WARSAW, N.Y., April 22, 2009 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq:FISI) (the "Company"), the parent company of Five Star Bank, today announced net income of $3.0 million or $0.19 per diluted share for the first quarter of 2009.
Highlights:
* Net interest income for the first quarter of 2009 was $17.3
million, an increase of $2.2 million or 15% over the first quarter
of 2008. The increase is reflective of the growth in loans and
higher net interest margin.
* Total loans were $1.158 billion at March 31, 2009, a $185.5 million
increase or 19% from March 31, 2008.
-- Commercial loans were $483.2 million at March 31, 2009, an
increase of $48.9 million or 11% from one year ago.
-- Consumer loans were $674.7 million at March 31, 2009, an
increase of $136.6 million or 25% from one year ago.
* Net interest margin at 4.09% for the first quarter of 2009
increased 2 basis points from the fourth quarter of 2008 and
increased 36 basis points from the same quarter last year.
* Remains "well capitalized" with total equity capital of $191.7
million, a leverage capital ratio of 7.96% and a total risk-based
capital ratio of 12.49%.
* Provision for loan losses of $1.9 million for the first quarter
2009 exceeded net charge-offs of $1.0 million resulting in a $908
thousand increase in the allowance for loan losses to $19.7 million
or 1.70% of total loans.
"We are pleased to be starting 2009 with a solid first quarter," said Peter G. Humphrey, President and Chief Executive Officer of the Company. "Our results are particularly gratifying in light of the recent financial market difficulties. Our 2008 business development success continued as commercial loans outstanding were $483.2 million, an increase of $17.7 million or 4% from year-end and consumer loans increased $19.1 million or 3% in the first quarter. As loans and deposits increased over the prior quarter, our capital, liquidity and asset quality remained strong. These factors, along with higher revenues and our discipline in cost containment have resulted in the continued improvement of our core operations."
Net Interest Income
Net interest income was $17.3 million for the first quarter of 2009, relatively level with the fourth quarter of 2008 and up $2.2 million or 15% compared with the first quarter of 2008. Net interest margin improved to 4.09% in the first quarter of 2009, compared with 4.07% in the fourth quarter of 2008 and 3.73% in the first quarter of 2008. An improved mix of earning assets, primarily driven by growth in the loan portfolio, coupled with a significant decline in funding costs were the primary factors driving the increase in net interest income.
Noninterest Income
Noninterest income for the first quarter of 2009 was $4.7 million, compared with a noninterest loss of $(25.1) million and noninterest income of $4.7 million in the fourth and the first quarters of 2008, respectively. Absent a $29.9 million other-than-temporary impairment charge, noninterest income in the fourth quarter of 2008 would have been $4.8 million. Service charges on deposits, including nonsufficient fund fees, were down in the first quarter of 2009 as compared to the prior quarter and the same quarter a year ago, a trend that is being seen on a national level in the banking industry.
Noninterest Expense
Noninterest expense for the first quarter of 2009 was $16.1 million, an increase of $684 thousand from the fourth quarter of 2008 and an increase of $1.8 million from the first quarter of 2008. The most significant cause for the increase was higher FDIC assessments, a result of changes in FDIC deposit insurance coverage and changes in premiums mandated by the FDIC to replenish deposit insurance reserves. Also impacting first quarter of 2009 were increases in salaries and benefits due to higher incentive compensation and pension benefit costs, increases in occupancy and equipment costs associated with the opening of two new branches in the suburban Rochester area during 2008, and increases in professional services expense.
Balance Sheet
Total assets at March 31, 2009 were $2.030 billion, up $113.5 million from $1.917 billion at December 31, 2008. Total loans were $1.158 billion at March 31, 2009, an increase of $36.9 million from $1.121 billion at December 31, 2008. Total deposits increased $104.0 million to $1.737 billion at March 31, 2009, versus $1.633 billion at December 31, 2008. The increase in deposits in the first quarter of 2009 was principally attributed to an increase in public fund deposits.
