from the prior year period included increases of $144.3 million and $32.5 million in loans and investment securities, respectively. Third quarter 2014 net interest margin was 3.46%, down from 3.47% in the second quarter of 2014 and 3.62% in the third quarter of 2013.
Noninterest Income and Expense
Noninterest income totaled $7.3 million in the third quarter of 2014, compared to $6.6 million in the second quarter of 2014 and $6.2 million in the third quarter of 2013. Included in the 2014 totals are gains realized from the sale of investment securities. Exclusive of those gains, noninterest income was $6.7 million in the recently completed quarter and $5.6 million in the second quarter of 2014. The higher noninterest income generated in the most recent quarter is primarily a result of insurance income, of which $670 thousand was generated by SDN.
Noninterest expense in the third quarter of 2014 totaled $18.0 million, compared with $17.8 million in the second quarter of 2014 and $17.0 million in the third quarter of 2013. The increases in noninterest expense were largely due to higher salaries and benefits expense associated with the acquisition of SDN and the hiring of additional loan officers and related personnel as part of the Company’s expansion initiatives.
Income Taxes
Income tax expense was $3.4 million in the third quarter of 2014, compared to $3.1 million in the second quarter of 2014 and $3.0 million in the third quarter of 2013. The effective tax rate was 31.9% for the third quarter of 2014, 30.5% for the second quarter of 2014 and 33.0% for the third quarter of 2013. In general, the lower effective tax rate in 2014 reflects New York State tax savings generated by the Company’s real estate investment trust, which became effective during February 2014. However, the Company’s effective tax rate in the third quarter of 2014 was higher than the second quarter due to non-deductible one-time expenses associated with the acquisition of SDN.
Balance Sheet and Capital Management
Total assets were $3.06 billion at September 30, 2014, up $62.0 million from $2.99 billion at June 30, 2014 and $187.8 million from $2.87 billion at September 30, 2013. The increase from the prior year was driven by loan growth and higher investment security balances.
Total loans were $1.91 billion at September 30, 2014, up from $1.90 billion at June 30, 2014 and $1.78 billion at September 30, 2013. The increase in loans from the prior year was attributable to organic growth, primarily in commercial, home equity and consumer indirect loans. Total investment securities were $871.4 million at September 30, 2014, up $7.5 million compared with June 30, 2014 and up $42.2 million from September 30, 2013.
Total deposits were $2.54 billion at September 30, 2014, up $88.7 million from $2.45 billion at June 30, 2014 and $124.6 million from $2.41 billion at September 30, 2013. The increase during the third quarter of 2014 was mainly due to seasonal inflows of municipal deposits, while the year-over-year increase was primarily due to successful business development efforts. Public deposit balances represented 28% of total deposits at September 30, 2014, compared to 25% at June 30, 2014 and September 30, 2013.
Short-term borrowings were $216.0 million at September 30, 2014, down $38.7 million from June 30, 2014 and up $27.8 million from September 30, 2013, respectively. Short-term borrowings are utilized to offset seasonal outflows of municipal deposits.
Shareholders’ equity and common book value per share reached record levels at the end of the third quarter 2014. Shareholders’ equity was $277.8 million at September 30, 2014, compared with $269.8 million at June 30, 2014 and $247.8 million at September 30, 2013. Common book value per share was $18.48 at September 30, 2014, an increase of $0.27 from $18.21 at June 30, 2014 and $1.79 from $16.69 at September 30, 2013. Tangible common book value per share was $13.59 at September 30, 2014, a decrease of 7% from $14.62 at June 30, 2014 and an increase of 4% from $13.06 at September 30, 2013.
During the third quarter of 2014, the Company declared a common stock dividend of $0.19 per common share, consistent with the prior quarter and the third quarter of 2013. The third quarter 2014 dividend returned 39% of the quarter’s net income to common shareholders.
The Company’s leverage ratio was 7.34% at September 30, 2014, compared to 7.64% and 7.68% at June 30, 2014 and September 30, 2013, respectively. Goodwill and intangible assets recorded in conjunction with the SDN acquisition resulted in lower capital ratios. Such goodwill and intangible assets are excluded from regulatory capital under regulatory accounting practices.
