Exhibit 99.1
Financial Institutions, Inc. Reports First Quarter Earnings
WARSAW, N.Y., April 20 /PRNewswire-FirstCall/ -- Financial Institutions,
Inc. (Nasdaq: FISI) today reported first quarter 2004 net income of $2,647,000
compared to $4,296,000 in 2003. Diluted earnings per share for the first
quarter of 2004 were $0.20, compared to $0.35 per share in the first quarter
of 2003. Return on average common equity was 5.42% for the first three months
of 2004 compared to 9.72% for the same period last year. The most significant
impact on first quarter 2004 financial results was the provision for loan
losses of $4.8 million, an increase of $1.5 million over the $3.3 million
provision for loan losses for the same quarter last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030114/FISILOGO )
Peter G. Humphrey, President and CEO of Financial Institutions, Inc. (FII)
stated: "Credit quality issues adversely impacted first quarter financial
results. We incurred $3.8 million in net loan charge-offs during the quarter,
of which $3.6 million was from our agricultural and commercial loan
portfolios. In addition a continuing soft regional economy has contributed to
other credits being downgraded. As previously stated, we have committed
substantial resources to monitor and resolve our problem credits. The Company
remains strong financially, with total deposits increasing $52 million over
last year, total equity growing $5 million, and payment of a cash dividend of
$0.16 per share during the first quarter of 2004."
Nonperforming assets declined to $50.5 million at March 31, 2004, compared
to $52.1 million at December 31, 2003, and have increased $10.1 million from
$40.4 million at March 31, 2003. Net loan charge-offs for the first quarter
of 2004 were $3.8 million compared to $8.3 million in the fourth quarter of
2003 and $1.5 million in the first quarter 2003. Agricultural loan net
charge-offs totaled $1.9 million, primarily related to a single relationship,
and commercial and commercial mortgage loan net charge-offs totaled $1.7
million for the first quarter 2004.
The ratio of the allowance for loan losses to nonperforming loans
increased to 61% at March 31, 2004 compared to 56% at December 31, 2003 and
60% at March 31, 2003. The ratio of the allowance for loan losses to total
loans increased to 2.29% at March 31, 2004, compared to 2.16% at December 31,
2003, and 1.75% at March 31, 2003. The provision for loan losses was $4.8
million for the first quarter of 2004 compared to $3.3 million for the three
months ending March 31, 2003.
For the first quarter of 2004, net interest income decreased 2% to
$18,457,000, compared to $18,841,000 for the first quarter of 2003. Net
interest margin was 3.86% for the quarter ended March 31, 2004, a drop of 15
basis points from 4.01% for the same period last year. The decline in net
interest income and net interest margin is partially attributed to weakening
loan demand. Total loans at March 31, 2004 were $1.312 billion down $33
million from December 31, 2003 and down $27 million from one year ago. Net
interest margin has also been adversely affected by spread compression created
from deposit product pricing being less sensitive to falling interest rates
during this period of historical low interest rates. At March 31, 2004 the
Company had $68 million in overnight Federal Funds Sold which provides for a
strong liquidity position and opportunities to benefit from any future upward
movement in the level of interest rates.
Noninterest income decreased 4% in the first quarter of 2004 to $5.9
million compared to $6.1 million for the same period last year. The decrease
in noninterest income relates to a drop in mortgage banking income and a
decline in realized security gains. Lower income from mortgage banking
activities reflects a decline in the volume of residential mortgage loans
being sold relative to the record refinancing activity of 2003.
Noninterest expense for the first quarter of 2004 totaled $15,908,000
compared with $15,576,000 for the first quarter of 2003. The increase in
noninterest expense is attributable to higher credit collection costs and
costs for additional lending and credit administration staff. The additional
noninterest expenses, coupled with a slowing of revenue growth, are the
principal factors in the increase in the Company's efficiency ratio to 61.15%
for the three months ended March 31, 2004, compared to 58.95% for the same
period a year ago.