Asset Quality and Capital Ratios
Net-charge-offs decreased by $259 thousand from the fourth quarter to $998 thousand, or 0.35% of average loans and non-performing loans increased by $931 thousand over the previous quarter to $9.1 million, or 0.79% of total loans. The provision for loan losses was $1.9 million for the quarter, compared to $2.6 million last quarter and $716 thousand a year ago. The allowance for loan losses was $19.7 million at March 31, 2009, compared with $18.7 million at December 31, 2008. At March 31, 2009 non-performing assets included $3.4 million in non-performing pooled trust preferred securities on which interest payments are being deferred. At March 31, 2009 the allowance for loan losses represented 1.70% of total loans and 215% of non-performing loans.
At March 31, 2009, all of the Company's regulatory capital ratios exceeded the guidelines required to be considered a "well capitalized institution" as established by the Company's primary banking regulators. Well capitalized levels are considered to be at least 5.00% for the leverage ratio and 10.00% for the total risk-based capital ratio. At March 31, 2009, the Company's leverage ratio was 7.96% and the total risk-based capital ratio was 12.49%.
About Financial Institutions, Inc.
With over $2.0 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)
2009 2008
---------- -------------------------------------------
March 31, Dec. 31, Sept. 30, June 30, March 31,
---------- ---------- ---------- ---------- ----------
SELECTED
BALANCE SHEET
DATA
(Amounts in
thousands)
Cash and cash
equivalents:
Cash and due
from banks $ 48,073 34,528 54,105 60,640 49,460
Federal funds
sold and
interest-
bearing
deposits 74,616 20,659 22,599 2,409 53,539
---------- ---------- ---------- ---------- ----------
Total cash
and cash
equivalents 122,689 55,187 76,704 63,049 102,999
Investment
securities:
Available for
sale 553,710 547,506 607,357 669,752 688,504
Held-to-
maturity 60,675 58,532 64,434 56,508 57,631
---------- ---------- ---------- ---------- ----------
Total
investment
securities 614,385 606,038 671,791 726,260 746,135
Loans held for
sale 2,290 1,013 1,008 926 1,099
Loans:
Commercial 174,505 158,543 156,809 140,745 144,976
Commercial
real estate 266,176 262,234 248,267 250,872 245,148
Agriculture 42,524 44,706 46,490 45,231 44,162
Residential
real estate 170,834 177,683 173,893 172,396 168,738
Consumer
indirect 283,465 255,054 227,971 177,967 142,565
Consumer
direct and
home equity 220,440 222,859 224,693 223,538 226,855
---------- ---------- ---------- ---------- ----------
Total loans 1,157,944 1,121,079 1,078,123 1,010,749 972,444
Allowance for
loan losses 19,657 18,749 17,420 16,038 15,549
---------- ---------- ---------- ---------- ----------
Total loans,
net 1,138,287 1,102,330 1,060,703 994,711 956,895
Total interest-
earning assets 1,843,522 1,743,141 1,789,499 1,749,808 1,771,676
Goodwill 37,369 37,369 37,369 37,369 37,369
Total assets 2,030,429 1,916,919 1,945,819 1,895,448 1,912,652
Deposits:
Noninterest-
bearing
demand 279,284 292,586 293,027 288,258 268,419
Interest-
bearing
demand 392,353 344,616 376,098 338,290 356,758
Savings and
money market 396,644 348,594 383,456 372,317 380,167
Certificates
of deposit 668,999 647,467 607,833 596,890 622,628
---------- ---------- ---------- ---------- ----------
Total
deposits 1,737,280 1,633,263 1,660,414 1,595,755 1,627,972
Borrowings 78,761 70,820 114,684 89,465 70,336
Total interest-
bearing
liabilities 1,536,757 1,411,497 1,482,071 1,396,962 1,429,889
Shareholders'
equity 191,676 190,300 152,770 188,998 197,364
Common
shareholders'
equity (1) 138,519 137,226 135,195 171,417 179,783
Tangible common
shareholders'
equity (2) 100,946 99,577 97,468 133,614 141,903
Securities