Credit Quality
Overall credit quality improved during the third quarter of 2014. Non-performing assets at September 30, 2014 declined $752 thousand compared with June 30, 2014, driven by a decrease in non-performing loans. Commercial non-performing loans declined $605 thousand, residential mortgage non-performing loans declined $102 thousand and consumer indirect non-performing loans decreased $127 thousand.During the second quarter of 2014 the last of the remaining non-performing pooled trust preferred investment securities was sold. These securities had been transferred to non-performing status in years prior to 2010 and included in non-performing assets at fair value. Nonperforming assets to total assets were 0.28% at September 30, 2014 compared with 0.32% at June 30, 2014 and 0.38% at September 30, 2013.
The provision for loans losses for the third quarter of 2014 increased $257 thousand compared with the second quarter of 2014 and decreased $755 thousand compared to the third quarter of 2013. Net charge-offs of $1.9 million in the third quarter of 2014 represented 0.40% of average loans on an annualized basis compared to $1.7 million or 0.37% of average loans in the second quarter of 2014 and $1.7 million or 0.38% of average loans in the third quarter of 2013.
The allowance for loans losses to total loans was 1.43% at September 30, 2014, which was unchanged from June 30, 2014 and lower as compared with 1.50% at September 30, 2013. The allowance to non-performing loans was 333% at September 30, 2014 compared with 306% at June 30, 2014, and 258% at September 30, 2013. The higher allowance to non-performing loans ratio at September 30, 2014 was driven by a reduction in non-performing loans.
Mr. Birmingham added, “Although we are already performing at a high level with respect to asset quality metrics, as evidenced by peer comparisons, the quality of our loan portfolio showed additional improvement. This reflects the disciplined credit underwriting and origination processes of our organization and the high quality of our customers.”
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 over 625 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 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 comparison to others in the financial services industry. 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 onForm 10-K and its Quarterly Reports onForm 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.
*****
For additional information contact:
Kevin B. Klotzbach
Chief Financial Officer & Treasurer
Phone: 585.786.1130
Email: KBKlotzbach@five-starbank.com
1
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts)
2014
2013
September 30,
June 30,
March 31,
December 31,
September 30,
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents
$
87,582
64,832
72,401
59,692
99,384
Investment securities:
Available for sale
585,479
601,903
674,650
609,400
583,551
Held-to-maturity
285,967
262,057
253,576
249,785
245,708
Total investment securities
871,446
863,960
928,226
859,185
829,259
Loans held for sale
1,029
201
900
3,381
2,810
Loans:
Commercial business
275,107
277,685
268,352
265,766
253,925
Commercial mortgage
469,485
469,055
468,763
469,284
449,565
Residential mortgage
103,044
106,206
110,164
113,045
117,624
Home equity
382,703
369,578
332,348
326,086
316,626
Consumer indirect
656,215
652,748
647,546
636,368
618,088
Other consumer
21,291
21,392
21,667
23,070
23,844
Total loans
1,907,845
1,896,664
1,848,840
1,833,619
1,779,672
Allowance for loan losses
27,244
27,166
27,152
26,736
26,685
Total loans, net
1,880,601
1,869,498
1,821,688
1,806,883
1,752,987
Total interest-earning assets (1)(2)
2,780,940
2,758,779
2,780,489
2,705,045
2,613,746
Goodwill and other intangible assets, net
68,887
49,826
49,913
50,002
50,095
Total assets
3,055,304
2,993,264
3,015,619
2,928,636
2,867,517
Deposits:
Noninterest-bearing demand
571,549
551,229
532,914
535,472
542,517
Interest-bearing demand
530,783
507,083
541,660
470,733
519,283
Savings and money market
805,522
766,594
812,734
717,928
757,454
Certificates of deposit
630,970
625,172
646,112
595,923
594,931
Total deposits
2,538,824
2,450,078
2,533,420
2,320,056
2,414,185
Borrowings
215,967
254,683
196,746
��
337,042
188,146