At March 31, 2004 the Company had total assets of $2.223 billion, a 1%
increase from $2.203 billion at March 31, 2003. Total deposits were $1.872
billion at the end of first quarter 2004, compared with $1.821 billion a year
earlier. Total shareholders' equity at March 31, 2004 was $186 million
compared to $182 million a year earlier. Book value per common share at March
31, 2004 was $15.10, an increase of 2% from $14.75 at March 31, 2003. Common
stock dividends of $0.16 per share were declared in the first quarter of 2004
and 2003.
FII is the bank holding company parent of Wyoming County Bank, The
National Bank of Geneva, Bath National Bank, and First Tier Bank and Trust.
The four banks provide a wide range of consumer and commercial banking
services to individuals, municipalities, and businesses through a network of
49 offices and 71 ATMs in Western and Central New York State. FII's Financial
Services Group also provides diversified financial services to its customers
and clients, including brokerage, trust, insurance and employee benefits and
compensation consulting. More information on FII and its subsidiaries is
available through the Company web site at www.fiiwarsaw.com.
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. Please refer to the Company's filings with the Securities and
Exchange Commission for a summary of important factors that could affect the
Company's forward-looking statements. The Company undertakes no obligation to
revise these statements following the date of this press release.
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)
For the three months ended
March 31,
$ %
2004 2003 Change Change
Interest income $26,317 $28,527 $(2,210) (8)%
Interest expense 7,860 9,686 (1,826) (19)%
Net interest income 18,457 18,841 (384) (2)%
Provision for loan
losses 4,796 3,298 1,498 45%
Net interest income
after provision for
loan losses 13,661 15,543 (1,882) (12)%
Noninterest income:
Service charges on
deposits 2,818 2,655 163 6%
Financial services
group fees and
commissions 1,420 1,374 46 3%
Mortgage banking
activities 523 785 (262) (33)%
Gain (loss) on sale and
call of securities 50 291 (241) (83)%
Other 1,042 997 45 5%
Total noninterest
income 5,853 6,102 (249) (4)%
Noninterest expense:
Salaries and employee
benefits 9,152 8,881 271 3%
Other 6,756 6,695 61 1%
Total noninterest
expense 15,908 15,576 332 2%
Income before income
taxes 3,606 6,069 (2,463) (41)%
Income taxes 959 1,773 (814) (46)%
Net income 2,647 4,296 (1,649) (38)%
Preferred stock dividends 374 374 -- -- %
Net income available to
common shareholders $ 2,273 $ 3,922 $(1,649) (42)%
Taxable-equivalent net
interest income $19,582 $19,978 $(396) (2)%
Per common share data:
Net income - basic $0.20 $0.35 $(0.15) (43)%
Net income - diluted $0.20 $0.35 $(0.15) (43)%
Cash dividends declared $0.16 $0.16 $-- -- %
Book value $15.10 $14.75 $0.35 2%
Common shares outstanding:
Weighted average shares
- actual 11,170,972 11,107,014
Weighted average
shares - diluted 11,246,200 11,212,507
Period end actual 11,172,673 11,109,664
Performance ratios,
annualized:
Return on average
assets 0.49% 0.82%
Return on average common
equity 5.42% 9.72%
Common dividend payout
ratio 80.00% 45.71%
Net interest margin
(tax-equivalent) 3.86% 4.01%
Efficiency ratio 61.15% 58.95%
Asset quality data:
Loans past due over 90
days and still
accruing $2,199 $1,308
Restructured loans 3,081 2,940
Nonaccrual loans 44,324 34,798
Other real estate owned 850 1,316
Total nonperforming
assets $50,454 $40,362
Net loan charge-offs $3,837 $1,524
Asset quality ratios:
Nonperforming loans to