available for
sale - fair
value
adjustment
included in
shareholders'
equity, net
of tax $ 3,503 3,463 (9,797) (5,803) 944
Common shares
outstanding 10,805 10,798 10,806 10,913 10,992
Treasury shares 543 550 542 435 356
CAPITAL RATIOS
Leverage ratio 7.96% 8.05 7.37 9.17 9.38
Tier 1 risk-
based capital 11.23% 11.83 11.10 14.58 15.34
Total risk-
based capital 12.49% 13.08 12.35 15.83 16.59
Common equity
to assets 6.82% 7.16 6.95 9.04 9.40
Tangible common
equity to
tangible
assets (2) 5.07% 5.30 5.11 7.19 7.57
Common book
value per
share $ 12.82 12.71 12.51 15.71 16.36
Tangible common
book value
per share (2) $ 9.34 9.22 9.02 12.24 12.91
2009 2008
---------- ---------------------
First Year ended Fourth
Quarter Dec. 31, Quarter
---------- ---------- ----------
SELECTED INCOME STATEMENT DATA
(Dollar amounts in thousands)
Interest income $ 23,093 98,948 24,582
Interest expense 5,766 33,617 7,269
---------- ---------- ----------
Net interest income 17,327 65,331 17,313
Provision for loan losses 1,906 6,551 2,586
---------- ---------- ----------
Net interest income after
provision for loan losses 15,421 58,780 14,727
---------- ---------- ----------
Noninterest income (loss):
Service charges on deposits 2,320 10,497 2,685
ATM and debit card 811 3,313 853
Broker-dealer fees and commissions 269 1,458 235
Loan servicing 257 664 134
Company owned life insurance 260 563 294
Net gain on sale of loans held for
sale 170 339 35
Net gain on sale of other assets 158 305 51
Net gain on investment securities 54 288 56
Impairment charge on investment
securities (50) (68,215) (29,870)
Other 442 2,010 421
---------- ---------- ----------
Total noninterest income (loss) 4,691 (48,778) (25,106)
---------- ---------- ----------
Noninterest expense:
Salaries and employee benefits 8,731 31,437 7,811
Occupancy and equipment 2,876 10,502 2,713
Professional services 849 2,141 637
FDIC assessments 680 674 305
Computer and data processing 617 2,433 669
Supplies and postage 465 1,800 447
Advertising and promotions 174 1,453 548
Other 1,686 7,021 2,264
---------- ---------- ----------
Total noninterest expense 16,078 57,461 15,394
---------- ---------- ----------
Income (loss) before income taxes 4,034 (47,459) (25,773)
Income tax expense (benefit) 1,067 (21,301) (22,631)
---------- ---------- ----------
Net income (loss) $ 2,967 (26,158) (3,142)
========== ========== ==========
Preferred stock dividends 918 1,538 426
---------- ---------- ----------
Net income (loss) applicable to
common shareholders $ 2,049 (27,696) (3,568)
========== ========== ==========
STOCK AND RELATED PER SHARE DATA
Net income (loss) per share -
basic $ 0.19 (2.56) (0.33)
Net income (loss) per share -
diluted $ 0.19 (2.56) (0.33)
Cash dividends declared on
common stock $ 0.10 0.54 0.10
Common dividend payout ratio (3) 52.63% NA NA
Dividend yield (annualized) 5.32% 3.76 2.77
Stock price (Nasdaq: FISI):
High $ 14.95 22.50 20.27
Low $ 3.27 10.06 10.06
Close $ 7.62 14.35 14.35
2008
--------------------------------
Third Second First
Quarter Quarter Quarter
---------- ---------- ----------
SELECTED INCOME STATEMENT DATA
(Dollar amounts in thousands)
Interest income $ 24,558 24,536 25,272
Interest expense 7,812 8,349 10,187
---------- ---------- ----------
Net interest income 16,746 16,187 15,085
Provision for loan losses 1,891 1,358 716
---------- ---------- ----------
Net interest income after
provision for loan losses 14,855 14,829 14,369
---------- ---------- ----------
Noninterest income (loss):
Service charges on deposits 2,794 2,518 2,500
ATM and debit card 852 856 752
Broker-dealer fees and commissions 363 401 459
Loan servicing 112 232 186
Company owned life insurance 223 27 19
Net gain on sale of loans held for
sale 48 92 164