Total interest-bearing liabilities
2,183,242
2,153,532
2,197,252
2,121,626
2,059,814
Shareholders’ equity
277,758
269,827
262,865
254,839
247,845
Common shareholders’ equity (3)
260,418
252,487
245,523
237,497
230,503
Tangible common equity (4)
191,531
202,661
195,610
187,495
180,408
Unrealized (loss) gain on investment securities, net of tax
$
(374
)
1,292
(1,467
)
(5,293
)
(1,154
)
Common shares outstanding
14,094
13,863
13,853
13,829
13,810
Treasury shares
304
299
309
333
352
CAPITAL RATIOS AND PER SHARE DATA:
Leverage ratio
7.34
%
7.64
7.51
7.63
7.68
Tier 1 risk-based capital
10.44
%
10.95
10.89
10.82
10.94
Total risk-based capital
11.69
%
12.20
12.14
12.08
12.19
Common equity to assets
8.52
%
8.44
8.14
8.11
8.04
Tangible common equity to tangible assets (4)
6.41
%
6.89
6.60
6.51
6.40
Common book value per share
$
18.48
18.21
17.72
17.17
16.69
Tangible common book value per share (4)
13.59
14.62
14.12
13.56
13.06
(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, except per share amounts)
Quarterly Trends
Nine months ended
2014
2013
September 30,
Third
Second
First
Fourth
Third
2014
2013
Quarter
Quarter
Quarter
Quarter
Quarter
SELECTED INCOME STATEMENT DATA:
Interest income
$
75,071
73,713
25,129
24,883
25,059
25,218
24,623
Interest expense
5,435
5,499
1,871
1,780
1,784
1,838
1,820
Net interest income
69,636
68,214
23,258
23,103
23,275
23,380
22,803
Provision for loan losses
5,879
6,672
2,015
1,758
2,106
2,407
2,770
Net interest income after provision
for loan losses
63,757
61,542
21,243
21,345
21,169
20,973
20,033
Noninterest income:
Service charges on deposits
6,768
7,437
2,277
2,241
2,250
2,511
2,728
ATM and debit card
3,694
3,849
1,263
1,257
1,174
1,249
1,283
Investment advisory
1,647
1,917
524
561
562
428
568
Company owned life insurance
1,249
1,275
421
425
403
431
422
Insurance income
979
189
922
16
41
73
92
Investments in limited partnerships
894
538
187
81
626
319
241
Loan servicing
450
452
120
176
154
118
227
Net gain (loss) on sale of loans held for sale
231
134
76
50
105
(17
)
(101
)
Net gain on investment securities
1,777
1,224
515
949
313
2
—
Net (loss) gain on sale of other assets
61
39
72
24
(35
)
(142
)
—
Other
2,445
2,044
884
797
764
763
709
Total noninterest income
20,195
19,098
7,261
6,577
6,357
5,735
6,169
Noninterest expense:
Salaries and employee benefits
28,044
28,408
9,725
9,063
9,256
9,420
9,473
Occupancy and equipment
9,505
9,163
3,131
3,139
3,235
3,203
2,959
Professional services
3,332
2,844
976
1,384
972
992
814
Computer and data processing
2,225
2,205
725
777
723
643
689
Supplies and postage
1,554
1,806
507
535
512
536
518
FDIC assessments
1,200
1,092
390
388
422
372
367
Advertising and promotions
609
676
216
214
179
220
209
Other
6,507
5,861
2,285
2,308
1,914
2,000
1,980
Total noninterest expense
52,976
52,055
17,955
17,808
17,213
17,386
17,009
Income before income taxes
30,976
28,585
10,549
10,114
10,313
9,322
9,193
Income tax expense
9,541
9,422
3,365
3,082
3,094
2,955
3,029
Net income
21,435
19,163
7,184
7,032
7,219
6,367
6,164
Preferred stock dividends
1,097
1,100
366
365
366
366
365
Net income available to common shareholders
$
20,338
18,063
6,818
6,667
6,853
6,001
5,799
FINANCIAL RATIOS AND STOCK DATA:
Earnings per share – basic
$
1.47
1.32
0.49
0.48
0.50
0.44
0.42
Earnings per share – diluted
$
1.46
1.31
0.49
0.48
0.50
0.43
0.42
Cash dividends declared on common stock
$
0.57
0.55
0.19
0.19
0.19
0.19
0.19
Common dividend payout ratio (1)
38.78
%
41.67
38.78
39.58
38.00
43.18
45.24
Dividend yield (annualized)
3.39
%
3.59
3.35
3.25
3.35
3.05
3.68
Return on average assets
0.96
%
0.92
0.95
0.95
0.99
0.88
0.88
Return on average equity
10.70
%
10.13
10.41
10.52
11.19
10.03
9.93
Return on average common equity (2)
10.85
%
10.25
10.55
10.66
11.38
10.15
10.05
Return on average tangible common equity (3)
13.77
%
13.03
13.73
13.31
14.30
12.90
12.88
Efficiency ratio (4)
58.24
%
58.72
57.65
60.15
56.96
57.76
56.95
Stock price (Nasdaq: FISI):
High
$
25.69
21.99
24.94
24.88
25.69
26.59
21.99
Low
$
19.72
17.92
21.71
22.17
19.72
20.14
18.39
Close
$
22.48
20.46
22.48
23.42
23.02
24.71
20.46
(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)See Appendix A – Non-GAAP to GAAP Reconciliation for the computation of this Non-GAAP measure.
