News Column

Financial Institutions, Inc. Reports Second Quarter 2014 Net Income of $7.0 Million

July 23, 2014

WARSAW, N.Y., July 23, 2014 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (the "Company") (Nasdaq:FISI), the parent company of Five Star Bank, today reported net income for the second quarter ended June 30, 2014 of $7.0 million, compared with $7.2 million for the first quarter of 2014 and $6.9 million for the second quarter of 2013. After preferred dividends, second quarter earnings per diluted common share was $0.48, compared with $0.50 per share for the first quarter of 2014 and $0.47 per share for the second quarter of 2013.

"We delivered solid earnings in the second quarter of 2014," said Martin K. Birmingham, the Company's President and Chief Executive Officer. "We grew loans, credit quality continued to improve, operating expenses were well managed and capital levels strengthened. While our near-term outlook is for a continuation of the low interest rate environment, we are making important progress on our strategic growth priorities which call for increased penetration of the Rochester and Buffalo markets and the diversification of our revenue base by expanding fee-based services. We are pleased to report that meaningful progress was made during the second quarter on both of these fronts and we expect these advancements to benefit our long-term performance."

Highlights:

• Announced the pending acquisition of Scott Danahy Naylon Co., Inc. ("SDN"), a full service insurance agency, to enhance and diversify revenue• Quarterly net income was $7.0 million, up 3% from the same period a year ago• Average loans increased by $144.7 million or 8% from the second quarter of 2013 and $32.0 million or 2% from the first quarter of 2014, as total loans at the end of second quarter of 2014 reached record levels• Average deposits for the second quarter reached highest level in Company history at over $2.4 billion• Non-performing assets decreased 44% from the first quarter of 2014• Shareholders' equity and common book value per share reached record levels at the end of the second quarter• Quarterly cash dividend of $0.19 per common share represents a 3.25% dividend yield as of June 30, 2014 and a return of 40% of second quarter net income to common shareholders• Strong quarterly return on average common equity of 10.66% and return on average tangible common equity of 13.31%• Capital ratios remain strong with the leverage ratio improving to 7.64% and total risk-based capital ratio increasing to 12.20% in the second quarter

Net Interest Income and Net Interest Margin

Net interest income totaled $23.1 million in the second quarter of 2014, down from $23.3 million in the first quarter of 2014 and up from $22.5 million in the second quarter of 2013. Average earning assets were up $3.2 million compared to the first quarter of 2014 and $190.4 million compared to the second quarter of 2013. The increase from the prior year period included increases of $144.7 million and $45.9 million in loans and investment securities, respectively. The growth in earning assets was offset by a narrowing net interest margin. Second quarter 2014 net interest margin was 3.47%, a decrease of 5 basis points from 3.52% reported in the first quarter of 2014 and a 16 basis point decrease from 3.63% reported in the second quarter of 2013.

"We had another solid quarter of performance, driven by loan and deposit growth and further enhanced by our recently adopted tax planning strategy," said Kevin B. Klotzbach, the Company's Executive Vice President and Chief Financial Officer. "We continue to be focused on earnings growth by carefully managing the aspects of our business that we can control, while maintaining high credit quality."

Noninterest Income and Expense

Noninterest income totaled $6.6 million in the second quarter of 2014, compared to $6.4 million in the first quarter of 2014 and second quarter of 2013. Included in these totals are gains realized from the sale of investment securities. Exclusive of those gains, noninterest income was $5.6 million in the recently completed quarter and $6.0 million in the first quarter of 2014 and second quarter of 2013. The main factor contributing to the lower noninterest income compared to the first quarter of 2014 was a decrease of $545 thousand from the Company's investments in limited partnerships, which are primarily small business investment companies. The income from these equity method investments fluctuates based on the performance of the underlying investments. The decrease in noninterest income compared to the second quarter of 2013 was primarily due to lower service charges on deposit accounts.

During the second quarter of 2014 the Company recognized gains of $949 thousand from the sale of investment securities. One pooled trust preferred security which had been classified as non-performing and 14 securities acquired in the first quarter of 2014 as part of our leverage strategy were sold during the second quarter of 2014. The leverage strategy utilizes the proceeds from short-term Federal Home Loan Bank advances to purchase high-quality investment securities.