Net gain on sale of other assets 102 115 37
Net gain on investment securities 12 47 173
Impairment charge on investment
securities (34,554) (3,791) --
Other 700 435 454
---------- ---------- ----------
Total noninterest income (loss) (29,348) 932 4,744
---------- ---------- ----------
Noninterest expense:
Salaries and employee benefits 7,021 8,169 8,436
Occupancy and equipment 2,642 2,567 2,580
Professional services 467 480 557
FDIC assessments 236 88 45
Computer and data processing 603 580 581
Supplies and postage 475 437 441
Advertising and promotions 472 283 150
Other 1,493 1,781 1,483
---------- ---------- ----------
Total noninterest expense 13,409 14,385 14,273
---------- ---------- ----------
Income (loss) before income taxes (27,902) 1,376 4,840
Income tax expense (benefit) 524 (255) 1,061
---------- ---------- ----------
Net income (loss) (28,426) 1,631 3,779
========== ========== ==========
Preferred stock dividends 371 370 371
---------- ---------- ----------
Net income (loss) applicable to
common shareholders (28,797) 1,261 3,408
========== ========== ==========
STOCK AND RELATED PER SHARE DATA
Net income (loss) per share -
basic $ (2.68) 0.12 0.31
Net income (loss) per share -
diluted $ (2.68) 0.12 0.31
Cash dividends declared on
common stock $ 0.15 0.15 0.14
Common dividend payout ratio (3) NA 125.00 45.16
Dividend yield (annualized) 2.98 3.76 2.97
Stock price (Nasdaq:FISI):
High $ 22.50 20.00 20.78
Low $ 14.82 15.25 15.10
Close $ 20.01 16.06 18.95
2009 2008
---------- ----------------------
First Year ended Fourth
Quarter Dec. 31, Quarter
---------- ---------- ----------
SELECTED AVERAGE BALANCES
(Amounts in thousands)
Federal funds sold and interest-
bearing deposits $ 43,618 26,568 17,089
Investment securities (4) 601,199 721,551 666,917
Loans (5):
Commercial 165,688 149,927 158,517
Commercial real estate 268,749 247,475 253,179
Agriculture 42,690 45,035 44,299
Residential real estate 174,659 171,262 175,200
Consumer indirect 267,360 185,197 244,891
Consumer direct and home equity 221,024 224,343 222,235
---------- ---------- ----------
Total loans 1,140,170 1,023,239 1,098,321
Total interest-earning assets 1,787,470 1,772,179 1,782,938
Goodwill 37,369 37,369 37,369
Total assets 1,963,764 1,905,345 1,924,174
Interest-bearing liabilities:
Interest-bearing demand 360,470 347,702 360,970
Savings and money market 371,738 369,926 373,034
Certificates of deposit 668,041 617,381 629,111
Borrowings 71,363 91,715 105,164
---------- ---------- ----------
Total interest-bearing
liabilities 1,471,612 1,426,724 1,468,279
Noninterest-bearing demand
deposits 281,690 280,467 284,643
Total deposits 1,681,939 1,615,476 1,647,758
Total liabilities 1,772,377 1,722,440 1,766,239
Shareholders' equity 191,387 182,905 157,935
Common equity (1) 138,281 164,454 136,887
Tangible common equity (2) $ 100,660 126,643 99,191
Common shares outstanding:
Basic 10,716 10,818 10,717
Diluted 10,747 10,818 10,717
SELECTED AVERAGE YIELDS/
RATES AND RATIOS
(Tax equivalent basis)
Federal funds sold and interest-
bearing deposits 0.25% 2.33 1.09
Investment securities 4.54% 4.84 4.72
Loans 6.04% 6.61 6.35
Total interest-earning assets 5.39% 5.83 5.69
Interest-bearing demand 0.25% 0.93 0.69
Savings and money market 0.27% 1.02 0.68
Certificates of deposit 2.76% 3.62 3.09
Borrowings 4.21% 4.65 4.23
Total interest-bearing
liabilities 1.59% 2.36 1.97
Net interest rate spread 3.80% 3.47 3.72
Net interest rate margin 4.09% 3.93 4.07
Net income (loss) (annualized
returns on):
Average assets 0.61% (1.37) (0.65)
Average equity 6.29% (14.30) (7.91)
Average common equity (6) 6.01% (16.84) (10.37)
Average tangible common equity
(7) 8.25% (21.87) (14.31)
Efficiency ratio (8) 69.72% 64.07 66.65
ASSET QUALITY DATA
(Dollar amounts in thousands)