(4)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.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited)
(Amounts in thousands)
Quarterly Trends
Nine months ended
2014
2013
September 30,
Third
Second
First
Fourth
Third
2014
2013
Quarter
Quarter
Quarter
Quarter
Quarter
SELECTED AVERAGE BALANCES:
Federal funds sold and interest-earning deposits
$
153
223
51
94
316
94
126
Investment securities (1)
877,923
829,207
854,030
875,855
904,437
849,069
821,561
Loans (2):
Commercial business
271,190
257,172
273,239
275,105
265,137
253,458
256,256
Commercial mortgage
473,263
431,440
473,168
473,883
472,733
460,722
442,178
Residential mortgage
109,030
125,017
105,255
108,535
113,390
118,113
121,462
Home equity
351,212
299,474
377,360
346,911
328,833
320,872
309,970
Consumer indirect
648,901
596,260
653,192
651,150
642,241
627,557
605,286
Other consumer
21,251
24,412
20,847
20,855
22,062
23,132
23,641
Total loans
1,874,847
1,733,775
1,903,061
1,876,439
1,844,396
1,803,854
1,758,793
Total interest-earning assets
2,752,923
2,563,205
2,757,142
2,752,388
2,749,149
2,653,017
2,580,480
Goodwill and other intangible assets, net
53,085
50,249
59,306
49,879
49,968
50,058
50,153
Total assets
2,975,094
2,784,647
2,985,920
2,973,735
2,965,400
2,860,733
2,784,580
Interest-bearing liabilities:
Interest-bearing demand
502,170
483,428
486,311
509,398
511,073
501,753
466,889
Savings and money market
770,008
717,583
758,306
789,956
761,799
757,868
719,452
Certificates of deposit
627,550
628,694
634,400
629,945
618,126
599,971
603,434
Borrowings
253,017
184,236
259,995
224,801
274,414
208,338
207,491
Total interest-bearing liabilities
2,152,745
2,013,941
2,139,012
2,154,100
2,165,412
2,067,930
1,997,266
Noninterest-bearing demand deposits
539,693
503,734
556,485
537,895
524,346
526,146
527,438
Total deposits
2,439,421
2,333,439
2,435,502
2,467,194
2,415,344
2,385,738
2,317,213
Total liabilities
2,707,241
2,531,702
2,712,274
2,705,578
2,703,777
2,608,815
2,538,377
Shareholders’ equity
267,853
252,945
273,646
268,157
261,623
251,918
246,203
Common equity (3)
250,512
235,531
256,306
250,815
244,281
234,576
228,827
Tangible common equity (4)
$
197,427
185,282
197,000
200,936
194,313
184,518
178,674
Common shares outstanding:
Basic
13,840
13,734
13,953
13,791
13,773
13,754
13,745
Diluted
13,890
13,774
14,007
13,838
13,824
13,817
13,787
SELECTED AVERAGE YIELDS:
(Tax equivalent basis)
Federal funds sold and interest-earning deposits
0.10
%
0.19
0.28
0.07
0.08
0.16
0.15
Investment securities
2.43
%
2.40
2.43
2.45
2.43
2.46
2.42
Loans
4.36
%
4.69
4.31
4.32
4.45
4.55
4.59
Total interest-earning assets
3.75
%
3.94
3.73
3.73
3.79
3.88
3.90
Interest-bearing demand
0.12
%
0.15
0.12
0.12
0.13
0.16
0.18
Savings and money market
0.12
%
0.13
0.12
0.12
0.13
0.14
0.14
Certificates of deposit
0.76
%
0.79
0.78
0.76
0.74
0.77
0.77
Borrowings
0.37
%
0.39
0.37
0.36
0.38
0.38
0.38
Total interest-bearing liabilities
0.34
%
0.37
0.35
0.33
0.33
0.35
0.36
Net interest rate spread
3.41
%
3.57
3.38
3.40
3.46
3.53
3.54
Net interest rate margin
3.48
%
3.66
3.46
3.47
3.52
3.61
3.62
(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)
2014
2013
September 30,
June 30,
March 31,
December 31,
September 30,
ASSET QUALITY DATA:
Allowance for Loan Losses
Beginning balance
$
27,166
27,152
26,736
26,685
25,590
Net loan charge-offs (recoveries):
Commercial business
44
(65
)
39
328
104
Commercial mortgage
66
159
(7
)
369
(87
)
Residential mortgage
11
61
57
118