Noninterest expense in the second quarter of 2014 totaled $17.8 million, compared with $17.2 million in the first quarter of 2014 and $17.5 million in the second quarter of 2013. The increases in noninterest expense were largely due to professional services associated with the pending 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 $3.1 million in both the first and second quarters of 2014, and $3.4 million in the second quarter of 2013. The effective tax rate was 30.5% for the second quarter of 2014, 30.0% for the first quarter of 2014 and 33.1% for the second quarter of 2013. Our reduced 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.

Balance Sheet and Capital Management

Total assets were $2.99 billion at June 30, 2014, down $22.4 million from $3.02 billion at March 31, 2014 and up $211.0 million from $2.78 billion at June 30, 2013. The increase from the prior year was driven by loan growth and higher investment security balances.

Total loans were $1.90 billion at June 30, 2014, up $47.8 million or 3% from March 31, 2014 and up $153.3 million from June 30, 2013. The increase in loans was attributable to organic growth, primarily in commercial, home equity and consumer indirect loans. Total investment securities were $864.0 million at June 30, 2014, down $64.3 million or 7% compared with March 31, 2014 and up $36.1 million or 4% from June 30, 2013. During the second quarter of 2014 the Company sold approximately $42 million in investment securities acquired as part of our leverage strategy during the first quarter of 2014.

Total deposits were $2.45 billion at June 30, 2014, a decrease of $83.3 million from March 31, 2014 and an increase of $125.8 million from June 30, 2013. The decrease during the second quarter of 2014 was mainly due to seasonal outflows of municipal deposits, while the year-over-year increase was primarily due to successful business development efforts. Public deposit balances represented 25% of total deposits at June 30, 2014, compared to 28% at March 31, 2014 and 23% at June 30, 2013.

Short-term borrowings were $254.7 million at June 30, 2014, up $57.9 million and $61.3 million from March 31, 2014 and June 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 second quarter 2014. Shareholders' equity was $269.8 million at June 30, 2014, compared with $262.9 million at March 31, 2014 and $244.9 million at June 30, 2013. Common book value per share was $18.21 at June 30, 2014, an increase of 3% from $17.72 at March 31, 2014 and 11% from $16.47 at June 30, 2013. Tangible common book value per share was $14.62 at June 30, 2014, an increase of 4% from $14.12 at March 31, 2014 and 14% from $12.84 at June 30, 2013.

During the second quarter of 2014, the Company declared a common stock dividend of $0.19 per common share, consistent with the prior quarter and up $0.01 per share from the second quarter of 2013. The second quarter 2014 dividend returned 40% of the quarter's net income to common shareholders.

The Company's leverage ratio was 7.64% at June 30, 2014, compared to 7.51% and 7.59% at March 31, 2014 and June 30, 2013, respectively. The capital ratios increased from the prior quarter due to an increase in shareholders' equity and a slight decrease in total assets.

Credit Quality

Overall credit quality improved during the second quarter of 2014. Non-performing assets at June 30, 2014 declined $7.4 million compared with March 31, 2014, driven by a decrease in non-performing loans. Non-performing commercial mortgage loans decreased primarily due to the resolution of a single commercial mortgage which had been modified as a troubled debt restructuring and placed on nonaccrual status during the fourth quarter 2013. The loan had a principal balance of $6.8 million as of March 31, 2014. Non-performing assets declined $2.5 million from second quarter of 2013 due to broad improvements in the consumer and commercial loan portfolios, partially offset by an increase in non-performing indirect loans. 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 0.32% at June 30, 2014 compared with 0.56% at March 31, 2014 and 0.43% at June 30, 2013.

The provision for loans losses for the second quarter of 2014 decreased $348 thousand compared with the first quarter of 2014 and increased $565 thousand compared to the second quarter of 2013. Net charge-offs for the second quarter of 2014 were $1.7 million, consistent with the first quarter of 2014 and up from $1.4 million in the second quarter of 2013. Net charge-offs expressed as an annualized percentage of average loans outstanding were 0.37% in both the first and second quarters of 2014 and 0.33% in the second quarter of 2013.