total loans 3.78% 2.92%
Nonperforming assets to
total loans and ORE 3.84% 3.01%
Allowance for loan losses
to total loans 2.29% 1.75%
Allowance for loan losses
to nonperforming loans 61% 60%
Net loan charge-offs to
average loans
(annualized) 1.15% 0.46%
Capital ratios:
Average common equity to
average total assets 7.78% 7.67%
Leverage ratio 7.04% 6.83%
Tier 1 risk-based capital
ratio 10.38% 9.72%
Risk-based capital
ratio 11.64% 10.98%
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(Dollars in thousands)
March 31
$ %
2004 2003 Change Change
ASSETS
Cash, due from banks and
interest-bearing
deposits $43,594 $48,828 $(5,234) (11)%
Federal funds sold 67,810 59,693 8,117 14%
Investment securities 711,801 665,022 46,779 7%
Loans 1,311,639 1,339,122 (27,483) (2)%
Allowance for loan
losses (30,023) (23,434) (6,589) 28%
Loans, net 1,281,616 1,315,688 (34,072) (3)%
Goodwill 40,621 40,621 -- -- %
Other assets 77,919 73,646 4,273 6%
Total assets $2,223,361 $2,203,498 $19,863 1%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand $ 251,035 $233,170 17,865 8%
Savings, money
market, and
int-bearing
checking 831,557 826,776 4,781 1%
Certificates of
deposit 789,625 760,662 28,963 4%
Total deposits 1,872,217 1,820,608 51,609 3%
Short-term borrowings 46,436 63,230 (16,794) (27)%
Long-term borrowings 85,485 94,991 (9,506) (10)%
Junior subordinated
debentures 16,702 16,200 502 3%
Other liabilities 16,028 26,898 (10,870) (40)%
Total liabilities 2,036,868 2,021,927 14,941 1%
Shareholders' equity:
Preferred equity 17,734 17,742 (8) -- %
Common equity 168,759 163,829 4,930 3%
Total shareholders'
equity (1) 186,493 181,571 4,922 3%
Total liabilities and
shareholders'
equity $2,223,361 $2,203,498 $19,863 1%
(1) Includes the after-tax impact of net unrealized gains on investment
securities classified as available for sale of $11,012 and $11,421 at
March 31, 2004 and 2003, respectively.
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Average Statements of Financial Condition
(Dollars in thousands)
For the three months ended
March 31,
$ %
2004 2003 Change Change
ASSETS
Cash, due from banks and
interest-bearing
deposits $42,702 $42,967 $ (265) (1)%
Federal funds sold 52,146 33,051 19,095 58%
Investment securities 655,366 640,174 15,192 2%
Loans 1,329,130 1,329,989 (859) -- %
Allowance for loan
losses (29,081) (21,963) (7,118) 32%
Loans, net 1,300,049 1,308,026 (7,977) (1)%
Goodwill 40,621 40,602 19 -- %
Other assets 78,158 70,045 8,113 12%
Total assets $2,169,042 $2,134,865 $34,177 2%
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits:
Demand 250,345 228,493 21,852 10%
Savings, money market,
and int-bearing
checking 797,117 799,110 (1,993) -- %
Certificates of
deposit 773,675 724,365 49,310 7%
Total deposits 1,821,137 1,751,968 69,169 4%
Short-term borrowings 44,400 60,512 (16,112) (27)%
Long-term borrowings 86,068 102,239 (16,171) (16)%
Junior subordinated
debentures 16,702 16,200 502 3%
Other liabilities 14,298 22,489 (8,191) (36)%
Total liabilities 1,982,605 1,953,408 29,197 1%
Shareholders' equity:
Preferred equity 17,734 17,742 (8) -- %
Common equity 168,703 163,715 4,988 3%
Total shareholders'
equity 186,437 181,457 4,980 3%
Total liabilities and
shareholders'
equity $2,169,042 $2,134,865 $34,177 2%
SOURCE Financial Institutions, Inc.
-0- 04/20/2004
/CONTACT: Ronald A. Miller, Senior Vice President and Chief Financial
Officer, +1-585-786-1102, for Financial Institutions, Inc./
/Photo: http://www.newscom.com/cgi-bin/prnh/20030114/FISILOGO /
/Web site: http://www.fiiwarsaw.com /
(FISI)
CO: Financial Institutions, Inc.
ST: New York
IN: FIN
SU: ERN