22
Home equity
66
127
95
8
14
Consumer indirect
1,577
1,336
1,350
1,416
1,465
Other consumer
173
126
156
117
157
Total net charge-offs
1,937
1,744
1,690
2,356
1,675
Provision for loan losses
2,015
1,758
2,106
2,407
2,770
Ending balance
$
27,244
27,166
27,152
26,736
26,685
Supplemental information
Period end loans:
Originated loans
$
1,866,671
1,853,728
1,803,209
1,785,599
1,728,453
Acquired loans
41,174
42,936
45,631
48,020
51,219
Total loans
$
1,907,845
1,896,664
1,848,840
1,833,619
1,779,672
Allowance for loan losses to total loans
1.43
%
1.43
1.47
1.46
1.50
Allowance for loan losses for originated
loans to originated loans
1.46
%
1.47
1.51
1.50
1.54
Net charge-offs (recoveries) to average loans (annualized):
Commercial business
0.06
%
-0.09
0.06
0.51
0.16
Commercial mortgage
0.06
%
0.13
-0.01
0.32
-0.08
Residential mortgage
0.04
%
0.23
0.21
0.41
0.07
Home equity
0.07
%
0.15
0.12
0.01
0.02
Consumer indirect
0.96
%
0.82
0.85
0.90
0.96
Other consumer
3.29
%
2.42
2.87
2.01
2.63
Total loans
0.40
%
0.37
0.37
0.52
0.38
Non-performing loans:
Commercial business
$
3,258
3,589
3,706
3,474
4,078
Commercial mortgage
2,460
2,734
9,545
9,663
2,835
Residential mortgage
656
758
760
1,078
1,337
Home equity
464
371
826
925
911
Consumer indirect
1,300
1,427
1,387
1,471
1,161
Other consumer
46
12
46
11
16
Total non-performing loans
8,184
8,891
16,270
16,622
10,338
Foreclosed assets
509
554
412
333
424
Non-performing investment securities
—
—
113
128
128
Total non-performing assets
$
8,693
9,445
16,795
17,083
10,890
Total non-performing loans to total loans
0.43
%
0.47
0.88
0.91
0.58
Total non-performing loans to originated loans
0.44
%
0.48
0.90
0.93
0.60
Total non-performing assets to total assets
0.28
%
0.32
0.56
0.58
0.38
Allowance for loan losses to non-performing loans
333
%
306
167
161
258
2
FINANCIAL INSTITUTIONS, INC. Appendix A — Non-GAAP to GAAP Reconciliation (Unaudited) (In thousands, except per share amounts)
Quarterly Trends
Nine months ended
2014
2013
September 30,
Third
Second
First
Fourth
Third
2014
2013
Quarter
Quarter
Quarter
Quarter
Quarter
Ending tangible assets:
Total assets
$
3,055,304
2,993,264
3,015,619
2,928,636
2,867,517
Less: Goodwill and other intangible assets, net
68,887
49,826
49,913
50,002
50,095
Tangible assets (non-GAAP)
$
2,986,417
2,943,438
2,965,706
2,878,634
2,817,422
Ending tangible common equity:
Common shareholders’ equity
$
260,418
252,487
245,523
237,497
230,503
Less: Goodwill and other intangible assets, net
68,887
49,826
49,913
50,002
50,095
Tangible common equity (non-GAAP)
$
191,531
202,661
195,610
187,495
180,408
Tangible common equity to tangible assets (non-GAAP) (1)
6.41
%
6.89
6.60
6.51
6.40
Common shares outstanding
14,094
13,863
13,853
13,829
13,810
Tangible common book value per share (non-GAAP) (2)
$
13.59
14.62
14.12
13.56
13.06
Average tangible common equity:
Average common equity
$
250,512
235,531
256,306
250,815
244,281
234,576
228,827
Average goodwill and other intangible assets, net
53,085
50,249
59,306
49,879
49,968
50,058
50,153
Average tangible common equity (non-GAAP)
$
197,427
185,282
197,000
200,936
194,313
184,518
178,674
Return on average tangible common equity (3)
13.77
%
13.03
13.73
13.31
14.30
12.90
12.88
(1)Tangible common equity divided by tangible assets.
(2)Tangible common equity divided by common shares outstanding.
(3)Annualized net income divided by average tangible common equity.
3
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