The allowance to total loans was 1.43% at June 30, 2014, and 1.47% at March 31, 2014 and June 30, 2013. The ratio of the allowance for loan losses to total loans declined in both comparisons, reflecting overall improvement in credit quality. The allowance to non-performing loans was 306% at June 30, 2014 compared with 167% at March 31, 2014, and 227% at June 30, 2013. The higher allowance to non-performing loans ratio at June 30, 2014 was driven by the reduction in non-performing loans previously described.

About Financial Institutions, Inc.

Financial Institutions, Inc. provides diversified financial services through its subsidiary, Five Star Bank. 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. Financial Institutions, Inc. and its subsidiary, Five Star Bank, employ over 600 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 on Form 10-K and its Quarterly Reports on Form 10-Q on file with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.

FINANCIAL INSTITUTIONS, INC.  
Selected Financial Information (Unaudited)  
(Amounts in thousands, except per share amounts)  
 20142013 
 June 30,March 31,December 31,September 30,June 30,
SELECTED BALANCE SHEET DATA:          
           
Cash and cash equivalents$64,832 72,401 59,692 99,384 50,927
Investment securities:          
Available for sale 601,903 674,650 609,400 583,551 810,549
Held-to-maturity 262,057 253,576 249,785 245,708 17,348
Total investment securities 863,960 928,226 859,185 829,259 827,897
Loans held for sale 201 900 3,381 2,810 3,423
Loans:          
Commercial business 277,685 268,352 265,766 253,925 257,732
Commercial mortgage 469,055 468,763 469,284 449,565 437,515
Residential mortgage 106,206 110,164 113,045 117,624 118,117
Home equity 369,578 332,348 326,086 316,626 306,215
Consumer indirect 652,748 647,546 636,368 618,088 599,586
Other consumer 21,392 21,667 23,070 23,844 24,249
Total loans 1,896,664 1,848,840 1,833,619 1,779,672 1,743,414
Allowance for loan losses 27,166 27,152 26,736 26,685 25,590
Total loans, net 1,869,498 1,821,688 1,806,883 1,752,987 1,717,824
           
Total interest-earning assets (1)(2) 2,758,779 2,780,489 2,705,045 2,613,746 2,576,028
Goodwill and other intangible assets, net 49,826 49,913 50,002 50,095 50,190
Total assets 2,993,264 3,015,619 2,928,636 2,867,517 2,782,303
           
Deposits:          
Noninterest-bearing demand 551,229 532,914 535,472 542,517 511,802
Interest-bearing demand 507,083 541,660 470,733 519,283 475,448
Savings and money market 766,594 812,734 717,928 757,454 713,459
Certificates of deposit 625,172 646,112 595,923 594,931 623,527
Total deposits 2,450,078 2,533,420 2,320,056 2,414,185 2,324,236
Borrowings 254,683 196,746 337,042 188,146 193,413
Total interest-bearing liabilities 2,153,532 2,197,252 2,121,626 2,059,814 2,005,847
Shareholders' equity 269,827 262,865 254,839 247,845 244,888
Common shareholders' equity (3) 252,487 245,523 237,497 230,503 227,494
Tangible common equity (4) 202,661 195,610 187,495 180,408 177,304
Unrealized (loss) gain on investment securities, net of tax$1,292 (1,467) (5,293) (1,154) (725)
           
Common shares outstanding 13,863 13,853 13,829 13,810 13,809
Treasury shares 299 309 333 352 353
           
CAPITAL RATIOS AND PER SHARE DATA:          
           
Leverage ratio 7.64% 7.51 7.63 7.68 7.59
Tier 1 risk-based capital 10.95% 10.89 10.82 10.94 10.96
Total risk-based capital 12.20% 12.14 12.08 12.19 12.21
Common equity to assets 8.44% 8.14 8.11 8.04 8.18
Tangible common equity to tangible assets (4) 6.89% 6.60 6.51 6.40 6.49
           
Common book value per share$18.21 17.72 17.17 16.69 16.47
Tangible common book value per share (4) 14.62 14.12 13.56 13.06 12.84
________          
(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
 Six months ended20142013
 June 30,SecondFirstFourthThirdSecond
 20142013QuarterQuarterQuarterQuarterQuarter
SELECTED INCOME STATEMENT DATA:              
               