Nonaccrual loans $ 8,826 8,189 8,189
Accruing loans past due 90 days
or more 301 7 7
---------- ---------- ----------
Total non-performing loans 9,127 8,196 8,196
Foreclosed assets 877 1,007 1,007
Non-performing investment
securities 3,396 49 49
---------- ---------- ----------
Total non-performing assets $ 13,400 9,252 9,252
========== ========== ==========
Net loan charge-offs $ 998 3,323 1,257
Net charge-offs to average loans
(annualized) 0.35% 0.32 0.46
Total non-performing loans to
total loans 0.79% 0.73 0.73
Total non-performing assets to
total assets 0.66% 0.48 0.48
Allowance for loan losses to
total loans 1.70% 1.67 1.67
Allowance for loan losses to
non-performing loans 215% 229 229
2008
----------------------------------
Third Second First
Quarter Quarter Quarter
---------- ---------- ----------
SELECTED AVERAGE BALANCES
(Amounts in thousands)
Federal funds sold and interest-
bearing deposits 12,897 35,733 40,807
Investment securities (4) 721,419 744,648 753,823
Loans (5):
Commercial 150,373 150,380 140,340
Commercial real estate 246,746 244,688 245,232
Agriculture 45,965 44,504 45,373
Residential real estate 173,175 169,925 166,682
Consumer indirect 200,586 156,728 137,756
Consumer direct and home equity 222,241 223,906 229,035
---------- ---------- ----------
Total loans 1,039,086 990,131 964,418
Total interest-earning assets 1,774,201 1,771,801 1,759,635
Goodwill 37,369 37,369 37,369
Total assets 1,908,577 1,897,514 1,890,874
Interest-bearing liabilities:
Interest-bearing demand 342,188 342,463 345,102
Savings and money market 366,449 378,799 361,425
Certificates of deposit 591,025 615,950 633,599
Borrowings 118,023 73,902 69,335
---------- ---------- ----------
Total interest-bearing
liabilities 1,417,685 1,411,114 1,409,461
Noninterest-bearing demand
deposits 294,136 275,570 267,322
Total deposits 1,593,798 1,612,782 1,607,448
Total liabilities 1,727,473 1,702,211 1,693,300
Shareholders' equity 181,104 195,303 197,574
Common equity (1) 163,527 177,722 179,993
Tangible common equity (2) 125,754 139,872 142,067
Common shares outstanding:
Basic 10,738 10,879 10,938
Diluted 10,738 10,928 10,975
SELECTED AVERAGE YIELDS/
RATES AND RATIOS
(Tax equivalent basis)
Federal funds sold and interest-
bearing deposits 2.10 2.18 3.06
Investment securities 4.66 4.92 5.05
Loans 6.52 6.65 6.97
Total interest-earning assets 5.73 5.83 6.05
Interest-bearing demand 0.86 0.89 1.30
Savings and money market 0.93 1.02 1.47
Certificates of deposit 3.33 3.72 4.31
Borrowings 4.30 5.05 5.51
Total interest-bearing
liabilities 2.19 2.38 2.91
Net interest rate spread 3.54 3.45 3.14
Net interest rate margin 3.98 3.94 3.73
Net income (loss) (annualized
returns on):
Average assets (5.93) 0.35 0.80
Average equity (62.44) 3.36 7.69
Average common equity (6) (70.06) 2.85 7.62
Average tangible common equity
(7) (91.10) 3.63 9.65
Efficiency ratio (8) 58.10 64.21 67.64
ASSET QUALITY DATA
(Dollar amounts in thousands)
Nonaccrual loans 7,609 6,254 7,353
Accruing loans past due 90 days
or more 32 1 2
---------- ---------- ----------
Total non-performing loans 7,641 6,255 7,355
Foreclosed assets 1,009 1,235 1,257
Non-performing investment
securities -- -- --
---------- ---------- ----------
Total non-performing assets 8,650 7,490 8,612
========== ========== ==========
Net loan charge-offs 509 869 687
Net charge-offs to average loans
(annualized) 0.20 0.35 0.29
Total non-performing loans to
total loans 0.71 0.62 0.76
Total non-performing assets to
total assets 0.44 0.40 0.45
Allowance for loan losses to
total loans 1.62 1.59 1.60
Allowance for loan losses to
non-performing loans 228 256 211
--------
(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 adjusted 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.