Interest income$49,942 49,090 24,883 25,059 25,218 24,623 24,342
Interest expense 3,564 3,679 1,780 1,784 1,838 1,820 1,818
Net interest income 46,378 45,411 23,103 23,275 23,380 22,803 22,524
Provision for loan losses 3,864 3,902 1,758 2,106 2,407 2,770 1,193
Net interest income after provision for loan losses 42,514 41,509 21,345 21,169 20,973 20,033 21,331
Noninterest income:              
Service charges on deposits 4,491 4,709 2,241 2,250 2,511 2,728 2,568
ATM and debit card 2,431 2,566 1,257 1,174 1,249 1,283 1,317
Investment advisory 1,124 1,349 561 563 428 568 650
Company owned life insurance 828 853 425 403 431 422 438
Investments in limited partnerships 707 297 81 626 319 241 136
Loan servicing 330 225 176 154 118 227 152
Net gain (loss) on sale of loans held for sale 155 235 50 105 (17) (101) 35
Net gain on investment securities 1,262 1,224 949 313 2 -- 332
Net (loss) gain on sale of other assets (11) 39 24 (35) (142) -- 38
Other 1,617 1,432 813 804 836 801 710
Total noninterest income 12,934 12,929 6,577 6,357 5,735 6,169 6,376
Noninterest expense:              
Salaries and employee benefits 18,319 18,935 9,063 9,256 9,420 9,473 9,226
Occupancy and equipment 6,374 6,204 3,139 3,235 3,203 2,959 3,035
Professional services 2,356 2,030 1,384 972 992 814 1,093
Computer and data processing 1,500 1,516 777 723 643 689 812
Supplies and postage 1,047 1,288 535 512 536 518 608
FDIC assessments 810 725 388 422 372 367 364
Advertising and promotions 393 467 214 179 220 209 253
Other 4,222 3,881 2,308 1,914 2,000 1,980 2,071
Total noninterest expense 35,021 35,046 17,808 17,213 17,386 17,009 17,462
Income before income taxes 20,427 19,392 10,114 10,313 9,322 9,193 10,245
Income tax expense 6,176 6,393 3,082 3,094 2,955 3,029 3,395
Net income 14,251 12,999 7,032 7,219 6,367 6,164 6,850
Preferred stock dividends 731 735 365 366 366 365 367
Net income available to common shareholders$13,520 12,264 6,667 6,853 6,001 5,799 6,483
               
FINANCIAL RATIOS AND STOCK DATA:              
               
Earnings per share – basic$0.98 0.89 0.48 0.50 0.44 0.42 0.47
Earnings per share – diluted$0.98 0.89 0.48 0.50 0.43 0.42 0.47
Cash dividends declared on common stock$0.38 0.36 0.19 0.19 0.19 0.19 0.18
Common dividend payout ratio (1) 38.78% 40.45 39.58 38.00 43.18 45.24 38.30
Dividend yield (annualized) 3.27% 3.94 3.25 3.35 3.05 3.68 3.92
Return on average assets 0.97% 0.94 0.95 0.99 0.88 0.88 0.99
Return on average equity 10.85% 10.22 10.52 11.19 10.03 9.93 10.70
Return on average common equity (2) 11.01% 10.35 10.66 11.38 10.15 10.05 10.86
Return on average tangible common equity (3) 13.79% 13.11 13.31 14.30 12.90 12.88 13.74
Efficiency ratio (4) 58.54% 59.62 60.15 56.96 57.76 56.95 59.38
Stock price (Nasdaq: FISI):              
High$25.69 20.83 24.88 25.69 26.59 21.99 20.66
Low$19.72 17.92 22.17 19.72 20.14 18.39 17.92
Close$23.42 18.41 23.42 23.02 24.71 20.46 18.41
________              
(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
 Six months ended20142013
 June 30,SecondFirstFourthThirdSecond
 20142013QuarterQuarterQuarterQuarterQuarter
SELECTED AVERAGE BALANCES:              
               
Federal funds sold and interest-earning deposits$204 272 94 316 94 126 226
Investment securities (1) 890,068 833,094 875,855 904,437 849,069 821,561 829,953
Loans (2):              
Commercial business 270,148 257,638 275,105 265,137 253,458 256,256 256,332
Commercial mortgage 473,312 425,982 473,883 472,733 460,722 442,178 433,631
Residential mortgage 110,949 126,824 108,535 113,390 118,113 121,462 123,263
Home equity 337,922 294,140 346,911 328,833 320,872 309,970 299,230
Consumer indirect 646,720 591,671 651,150 642,241 627,557 605,286 595,235
Other consumer 21,455 24,804 20,855 22,062 23,132 23,641 24,080
Total loans 1,860,506 1,721,059 1,876,439 1,844,396 1,803,854 1,758,793 1,731,771
Total interest-earning assets 2,750,778 2,554,425 2,752,388 2,749,149 2,653,017 2,580,480 2,561,950
Goodwill and other intangible assets, net 49,923 50,299 49,879 49,968 50,058 50,153 50,249
Total assets 2,969,591 2,784,681 2,973,735 2,965,400 2,860,733 2,784,580 2,789,104
               
Interest-bearing liabilities:              
Interest-bearing demand 510,231 491,835 509,398 511,073 501,753 466,889 489,047
Savings and money market 775,956 716,632 789,956 761,799 757,868 719,452 739,328
Certificates of deposit 624,068 641,534 629,945 618,126 599,971 603,434 635,583
Borrowings 249,470 172,415 224,801 274,414 208,338 207,491 153,626
Total interest-bearing liabilities 2,159,725 2,022,416 2,154,100 2,165,412 2,067,930 1,997,266 2,017,584
Noninterest-bearing demand deposits 531,158 491,685 537,895 524,346 526,146 527,438 501,354
Total deposits 2,441,413 2,341,686 2,467,194 2,415,344 2,385,738 2,317,213 2,365,312
Total liabilities 2,704,683 2,528,309 2,705,578 2,703,777 2,608,815 2,538,377 2,532,197
Shareholders' equity 264,908 256,372 268,157 261,623 251,918 246,203 256,907
Common equity (3) 247,566 238,939 250,815 244,281 234,576 228,827 239,500
Tangible common equity (4)$197,643 188,640 200,936 194,313 184,518 178,674 189,251
Common shares outstanding:              
Basic 13,782 13,728 13,791 13,773 13,754 13,745 13,739
Diluted 13,831 13,767 13,838 13,824 13,817 13,787 13,767
               
SELECTED AVERAGE YIELDS:              
(Tax equivalent basis)              
               
Federal funds sold and interest-earning deposits 0.08% 0.20 0.07 0.08 0.16 0.15 0.19
Investment securities 2.44% 2.38 2.45 2.43 2.46 2.42 2.38
Loans 4.39% 4.74 4.32 4.45 4.55 4.59 4.65
Total interest-earning assets 3.76% 3.97 3.73 3.79 3.88 3.90 3.91
Interest-bearing demand 0.12% 0.13 0.12 0.13 0.16 0.18 0.14
Savings and money market 0.12% 0.13 0.12 0.13 0.14 0.14 0.13
Certificates of deposit 0.75% 0.80 0.76 0.74 0.77 0.77 0.79
Borrowings 0.37% 0.40 0.36 0.38 0.38 0.38 0.40
Total interest-bearing liabilities 0.33% 0.37 0.33 0.33 0.35 0.36 0.36
Net interest rate spread 3.43% 3.60 3.40 3.46 3.53 3.54 3.55
Net interest rate margin 3.49% 3.68 3.47 3.52 3.61 3.62 3.63
________              
(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)
 20142013
 June 30,March 31,December 31,September 30,June 30,
ASSET QUALITY DATA:          
           
Allowance for Loan Losses          
Beginning balance$27,152 26,736 26,685 25,590 25,827
Net loan charge-offs (recoveries):          
Commercial business (65) 39 328 104 87
Commercial mortgage 159 (7) 369 (87) (37)
Residential mortgage 61 57 118 22 72
Home equity 127 95 8 14 (20)
Consumer indirect 1,336 1,350 1,416 1,465 1,170
Other consumer 126 156 117 157 158
Total net charge-offs 1,744 1,690 2,356 1,675 1,430
Provision for loan losses 1,758 2,106 2,407 2,770 1,193
Ending balance$27,166 27,152 26,736 26,685 25,590
           
Supplemental information          
Period end loans:          
Originated loans$1,853,728 1,803,209 1,785,599 1,728,453 1,688,392
Acquired loans 42,936 45,631 48,020 51,219 55,022
Total loans$1,896,664 1,848,840 1,833,619 1,779,672 1,743,414
           
Allowance for loan losses to total loans 1.43% 1.47 1.46 1.50 1.47
Allowance for loan losses for originated loans to originated loans 1.47% 1.51 1.50 1.54 1.52
           
Net charge-offs (recoveries) to average loans (annualized):          
Commercial business -0.09% 0.06 0.51 0.16 0.14
Commercial mortgage 0.13% -0.01 0.32 -0.08 -0.03
Residential mortgage 0.23% 0.21 0.41 0.07 0.24
Home equity 0.15% 0.12 0.01 0.02 -0.03
Consumer indirect 0.82% 0.85 0.90 0.96 0.79
Other consumer 2.42% 2.87 2.01 2.63 2.63
Total loans 0.37% 0.37 0.52 0.38 0.33
           
Non-performing loans:          
Commercial business$3,589 3,706 3,474 4,078 5,043
Commercial mortgage 2,734 9,545 9,663 2,835 3,073
Residential mortgage 758 760 1,078 1,337 1,423
Home equity 371 826 925 911 699
Consumer indirect 1,427 1,387 1,471 1,161 1,035
Other consumer 12 46 11 16 22
Total non-performing loans 8,891 16,270 16,622 10,338 11,295
Foreclosed assets 554 412 333 424 415
Non-performing investment securities -- 113 128 128 207
Total non-performing assets$9,445 16,795 17,083 10,890 11,917
           
Total non-performing loans to total loans 0.47% 0.88 0.91 0.58 0.65
Total non-performing loans to originated loans 0.48% 0.90 0.93 0.60 0.67
Total non-performing assets to total assets 0.32% 0.56 0.58 0.38 0.43
Allowance for loan losses to non-performing loans 306% 167 161 258 227
 
FINANCIAL INSTITUTIONS, INC.
Appendix A - Non-GAAP to GAAP Reconciliation (Unaudited)
(In thousands, except per share amounts)
     Quarterly Trends
 Six months ended20142013
 June 30,SecondFirstFourthThirdSecond
 20142013QuarterQuarterQuarterQuarterQuarter
Ending tangible assets:              
Total assets    $2,993,264 3,015,619 2,928,636 2,867,517 2,782,303
Less: Goodwill and other intangible assets, net    49,826 49,913 50,002 50,095 50,190
Tangible assets (non-GAAP)    $2,943,438 2,965,706 2,878,634 2,817,422 2,732,113
               
Ending tangible common equity:              
Common shareholders' equity    $252,487 245,523 237,497 230,503 227,494
Less: Goodwill and other intangible assets, net     49,826 49,913 50,002 50,095 50,190
Tangible common equity (non-GAAP)    $202,661 195,610 187,495 180,408 177,304
               
Tangible common equity to tangible assets (non-GAAP) (1)     6.89% 6.60 6.51 6.40 6.49
               
Common shares outstanding     13,863 13,853 13,829 13,810 13,809
Tangible common book value per share (non-GAAP) (2)    $14.62 14.12 13.56 13.06 12.84
              
Average tangible common equity:              
Average common equity$247,566 238,939 250,815 244,281 234,576 228,827 239,500
Average goodwill and other intangible assets, net 49,923 50,299 49,879 49,968 50,058 50,153 50,249
Average tangible common equity (non-GAAP)$197,643 188,640 200,936 194,313 184,518 178,674 189,251
               
Return on average tangible common equity (3) 13.79% 13.11 13.31 14.30 12.90 12.88 13.74
________              
(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.

CONTACT: For additional information contact: Kevin B. Klotzbach Chief Financial Officer & Treasurer Phone: 585.786.1130 Email: KBKlotzbach@five-starbank.com

Source: Financial Institutions, Inc.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: GlobeNewswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters