WARSAW, N.Y., Jan. 29, 2018 (GLOBE NEWSWIRE) --
Financial Institutions, Inc. (NASDAQ:FISI), today reported financial and operational results for the fourth
quarter and year ended December 31, 2017. Financial Institutions, Inc. (the “Company”) is the parent company of Five Star Bank (the
“Bank”), Scott Danahy Naylon, LLC (“Scott Danahy Naylon” or “SDN”) and Courier Capital, LLC (“Courier Capital”).
Net income for the quarter was $11.1 million compared to $8.3 million for the third quarter of 2017 and $8.7
million for the fourth quarter of 2016. After preferred dividends, net income available to common shareholders was $10.7 million,
or $0.68 per diluted share, compared to $7.9 million, or $0.52 per diluted share, for the third quarter of 2017 and $8.3 million,
or $0.57 per diluted share, for the fourth quarter of 2016.
Net income for the full year 2017 was $33.5 million compared to $31.9 million for 2016. Net income available to
common shareholders was $32.1 million, or $2.13 per diluted share, compared to $30.5 million, or $2.10 per diluted share, for the
full year 2016.
Results for the fourth quarter and full year were positively impacted by an estimated $2.9 million reduction in
income tax expense due to the Tax Cuts and Jobs Act (the “TCJ Act”), primarily driven by a revaluation adjustment to the net
deferred tax liability. On December 22, 2017, the TCJ Act was signed into law which, among other items, reduces the federal
statutory corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. The impact from tax reform may differ from
this estimate due to, among other things, changes in interpretations and assumptions or further guidance that may be issued.
President and Chief Executive Officer Martin K. Birmingham stated, “In 2017, we delivered solid financial
results in a challenging interest rate environment and took several important actions that position us for continued growth and
improved profitability in 2018. We completed an at-the-market equity offering (“ATM Offering”) that generated $38.3 million in net
proceeds, positioning the Company for future growth; added eight mortgage loan officers plus underwriting and servicing support
staff, significantly expanding our residential mortgage lending capacity; and acquired a Buffalo-area wealth management firm,
furthering our strategy to increase fee-based noninterest income. We also surpassed $4 billion in total assets during the year, a
significant milestone for us, achieved through collective teamwork and the successful execution of our long-term strategy.
“We understand that our success is directly linked to the success of our communities. Accordingly, we are
committed to investing in and supporting the communities we serve — through volunteer activities, charitable investments and
product offerings. In furtherance of this commitment, in 2017 we added a Community Development Officer to coordinate and provide
strategic direction for Five Star Bank’s Community Reinvestment Act initiatives and outreach programs throughout our footprint. In
addition, two Community Development Loan Officers joined our organization last year to increase access to residential loans and
low-cost deposit product opportunities in low-to-moderate income neighborhoods and promote financial literacy workshops.
“Recent tax reform will reduce our federal income tax rate in 2018 and provide opportunities to strengthen
relationships with our most valued partners ‒ our employees, our customers and the communities in which we operate. The first
action taken was a one-time award of $500 to employees not covered by certain incentive programs. Approximately 70% of our
employees will receive this award, and they will also be eligible to participate in a new profit-sharing program to be based on the
Company’s 2018 performance.”
Fourth Quarter and Full Year 2017 Highlights:
- Diluted earnings per share (“EPS”) for the quarter of $0.68 was $0.11 higher than the fourth quarter of 2016
- EPS for the year of $2.13 was $0.03 higher than 2016
- Net interest income for the quarter of $29.8 million increased $3.0 million, or 11.4%, as compared to the fourth quarter of
2016
- Net interest income for the year of $112.6 million increased $9.9 million, or 9.7%, as compared to 2016
- Return on average common equity was 11.88% for the quarter and 9.68% for the year
- Return on average tangible common equity was 15.03% for the quarter and 12.51% for the year**
- Net interest margin was 3.25% for the quarter, an increase of three basis points from the fourth quarter of 2016
- Net interest margin for the year was 3.21%, a decrease of three basis points from 2016
- Total assets, interest-earning assets, loans and deposits reached record-high year-end levels:
- Total assets increased $394.9 million in 2017, to $4.11 billion
- Total interest-earning assets increased $354.1 million in 2017, to $3.78 billion
- Total loans increased $394.9 million in 2017, to $2.74 billion
- Total deposits increased $215.0 million in 2017, to $3.21 billion
- The Company declared a quarterly cash dividend of $0.22 per common share, a 5% increase from the most recent quarterly cash
dividend. This dividend represented a 2.81% annualized dividend yield as of December 31, 2017, and a return of 32% of fourth
quarter net income to common shareholders
- The Company completed its ATM Offering during the quarter and sold 294,329 shares of common stock, generating $9.0 million of
gross proceeds ($8.6 million of net proceeds)
- In 2017, approximately 1.4 million shares of common stock were sold under the ATM Offering, generating $40.0 million of
gross proceeds ($38.3 million of net proceeds)
Chief Financial Officer Kevin B. Klotzbach said, “Key components of our long-term strategy are loan and deposit
growth with continued expense discipline and a solid credit culture. We continued to deliver on these strategies in 2017 as
demonstrated by total loan growth of 16.9%, non-public deposit growth of 8.6%, an efficiency ratio of 60.65%, a net charge-offs to
average loans ratio of 0.38%, and a non-performing assets to total assets ratio of 0.31%.
“Proceeds from the equity offering boosted our tangible common equity to tangible assets ratio to
7.17%** at year-end. As a result, we are well-positioned to support loan growth for the foreseeable future.”
“At-The-Market” Offering of Common Stock
On May 30, 2017, the Company announced an ATM Offering program under which it could sell up to $40.0 million of
common stock. The program was completed in November 2017. The Company sold 1,363,964 shares of common stock under the program at a
weighted average price of $29.33, representing gross proceeds of $40.0 million. Net proceeds received were $38.3 million. The
Company expects to use these net proceeds to support organic growth and other general corporate purposes, including contributing
capital to its banking subsidiary, Five Star Bank.
Net Interest Income and Net Interest Margin
Net interest income was $29.8 million in the fourth quarter of 2017, $1.3 million higher than the third quarter
of 2017 and $3.0 million higher than the fourth quarter of 2016.
- Average interest-earning assets for the quarter were $3.74 billion, $70.6 million higher than the third quarter of 2017 and
$331.6 million higher than the fourth quarter of 2016. The primary driver of the increase was organic loan growth.
- Net interest margin was 3.25%, eight basis points higher than the third quarter of 2017 and three basis points higher than
the fourth quarter of 2016. Net interest margin for the quarter was positively impacted by approximately $300 thousand of fee
income comprised of yield maintenance fees relating to prepayment of mortgage-backed securities and payment deferral program
fees.
Net interest income was $112.6 million for the year 2017, $9.9 million higher than 2016. The increase was
primarily the result of a $339.5 million, or 10.4%, increase in average interest-earning assets, partially offset by a
three-basis-point narrowing of the net interest margin ‒ to 3.21% in 2017 from 3.24% in 2016.
Noninterest Income
Noninterest income was $9.0 million in the fourth quarter of 2017 as compared to $8.6 million in the third
quarter of 2017 and $9.1 million in the fourth quarter of 2016.
- Excluding the net gain on investment securities from all periods, noninterest income was $8.3 million, $63 thousand lower
than $8.4 million in the third quarter of 2017, and $492 thousand lower than $8.8 million in the fourth quarter of 2016.
- Investment advisory fees were $250 thousand higher than the third quarter of 2017 and $473 thousand higher than the fourth
quarter of 2016 primarily because of the third quarter acquisition of the assets of Robshaw & Julian Associates, Inc., a
Buffalo-area wealth management firm.
- Insurance income was $274 thousand lower than the third quarter of 2017, consistent with historic seasonality, and $80
thousand higher than the fourth quarter of 2016.
- Noninterest income in the fourth quarter of 2016 included a $1.2 million non-cash fair value adjustment of the contingent
consideration liability relating to SDN.
Noninterest income was $34.7 million for the year 2017 as compared to $35.8 million in 2016.
- Excluding the net gain on investment securities from both periods, noninterest income was $33.5 million in 2017, $405
thousand higher than 2016.
- The increase was primarily the result of an $896 thousand increase in investment advisory income, a $303 thousand increase in
FHLB & FRB stock dividends, and the recognition of a $131 thousand fair value adjustment to derivative financial instruments,
partially offset by $911 thousand of non-recurring death benefit proceeds from company owned life insurance in 2016.
Noninterest Expense
Noninterest expense was $23.2 million in the fourth quarter of 2017 as compared to $22.5 million in the third
quarter of 2017 and $20.7 million in the fourth quarter of 2016.
- The increase from the third quarter of 2017 was primarily the result of higher salaries related to organic growth initiatives
and an increase in advertising and promotions expense related to development of a rebranding initiative to be launched in the
first quarter of 2018.
- The increase from the fourth quarter of 2016 was the result of higher salaries and employee benefits related to organic
growth initiatives, higher healthcare costs largely attributable to the high cost of specialty pharmaceuticals; higher occupancy
and equipment expense related to 2016 and 2017 branch openings and relocation of the Rochester regional administration center;
higher computer and data processing expense in connection with technology upgrades; and an increase in advertising and promotions
expense as described above.
Noninterest expense was $90.5 million for the year, a $5.8 million increase from $84.7 million in 2016. The increase was a
result of the factors described above in addition to a $1.6 million non-cash goodwill impairment charge relating to SDN, partially
offset by a $1.7 million decrease in professional services expense.
Income Taxes
Income tax expense was $580 thousand in the fourth quarter of 2017 as compared to $3.5 million in the third
quarter of 2017 and $3.0 million in the fourth quarter of 2016. The effective tax rate was 5.0% for the quarter as compared to
29.5% in the third quarter of 2017 and 25.9% in the fourth quarter of 2016.
- The decrease in income tax expense and lower effective tax rate was the result of an estimated $2.9 million reduction in
income tax expense due to the TCJ Act, primarily driven by a revaluation adjustment to the net deferred tax liability.
Income tax expense for 2017 was $9.9 million, representing an effective tax rate of 22.9% as compared to the effective tax rate
of 27.7% in 2016.
- Effective tax rates are impacted by items of income and expense not subject to federal or state taxation. The Company’s
effective tax rates differ from statutory rates primarily because of interest income from tax-exempt securities, earnings on
company owned life insurance, the non-cash fair value adjustment of the contingent consideration liability associated with the
SDN acquisition, the 2017 non-cash goodwill impairment charge related to SDN and, in 2017, the net impact of the TCJ Act, as
described above.
Balance Sheet and Capital Management
Total assets were $4.11 billion at December 31, 2017, up $83.6 million from $4.02 billion at September 30, 2017,
and up $394.9 million from $3.71 billion at December 31, 2016. The increases were the result of loan growth funded by deposit
growth, short-term borrowings and proceeds from the ATM Offering.
Total loans were $2.74 billion at December 31, 2017, up $118.8 million, or 4.5%, from September 30, 2017, and up
$394.9 million, or 16.9%, from December 31, 2016.
- Commercial business loans totaled $450.3 million, up $30.9 million, or 7.4%, from September 30, 2017, and up $100.8 million,
or 28.8%, from December 31, 2016.
- Commercial mortgage loans totaled $808.9 million, up $50.9 million, or 6.7%, from September 30, 2017, and up $138.9 million,
or 20.7%, from December 31, 2016.
- Residential real estate loans totaled $465.3 million, up $19.2 million, or 4.3%, from September 30, 2017, and up $37.3
million, or 8.7%, from December 31, 2016.
- Consumer indirect loans totaled $876.6 million, up $19.0 million, or 2.2%, from September 30, 2017, and up $124.1 million, or
16.5%, from December 31, 2016.
Total deposits were $3.21 billion at December 31, 2017, a decrease of $71.3 million from September 30, 2017, and
an increase of $215.0 million from December 31, 2016. The decrease from September 30, 2017, was primarily due to public deposit
seasonality. The increase from December 31, 2016, was primarily the result of successful business development efforts in both
municipal and retail banking. Public deposit balances represented 26% of total deposits at December 31, 2017, compared to 28% at
September 30, 2017 and 27% at December 31, 2016.
Short-term borrowings were $446.2 million at December 31, 2017, up $135.4 million from September 30, 2017, and
up $114.7 million from December 31, 2016. Short-term borrowings are typically utilized to manage the seasonality of public
deposits; however, they were also a funding source for loans in 2017.
Shareholders’ equity was $381.2 million at December 31, 2017, compared to $366.0 million at September 30, 2017,
and $320.1 million at December 31, 2016. Common book value per share was $22.85 at December 31, 2017, an increase of $0.54 or 2.4%
from $22.31 at September 30, 2017, and an increase of $2.03 or 9.8% from $20.82 at December 31, 2016. The increases in
shareholders’ equity and common book value per share are attributable to common stock issued through the ATM Offering plus net
income less dividends paid, net of the change in unrealized gain (loss) on investment securities.
During the fourth quarter of 2017, the Company declared a common stock dividend of $0.22 per common share, an
increase of 5% from the most recent quarterly cash dividend. This dividend returned 32% of fourth quarter net income to common
shareholders.
Most of the Company’s regulatory capital ratios at December 31, 2017, were higher than the prior quarter and
prior year as a result of capital raised in the 2017 ATM Offering:
- Leverage Ratio was 8.13%, compared to 7.91% and 7.36% at September 30, 2017, and December 31, 2016, respectively.
- Common Equity Tier 1 Ratio was 10.16%, compared to 10.09% and 9.59% at September 30, 2017, and December 31, 2016,
respectively.
- Tier 1 Risk-Based Capital was 10.74%, compared to 10.69% and 10.26% at September 30, 2017, and December 31, 2016,
respectively.
- Total Risk-Based Capital was 13.19%, compared to 13.24% and 12.97% at September 30, 2017, and December 31, 2016,
respectively.
Credit Quality
Non-performing loans were $12.5 million at December 31, 2017, compared to $12.6 million at September 30, 2017,
and $6.3 million at December 31, 2016. The ratio of non-performing loans to total loans was 0.46% at December 31, 2017; 0.48% at
September 30, 2017; and 0.27% at December 31, 2016. The 2016 ratio of 0.27% was at the bottom of the Company’s 10-year historical
range of 0.27% to 0.91%.
Provision for loan losses was $3.9 million for the fourth quarter, an increase of $1.1 million from the third
quarter of 2017 and an increase of $589 thousand from the fourth quarter of 2016. For the year 2017, provision for loan losses
totaled $13.4 million, an increase of $3.7 million from 2016. Significant factors impacting the provision for loan losses:
- Net charge-offs were $3.6 million during the quarter, $2.0 million higher than the third quarter of 2017 and $1.8 million
higher than the fourth quarter of 2016. The ratio of annualized net charge-offs to total average loans was 0.54% in the quarter;
0.25% in the third quarter of 2017; and 0.30% in the fourth quarter of 2016. For the year 2017, net charge-offs were 0.38% as
compared to 0.26% in 2016. The Company’s ten-year average for net charge-offs was 0.39%.
- Allowances are established for loan losses on a portfolio basis, therefore, as the loan portfolio increases the allowance and
provision increase. Approximately $1.5 million of the fourth quarter provision and $5.1 million of the full year provision relate
to 2017 loan growth.
The ratio of allowance for loan losses to total loans was 1.27% at December 31, 2017; 1.31% at September 30,
2017; and 1.32% at December 31, 2016.
Conference Call
The Company will host an earnings conference call and audio webcast on January 30, 2018 at 8:30 a.m. Eastern
Time. The call will be hosted by Martin K. Birmingham, President and Chief Executive Officer, and Kevin B. Klotzbach, Chief
Financial Officer. The live webcast will be available in listen-only mode on the Company’s website at www.fiiwarsaw.com. Within the United States, listeners may also access the call by dialing
1-888-317-6016 and requesting the Financial Institutions, Inc. (FISI) call. The webcast replay will be available on the
Company’s website for at least 30 days.
About Financial Institutions, Inc.
Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank,
Scott Danahy Naylon and Courier Capital. Five Star Bank provides a wide range of consumer and commercial banking and lending
services to individuals, municipalities and businesses through a network of more than 50 offices throughout Western and Central New
York State. Scott Danahy Naylon provides a broad range of insurance services to personal and business clients across 45
states. Courier Capital provides customized investment management, investment consulting and retirement plan services to
individuals, businesses, institutions, foundations and retirement plans. Financial Institutions, Inc. and its subsidiaries employ
approximately 650 individuals. The Company’s stock is listed on the NASDAQ Global Select Market under the symbol
FISI. Additional information is available at www.fiiwarsaw.com.
Non-GAAP Financial Information
This news release contains disclosure regarding tangible assets, tangible common equity, tangible common equity
to tangible assets, tangible common book value per share, average tangible assets, average tangible common equity, and return on
average tangible common equity, which are determined by methods other than in accordance with U.S. generally accepted accounting
principles (“GAAP”). The Company believes that these non-GAAP measures are useful to our investors as measures of the strength of
the Company’s capital and ability to generate earnings on tangible common equity invested by our shareholders. These non-GAAP
measures provide supplemental information that may help investors to analyze our capital position without regard to the effects of
intangible assets. Non-GAAP financial measures have inherent limitations and are not uniformly applied by issuers. Therefore, these
non-GAAP financial measures should not be considered in isolation, or as a substitute for comparable measures prepared in
accordance with GAAP. The comparable GAAP financial measures and reconciliation to the comparable GAAP financial measures can
be found in Appendix A to this document.
Safe Harbor Statement
This press release may contain forward-looking statements as defined by Section 21E of the Securities
Exchange Act of 1934, as amended, that involve significant risks and uncertainties. Statements herein are based on certain
assumptions and analyses by the Company and are factors it believes are appropriate in the circumstances. Actual results could
differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited
to: the Company’s ability to implement its strategic plan, the Company’s ability to redeploy investment assets into loan
assets, whether the Company experiences greater credit losses than expected, whether the Company experiences breaches of its, or
third party, information systems, the attitudes and preferences of the Company’s customers, the Company’s ability to successfully
integrate and profitably operate Scott Danahy Naylon, Courier Capital and other acquisitions, the accuracy of estimates and
assumptions used to revalue our deferred tax liability, the competitive environment, fluctuations in the fair value of securities
in its investment portfolio, changes in the regulatory environment and the Company’s compliance with regulatory requirements,
changes in interest rates, general economic and credit market conditions nationally and regionally. Consequently, all
forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s
Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the SEC. 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 |
|
Shelly J. Doran |
|
Chief Financial Officer & Treasurer |
|
Director − Investor & External Relations |
Phone: 585.786.1130 |
|
Phone: 585.627.1362 |
|
Email: KBKlotzbach@five-starbank.com |
|
Email: SJDoran@five-starbank.com |
|
|
|
|
|
** See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.
|
FINANCIAL INSTITUTIONS, INC. |
Selected Financial Information (Unaudited) |
(Amounts in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
December
31, |
|
September
30, |
|
June 30, |
|
March
31, |
|
December
31, |
SELECTED BALANCE SHEET DATA: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$99,195 |
|
|
$97,838 |
|
|
$84,537 |
|
|
$149,699 |
|
|
$71,277 |
|
Investment securities: |
|
|
|
|
|
|
|
|
|
Available for sale |
|
524,973 |
|
|
|
551,491 |
|
|
|
540,575 |
|
|
|
540,406 |
|
|
|
539,926 |
|
Held-to-maturity |
|
516,466 |
|
|
|
538,332 |
|
|
|
533,471 |
|
|
|
545,381 |
|
|
|
543,338 |
|
Total investment securities |
|
1,041,439 |
|
|
|
1,089,823 |
|
|
|
1,074,046 |
|
|
|
1,085,787 |
|
|
|
1,083,264 |
|
Loans held for sale |
|
2,718 |
|
|
|
2,407 |
|
|
|
1,864 |
|
|
|
2,097 |
|
|
|
1,050 |
|
Loans: |
|
|
|
|
|
|
|
|
|
Commercial business |
|
450,326 |
|
|
|
419,415 |
|
|
|
398,343 |
|
|
|
375,518 |
|
|
|
349,547 |
|
Commercial mortgage |
|
808,908 |
|
|
|
757,987 |
|
|
|
724,064 |
|
|
|
675,007 |
|
|
|
670,058 |
|
Residential real estate loans |
|
465,283 |
|
|
|
446,044 |
|
|
|
432,053 |
|
|
|
428,171 |
|
|
|
427,937 |
|
Residential real estate lines |
|
116,309 |
|
|
|
117,621 |
|
|
|
118,611 |
|
|
|
120,874 |
|
|
|
122,555 |
|
Consumer indirect |
|
876,570 |
|
|
|
857,528 |
|
|
|
826,708 |
|
|
|
786,120 |
|
|
|
752,421 |
|
Other consumer |
|
17,621 |
|
|
|
17,640 |
|
|
|
17,093 |
|
|
|
16,937 |
|
|
|
17,643 |
|
Total loans |
|
2,735,017 |
|
|
|
2,616,235 |
|
|
|
2,516,872 |
|
|
|
2,402,627 |
|
|
|
2,340,161 |
|
Allowance for loan losses |
|
34,672 |
|
|
|
34,347 |
|
|
|
33,159 |
|
|
|
31,081 |
|
|
|
30,934 |
|
Total loans, net |
|
2,700,345 |
|
|
|
2,581,888 |
|
|
|
2,483,713 |
|
|
|
2,371,546 |
|
|
|
2,309,227 |
|
Total interest-earning assets |
|
3,782,659 |
|
|
|
3,708,385 |
|
|
|
3,593,106 |
|
|
|
3,523,613 |
|
|
|
3,428,541 |
|
Goodwill and other intangible assets, net |
|
74,703 |
|
|
|
74,997 |
|
|
|
73,477 |
|
|
|
75,343 |
|
|
|
75,640 |
|
Total assets |
|
4,105,210 |
|
|
|
4,021,591 |
|
|
|
3,891,538 |
|
|
|
3,859,865 |
|
|
|
3,710,340 |
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
718,498 |
|
|
|
710,865 |
|
|
|
677,124 |
|
|
|
666,332 |
|
|
|
677,076 |
|
Interest-bearing demand |
|
634,203 |
|
|
|
656,703 |
|
|
|
631,451 |
|
|
|
698,962 |
|
|
|
581,436 |
|
Savings and money market |
|
1,005,317 |
|
|
|
1,050,487 |
|
|
|
999,125 |
|
|
|
1,069,901 |
|
|
|
1,034,194 |
|
Time deposits |
|
852,156 |
|
|
|
863,453 |
|
|
|
824,786 |
|
|
|
734,464 |
|
|
|
702,516 |
|
Total deposits |
|
3,210,174 |
|
|
|
3,281,508 |
|
|
|
3,132,486 |
|
|
|
3,169,659 |
|
|
|
2,995,222 |
|
Short-term borrowings |
|
446,200 |
|
|
|
310,800 |
|
|
|
347,500 |
|
|
|
303,300 |
|
|
|
331,500 |
|
Long-term borrowings, net |
|
39,131 |
|
|
|
39,114 |
|
|
|
39,096 |
|
|
|
39,078 |
|
|
|
39,061 |
|
Total interest-bearing liabilities |
|
2,977,007 |
|
|
|
2,920,557 |
|
|
|
2,841,958 |
|
|
|
2,845,705 |
|
|
|
2,688,707 |
|
Shareholders’ equity |
|
381,177 |
|
|
|
366,002 |
|
|
|
347,641 |
|
|
|
325,688 |
|
|
|
320,054 |
|
Common shareholders’ equity |
|
363,848 |
|
|
|
348,668 |
|
|
|
330,301 |
|
|
|
308,348 |
|
|
|
302,714 |
|
Tangible common equity (1) |
|
289,145 |
|
|
|
273,671 |
|
|
|
256,824 |
|
|
|
233,005 |
|
|
|
227,074 |
|
Unrealized (loss) gain on investment securities, net of tax |
$(2,173 |
) |
|
$17 |
|
|
$(232 |
) |
|
$(1,938 |
) |
|
$(2,530 |
) |
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
15,925 |
|
|
|
15,626 |
|
|
|
15,127 |
|
|
|
14,536 |
|
|
|
14,538 |
|
Treasury shares |
|
131 |
|
|
|
136 |
|
|
|
137 |
|
|
|
156 |
|
|
|
154 |
|
CAPITAL RATIOS AND PER SHARE DATA: |
|
|
|
|
|
|
|
|
Leverage ratio |
|
8.13 |
% |
|
|
7.91 |
% |
|
|
7.70 |
% |
|
|
7.30 |
% |
|
|
7.36 |
% |
Common equity Tier 1 ratio |
|
10.16 |
% |
|
|
10.09 |
% |
|
|
9.86 |
% |
|
|
9.46 |
% |
|
|
9.59 |
% |
Tier 1 risk-based capital |
|
10.74 |
% |
|
|
10.69 |
% |
|
|
10.48 |
% |
|
|
10.11 |
% |
|
|
10.26 |
% |
Total risk-based capital |
|
13.19 |
% |
|
|
13.24 |
% |
|
|
13.09 |
% |
|
|
12.75 |
% |
|
|
12.97 |
% |
Common equity to assets |
|
8.86 |
% |
|
|
8.67 |
% |
|
|
8.49 |
% |
|
|
7.99 |
% |
|
|
8.16 |
% |
Tangible common equity to tangible assets (1) |
|
7.17 |
% |
|
|
6.93 |
% |
|
|
6.73 |
% |
|
|
6.16 |
% |
|
|
6.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common book value per share |
$22.85 |
|
|
$22.31 |
|
|
$21.84 |
|
|
$21.21 |
|
|
$20.82 |
|
Tangible common book value per share (1) |
$18.16 |
|
|
$17.51 |
|
|
$16.98 |
|
|
$16.03 |
|
|
$15.62 |
|
Stock price (Nasdaq: FISI): |
|
|
|
|
|
|
|
|
|
|
|
High |
$34.10 |
|
|
$31.15 |
|
|
$35.35 |
|
|
$35.40 |
|
|
$34.55 |
|
Low |
$28.70 |
|
|
$25.65 |
|
|
$29.09 |
|
|
$30.50 |
|
|
$25.98 |
|
Close |
$31.10 |
|
|
$28.80 |
|
|
$29.80 |
|
|
$32.95 |
|
|
$34.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________
(1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.
|
FINANCIAL INSTITUTIONS, INC. |
Selected Financial Information (Unaudited) |
(Amounts in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Years ended |
|
2017 |
|
2016 |
|
December
31, |
|
Fourth |
|
Third |
|
Second |
|
First |
|
Fourth |
|
2017 |
|
2016 |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
SELECTED INCOME STATEMENT DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$130,110 |
|
|
$115,231 |
|
|
$34,767 |
|
|
$33,396 |
|
|
$31,409 |
|
|
$30,538 |
|
|
$29,990 |
|
Interest expense |
|
17,495 |
|
|
|
12,541 |
|
|
|
5,007 |
|
|
|
4,958 |
|
|
|
3,987 |
|
|
|
3,543 |
|
|
|
3,268 |
|
Net interest income |
|
112,615 |
|
|
|
102,690 |
|
|
|
29,760 |
|
|
|
28,438 |
|
|
|
27,422 |
|
|
|
26,995 |
|
|
|
26,722 |
|
Provision for loan losses |
|
13,361 |
|
|
|
9,638 |
|
|
|
3,946 |
|
|
|
2,802 |
|
|
|
3,832 |
|
|
|
2,781 |
|
|
|
3,357 |
|
Net interest income after provision |
|
|
|
|
|
|
|
|
|
|
|
|
|
for loan losses |
|
99,254 |
|
|
|
93,052 |
|
|
|
25,814 |
|
|
|
25,636 |
|
|
|
23,590 |
|
|
|
24,214 |
|
|
|
23,365 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
|
7,391 |
|
|
|
7,280 |
|
|
|
1,905 |
|
|
|
1,901 |
|
|
|
1,840 |
|
|
|
1,745 |
|
|
|
1,888 |
|
Insurance income |
|
5,266 |
|
|
|
5,396 |
|
|
|
1,214 |
|
|
|
1,488 |
|
|
|
1,133 |
|
|
|
1,431 |
|
|
|
1,134 |
|
ATM and debit card |
|
5,721 |
|
|
|
5,687 |
|
|
|
1,491 |
|
|
|
1,445 |
|
|
|
1,456 |
|
|
|
1,329 |
|
|
|
1,500 |
|
Investment advisory |
|
6,104 |
|
|
|
5,208 |
|
|
|
1,747 |
|
|
|
1,497 |
|
|
|
1,429 |
|
|
|
1,431 |
|
|
|
1,274 |
|
Company owned life insurance |
|
1,781 |
|
|
|
2,808 |
|
|
|
414 |
|
|
|
449 |
|
|
|
473 |
|
|
|
445 |
|
|
|
468 |
|
Investments in limited partnerships |
|
110 |
|
|
|
300 |
|
|
|
19 |
|
|
|
(14 |
) |
|
|
135 |
|
|
|
(30 |
) |
|
|
47 |
|
Loan servicing |
|
439 |
|
|
|
436 |
|
|
|
91 |
|
|
|
105 |
|
|
|
123 |
|
|
|
120 |
|
|
|
104 |
|
Net gain on sale of loans held for sale |
|
376 |
|
|
|
240 |
|
|
|
106 |
|
|
|
150 |
|
|
|
72 |
|
|
|
48 |
|
|
38 |
|
Net gain on investment securities |
|
1,260 |
|
|
|
2,695 |
|
|
|
660 |
|
|
|
184 |
|
|
|
210 |
|
|
|
206 |
|
|
|
269 |
|
Net gain (loss) on other assets |
|
37 |
|
|
|
313 |
|
|
|
12 |
|
|
|
21 |
|
|
|
6 |
|
|
|
(2 |
) |
|
|
28 |
|
Contingent consideration liability adjustment |
|
1,200 |
|
|
|
1,170 |
|
|
|
- |
|
|
|
- |
|
|
|
1,200 |
|
|
|
- |
|
|
|
1,170 |
|
Other |
|
5,045 |
|
|
|
4,227 |
|
|
|
1,328 |
|
|
|
1,348 |
|
|
|
1,256 |
|
|
|
1,113 |
|
|
|
1,168 |
|
Total noninterest income |
|
34,730 |
|
|
|
35,760 |
|
|
|
8,987 |
|
|
|
8,574 |
|
|
|
9,333 |
|
|
|
7,836 |
|
|
|
9,088 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
48,675 |
|
|
|
45,215 |
|
|
|
12,972 |
|
|
|
12,348 |
|
|
|
11,986 |
|
|
|
11,369 |
|
|
|
11,458 |
|
Occupancy and equipment |
|
16,293 |
|
|
|
14,529 |
|
|
|
4,058 |
|
|
|
4,087 |
|
|
|
4,184 |
|
|
|
3,964 |
|
|
|
3,623 |
|
Professional services |
|
4,083 |
|
|
|
5,782 |
|
|
|
854 |
|
|
|
1,157 |
|
|
|
1,057 |
|
|
|
1,015 |
|
|
|
844 |
|
Computer and data processing |
|
4,935 |
|
|
|
4,451 |
|
|
|
1,244 |
|
|
|
1,208 |
|
|
|
1,312 |
|
|
|
1,171 |
|
|
|
1,116 |
|
Supplies and postage |
|
2,003 |
|
|
|
2,047 |
|
|
|
507 |
|
|
|
492 |
|
|
|
467 |
|
|
|
537 |
|
|
|
499 |
|
FDIC assessments |
|
1,817 |
|
|
|
1,735 |
|
|
|
451 |
|
|
|
440 |
|
|
|
469 |
|
|
|
457 |
|
|
|
452 |
|
Advertising and promotions |
|
2,171 |
|
|
|
2,097 |
|
|
|
720 |
|
|
|
344 |
|
|
|
645 |
|
|
|
462 |
|
|
|
540 |
|
Amortization of intangibles |
|
1,170 |
|
|
|
1,249 |
|
|
|
294 |
|
|
|
288 |
|
|
|
291 |
|
|
|
297 |
|
|
|
303 |
|
Goodwill impairment |
|
1,575 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,575 |
|
|
|
- |
|
|
|
- |
|
Other |
|
7,791 |
|
|
|
7,566 |
|
|
|
2,063 |
|
|
|
2,103 |
|
|
|
1,955 |
|
|
|
1,670 |
|
|
|
1,880 |
|
Total noninterest expense |
|
90,513 |
|
|
|
84,671 |
|
|
|
23,163 |
|
|
|
22,467 |
|
|
|
23,941 |
|
|
|
20,942 |
|
|
|
20,715 |
|
Income before income taxes |
|
43,471 |
|
|
|
44,141 |
|
|
|
11,638 |
|
|
|
11,743 |
|
|
|
8,982 |
|
|
|
11,108 |
|
|
|
11,738 |
|
Income tax expense |
|
9,945 |
|
|
|
12,210 |
|
|
|
580 |
|
|
|
3,464 |
|
|
|
2,736 |
|
|
|
3,165 |
|
|
|
3,045 |
|
Net income |
|
33,526 |
|
|
|
31,931 |
|
|
|
11,058 |
|
|
|
8,279 |
|
|
|
6,246 |
|
|
|
7,943 |
|
|
|
8,693 |
|
Preferred stock dividends |
|
1,462 |
|
|
|
1,462 |
|
|
|
365 |
|
|
|
366 |
|
|
|
366 |
|
|
|
365 |
|
|
|
365 |
|
Net income available to common shareholders |
$32,064 |
|
|
$30,469 |
|
|
$10,693 |
|
|
$7,913 |
|
|
$5,880 |
|
|
$7,578 |
|
|
$8,328 |
|
FINANCIAL DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – basic |
$2.13 |
|
|
$2.11 |
|
|
$0.68 |
|
|
$0.52 |
|
|
$0.40 |
|
|
$0.52 |
|
|
$0.58 |
|
Earnings per share – diluted |
$2.13 |
|
|
$2.10 |
|
|
$0.68 |
|
|
$0.52 |
|
|
$0.40 |
|
|
$0.52 |
|
|
$0.57 |
|
Cash dividends declared on common stock |
$0.85 |
|
|
$0.81 |
|
|
$0.22 |
|
|
$0.21 |
|
|
$0.21 |
|
|
$0.21 |
|
|
$0.21 |
|
Common dividend payout ratio |
|
39.91 |
% |
|
|
38.39 |
% |
|
|
32.35 |
% |
|
|
40.38 |
% |
|
|
52.50 |
% |
|
|
40.38 |
% |
|
|
36.21 |
% |
Dividend yield (annualized) |
|
2.73 |
% |
|
|
2.37 |
% |
|
|
2.81 |
% |
|
|
2.89 |
% |
|
|
2.83 |
% |
|
|
2.58 |
% |
|
|
2.44 |
% |
Return on average assets |
|
0.86 |
% |
|
|
0.90 |
% |
|
|
1.09 |
% |
|
|
0.83 |
% |
|
|
0.65 |
% |
|
|
0.86 |
% |
|
|
0.94 |
% |
Return on average equity |
|
9.62 |
% |
|
|
10.01 |
% |
|
|
11.72 |
% |
|
|
9.17 |
% |
|
|
7.44 |
% |
|
|
9.94 |
% |
|
|
10.68 |
% |
Return on average common equity |
|
9.68 |
% |
|
|
10.10 |
% |
|
|
11.88 |
% |
|
|
9.21 |
% |
|
|
7.38 |
% |
|
|
10.02 |
% |
|
|
10.81 |
% |
Return on average tangible common equity (1) |
|
12.51 |
% |
|
|
13.51 |
% |
|
|
15.03 |
% |
|
|
11.76 |
% |
|
|
9.65 |
% |
|
|
13.30 |
% |
|
|
14.37 |
% |
Efficiency ratio (2) |
|
60.65 |
% |
|
|
60.95 |
% |
|
|
59.62 |
% |
|
|
59.75 |
% |
|
|
64.10 |
% |
|
|
59.09 |
% |
|
|
56.99 |
% |
Effective tax rate |
|
22.9 |
% |
|
|
27.7 |
% |
|
|
5.0 |
% |
|
|
29.5 |
% |
|
|
30.5 |
% |
|
|
28.5 |
% |
|
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________
(1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the
computation of this Non-GAAP measure.
(2) The efficiency ratio is calculated by dividing noninterest expense by net
revenue, i.e., the sum of net interest income (fully taxable equivalent) and noninterest income before net gains on investment
securities. This is a banking industry measure not required by GAAP.
|
FINANCIAL INSTITUTIONS, INC. |
Selected Financial Information (Unaudited) |
(Amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
Years ended |
|
2017 |
|
2016 |
|
December
31, |
|
Fourth |
|
Third |
|
Second |
|
First |
|
Fourth |
|
2017 |
|
2016 |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
SELECTED AVERAGE BALANCES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold and interest-earning deposits |
$7,060 |
|
|
$3,116 |
|
|
$1,693 |
|
|
|
$- |
|
|
$16,639 |
|
|
$10,078 |
|
|
$12,011 |
|
Investment securities (1) |
|
1,086,300 |
|
|
|
1,063,221 |
|
|
|
1,073,170 |
|
|
|
1,096,374 |
|
|
|
1,085,670 |
|
|
|
1,090,063 |
|
|
|
1,080,941 |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
396,319 |
|
|
|
336,633 |
|
|
|
429,831 |
|
|
|
405,308 |
|
|
|
385,938 |
|
|
|
363,367 |
|
|
|
347,496 |
|
Commercial mortgage |
|
727,849 |
|
|
|
618,436 |
|
|
|
778,765 |
|
|
|
752,634 |
|
|
|
700,010 |
|
|
|
678,613 |
|
|
|
659,713 |
|
Residential real estate loans |
|
438,586 |
|
|
|
404,456 |
|
|
|
455,641 |
|
|
|
438,436 |
|
|
|
430,237 |
|
|
|
429,746 |
|
|
|
425,687 |
|
Residential real estate lines |
|
118,797 |
|
|
|
124,635 |
|
|
|
116,731 |
|
|
|
117,597 |
|
|
|
119,333 |
|
|
|
121,594 |
|
|
|
122,734 |
|
Consumer indirect |
|
819,598 |
|
|
|
703,975 |
|
|
|
865,735 |
|
|
|
841,081 |
|
|
|
802,379 |
|
|
|
767,887 |
|
|
|
741,598 |
|
Other consumer |
|
17,111 |
|
|
|
17,620 |
|
|
|
17,618 |
|
|
|
17,184 |
|
|
|
16,680 |
|
|
|
16,956 |
|
|
|
17,448 |
|
Total loans |
|
2,518,260 |
|
|
|
2,205,755 |
|
|
|
2,664,321 |
|
|
|
2,572,240 |
|
|
|
2,454,577 |
|
|
|
2,378,163 |
|
|
|
2,314,676 |
|
Total interest-earning assets |
|
3,611,620 |
|
|
|
3,272,092 |
|
|
|
3,739,184 |
|
|
|
3,668,614 |
|
|
|
3,556,886 |
|
|
|
3,478,304 |
|
|
|
3,407,628 |
|
Goodwill and other intangible assets, net |
|
74,818 |
|
|
|
76,170 |
|
|
|
74,866 |
|
|
|
73,960 |
|
|
|
74,954 |
|
|
|
75,508 |
|
|
|
75,807 |
|
Total assets |
|
3,896,071 |
|
|
|
3,547,105 |
|
|
|
4,028,063 |
|
|
|
3,951,002 |
|
|
|
3,847,137 |
|
|
|
3,754,470 |
|
|
|
3,679,569 |
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
638,295 |
|
|
|
576,046 |
|
|
|
655,207 |
|
|
|
612,401 |
|
|
|
651,485 |
|
|
|
634,141 |
|
|
|
604,717 |
|
Savings and money market |
|
1,033,836 |
|
|
|
1,010,510 |
|
|
|
1,051,367 |
|
|
|
998,769 |
|
|
|
1,054,997 |
|
|
|
1,030,363 |
|
|
|
1,076,884 |
|
Time deposits |
|
801,394 |
|
|
|
697,654 |
|
|
|
863,770 |
|
|
|
855,371 |
|
|
|
762,874 |
|
|
|
721,404 |
|
|
|
711,061 |
|
Short-term borrowings |
|
338,392 |
|
|
|
248,938 |
|
|
|
316,894 |
|
|
|
385,512 |
|
|
|
323,562 |
|
|
|
327,195 |
|
|
|
244,796 |
|
Long-term borrowings, net |
|
39,094 |
|
|
|
39,023 |
|
|
|
39,121 |
|
|
|
39,103 |
|
|
|
39,085 |
|
|
|
39,067 |
|
|
|
39,050 |
|
Total interest-bearing liabilities |
|
2,851,011 |
|
|
|
2,572,171 |
|
|
|
2,926,359 |
|
|
|
2,891,156 |
|
|
|
2,832,003 |
|
|
|
2,752,170 |
|
|
|
2,676,508 |
|
Noninterest-bearing demand deposits |
|
674,884 |
|
|
|
633,416 |
|
|
|
703,560 |
|
|
|
679,303 |
|
|
|
658,926 |
|
|
|
657,190 |
|
|
|
655,445 |
|
Total deposits |
|
3,148,409 |
|
|
|
2,917,626 |
|
|
|
3,273,904 |
|
|
|
3,145,844 |
|
|
|
3,128,282 |
|
|
|
3,043,098 |
|
|
|
3,048,107 |
|
Total liabilities |
|
3,547,551 |
|
|
|
3,228,099 |
|
|
|
3,653,655 |
|
|
|
3,592,685 |
|
|
|
3,510,410 |
|
|
|
3,430,504 |
|
|
|
3,355,894 |
|
Shareholders’ equity |
|
348,520 |
|
|
|
319,006 |
|
|
|
374,408 |
|
|
|
358,317 |
|
|
|
336,727 |
|
|
|
323,966 |
|
|
|
323,675 |
|
Common equity |
|
331,184 |
|
|
|
301,666 |
|
|
|
357,079 |
|
|
|
340,981 |
|
|
|
319,387 |
|
|
|
306,626 |
|
|
|
306,335 |
|
Tangible common equity (2) |
$256,366 |
|
|
$225,496 |
|
|
$282,213 |
|
|
$267,021 |
|
|
$244,433 |
|
|
$231,118 |
|
|
$230,528 |
|
Common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
15,044 |
|
|
|
14,436 |
|
|
|
15,749 |
|
|
|
15,268 |
|
|
|
14,664 |
|
|
|
14,479 |
|
|
|
14,459 |
|
Diluted |
|
15,085 |
|
|
|
14,491 |
|
|
|
15,793 |
|
|
|
15,302 |
|
|
|
14,702 |
|
|
|
14,528 |
|
|
|
14,511 |
|
SELECTED AVERAGE YIELDS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Tax equivalent basis) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
2.48 |
% |
|
|
2.45 |
% |
|
|
2.53 |
% |
|
2.45 |
% |
|
2.47 |
% |
|
|
2.46 |
% |
|
2.41 |
% |
Loans |
|
4.22 |
% |
|
|
4.18 |
% |
|
|
4.29 |
% |
|
4.24 |
% |
|
4.16 |
% |
|
|
4.19 |
% |
|
4.17 |
% |
Total interest-earning assets |
|
3.69 |
% |
|
|
3.62 |
% |
|
|
3.78 |
% |
|
3.71 |
% |
|
3.63 |
% |
|
|
3.64 |
% |
|
3.60 |
% |
Interest-bearing demand |
|
0.14 |
% |
|
|
0.14 |
% |
|
|
0.14 |
% |
|
0.14 |
% |
|
0.14 |
% |
|
|
0.14 |
% |
|
0.14 |
% |
Savings and money market |
|
0.14 |
% |
|
|
0.13 |
% |
|
|
0.16 |
% |
|
0.15 |
% |
|
0.14 |
% |
|
|
0.13 |
% |
|
0.13 |
% |
Time deposits |
|
1.09 |
% |
|
|
0.90 |
% |
|
|
1.21 |
% |
|
1.15 |
% |
|
1.01 |
% |
|
|
0.95 |
% |
|
0.93 |
% |
Short-term borrowings |
|
1.16 |
% |
|
|
0.65 |
% |
|
|
1.40 |
% |
|
1.29 |
% |
|
1.08 |
% |
|
|
0.86 |
% |
|
0.70 |
% |
Long-term borrowings, net |
|
6.32 |
% |
|
|
6.33 |
% |
|
|
6.32 |
% |
|
6.32 |
% |
|
6.32 |
% |
|
|
6.32 |
% |
|
6.33 |
% |
Total interest-bearing liabilities |
|
0.61 |
% |
|
|
0.49 |
% |
|
|
0.68 |
% |
|
0.68 |
% |
|
0.56 |
% |
|
|
0.52 |
% |
|
0.49 |
% |
Net interest spread |
|
3.08 |
% |
|
|
3.13 |
% |
|
|
3.10 |
% |
|
3.03 |
% |
|
3.07 |
% |
|
|
3.12 |
% |
|
3.11 |
% |
Net interest margin |
|
3.21 |
% |
|
|
3.24 |
% |
|
|
3.25 |
% |
|
3.17 |
% |
|
3.18 |
% |
|
|
3.23 |
% |
|
3.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________
(1) Includes investment securities at adjusted amortized cost.
(2) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the
computation of this Non-GAAP measure.
|
FINANCIAL INSTITUTIONS, INC. |
Selected Financial Information (Unaudited) |
(Amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
Years ended
|
|
2017
|
|
2016 |
|
December
31,
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
2017
|
|
2016
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
ASSET QUALITY DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$30,934 |
|
|
$27,085 |
|
|
$34,347 |
|
|
$33,159 |
|
|
$31,081 |
|
|
$30,934 |
|
|
$29,350 |
|
Net loan charge-offs (recoveries): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
3,198 |
|
|
|
496 |
|
|
|
1,622 |
|
|
|
44 |
|
|
|
568 |
|
|
|
964 |
|
|
|
52 |
|
Commercial mortgage |
|
(252 |
) |
|
|
340 |
|
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(38 |
) |
|
|
(204 |
) |
|
|
212 |
|
Residential real estate loans |
|
301 |
|
|
|
115 |
|
|
|
88 |
|
|
|
161 |
|
|
|
78 |
|
|
|
(26 |
) |
|
|
(1 |
) |
Residential real estate lines |
|
46 |
|
|
|
89 |
|
|
|
40 |
|
|
|
19 |
|
|
|
(46 |
) |
|
|
33 |
|
|
|
41 |
|
Consumer indirect |
|
5,720 |
|
|
|
4,489 |
|
|
|
1,636 |
|
|
|
1,244 |
|
|
|
1,082 |
|
|
|
1,758 |
|
|
|
1,361 |
|
Other consumer |
|
610 |
|
|
|
260 |
|
|
|
240 |
|
|
|
151 |
|
|
|
110 |
|
|
|
109 |
|
|
|
108 |
|
Total net charge-offs |
|
9,623 |
|
|
|
5,789 |
|
|
|
3,621 |
|
|
|
1,614 |
|
|
|
1,754 |
|
|
|
2,634 |
|
|
|
1,773 |
|
Provision for loan losses |
|
13,361 |
|
|
|
9,638 |
|
|
|
3,946 |
|
|
|
2,802 |
|
|
|
3,832 |
|
|
|
2,781 |
|
|
|
3,357 |
|
Ending balance |
$34,672 |
|
|
$30,934 |
|
|
$34,672 |
|
|
$34,347 |
|
|
$33,159 |
|
|
$31,081 |
|
|
$30,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (recoveries) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to average loans (annualized): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
|
0.81 |
% |
|
|
0.15 |
% |
|
|
1.50 |
% |
|
|
0.04 |
% |
|
|
0.59 |
% |
|
|
1.08 |
% |
|
|
0.06 |
% |
Commercial mortgage |
|
-0.03 |
% |
|
|
0.05 |
% |
|
|
-0.00 |
% |
|
|
-0.00 |
% |
|
|
-0.02 |
% |
|
|
-0.12 |
% |
|
|
0.13 |
% |
Residential real estate loans |
|
0.07 |
% |
|
|
0.03 |
% |
|
|
0.08 |
% |
|
|
0.15 |
% |
|
|
0.07 |
% |
|
|
-0.02 |
% |
|
|
-0.00 |
% |
Residential real estate lines |
|
0.04 |
% |
|
|
0.07 |
% |
|
|
0.14 |
% |
|
|
0.06 |
% |
|
|
-0.15 |
% |
|
|
0.11 |
% |
|
|
0.13 |
% |
Consumer indirect |
|
0.70 |
% |
|
|
0.64 |
% |
|
|
0.75 |
% |
|
|
0.59 |
% |
|
|
0.54 |
% |
|
|
0.93 |
% |
|
|
0.73 |
% |
Other consumer |
|
3.56 |
% |
|
|
1.48 |
% |
|
|
5.40 |
% |
|
|
3.49 |
% |
|
|
2.65 |
% |
|
|
2.61 |
% |
|
|
2.46 |
% |
Total loans |
|
0.38 |
% |
|
|
0.26 |
% |
|
|
0.54 |
% |
|
|
0.25 |
% |
|
|
0.29 |
% |
|
|
0.45 |
% |
|
|
0.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial business |
$5,344 |
|
|
$2,151 |
|
|
$5,344 |
|
|
$7,182 |
|
|
$7,312 |
|
|
$3,753 |
|
|
$2,151 |
|
Commercial mortgage |
|
2,623 |
|
|
|
1,025 |
|
|
|
2,623 |
|
|
|
2,539 |
|
|
|
2,189 |
|
|
|
1,267 |
|
|
|
1,025 |
|
Residential real estate loans |
|
2,252 |
|
|
|
1,236 |
|
|
|
2,252 |
|
|
|
1,263 |
|
|
|
1,579 |
|
|
|
1,601 |
|
|
|
1,236 |
|
Residential real estate lines |
|
404 |
|
|
|
372 |
|
|
|
404 |
|
|
|
325 |
|
|
|
379 |
|
|
|
336 |
|
|
|
372 |
|
Consumer indirect |
|
1,895 |
|
|
|
1,526 |
|
|
|
1,895 |
|
|
|
1,250 |
|
|
|
1,149 |
|
|
|
1,040 |
|
|
|
1,526 |
|
Other consumer |
|
13 |
|
|
|
16 |
|
|
|
13 |
|
|
|
26 |
|
|
|
22 |
|
|
|
23 |
|
|
|
16 |
|
Total non-performing loans |
|
12,531 |
|
|
|
6,326 |
|
|
|
12,531 |
|
|
|
12,585 |
|
|
|
12,630 |
|
|
|
8,020 |
|
|
|
6,326 |
|
Foreclosed assets |
|
148 |
|
|
|
107 |
|
|
|
148 |
|
|
|
281 |
|
|
|
154 |
|
|
|
58 |
|
|
|
107 |
|
Total non-performing assets |
$12,679 |
|
|
$6,433 |
|
|
$12,679 |
|
|
$12,866 |
|
|
$12,784 |
|
|
$8,078 |
|
|
$6,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing loans to total loans |
|
0.46 |
% |
|
|
0.27 |
% |
|
|
0.46 |
% |
|
|
0.48 |
% |
|
|
0.50 |
% |
|
|
0.33 |
% |
|
0.27 |
% |
Total non-performing assets to total assets |
|
0.31 |
% |
|
|
0.17 |
% |
|
|
0.31 |
% |
|
|
0.32 |
% |
|
|
0.33 |
% |
|
|
0.21 |
% |
|
0.17 |
% |
Allowance for loan losses to total loans |
|
1.27 |
% |
|
|
1.32 |
% |
|
|
1.27 |
% |
|
|
1.31 |
% |
|
|
1.32 |
% |
|
|
1.29 |
% |
|
1.32 |
% |
Allowance for loan losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to non-performing loans |
|
277 |
% |
|
|
489 |
% |
|
|
277 |
% |
|
|
273 |
% |
|
|
263 |
% |
|
|
388 |
% |
|
489 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________
(1) At period end.
|
FINANCIAL INSTITUTIONS, INC. |
Appendix A - Reconciliation to Non-GAAP Financial Measures
(Unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
Years ended |
|
2017 |
|
2016 |
|
December
31, |
|
Fourth |
|
Third |
|
Second |
|
First |
|
Fourth |
|
2017 |
|
2016 |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
Ending tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
$4,105,210 |
|
|
$4,021,591 |
|
|
$3,891,538 |
|
|
$3,859,865 |
|
|
$3,710,340 |
|
Less: Goodwill and other intangible assets, net |
|
|
|
|
|
74,703 |
|
|
|
74,997 |
|
|
|
73,477 |
|
|
|
75,343 |
|
|
|
75,640 |
|
Tangible assets |
|
|
|
|
$4,030,507 |
|
|
$3,946,594 |
|
|
$3,818,061 |
|
|
$3,784,522 |
|
|
$3,634,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending tangible common |
|
|
|
|
|
|
|
|
|
|
|
|
|
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shareholders’ equity |
|
|
|
|
$363,848 |
|
|
$348,668 |
|
|
$330,301 |
|
|
$308,348 |
|
|
$302,714 |
|
Less: Goodwill and other intangible assets, net |
|
|
|
|
|
74,703 |
|
|
|
74,997 |
|
|
|
73,477 |
|
|
|
75,343 |
|
|
|
75,640 |
|
Tangible common equity |
|
|
|
|
$289,145 |
|
|
$273,671 |
|
|
$256,824 |
|
|
$233,005 |
|
|
$227,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets (1) |
|
|
|
|
|
7.17 |
% |
|
|
6.93 |
% |
|
|
6.73 |
% |
|
|
6.16 |
% |
|
|
6.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
|
|
|
15,925 |
|
|
|
15,626 |
|
|
|
15,127 |
|
|
|
14,536 |
|
|
|
14,538 |
|
Tangible common book value per |
|
|
|
|
|
|
|
|
|
|
|
|
|
share (2) |
|
|
|
|
$18.16 |
|
|
$17.51 |
|
|
$16.98 |
|
|
$16.03 |
|
|
$15.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$3,896,071 |
|
|
$3,547,105 |
|
|
$4,028,063 |
|
|
$3,951,002 |
|
|
$3,847,137 |
|
|
$3,754,470 |
|
|
$3,679,569 |
|
Less: Average goodwill and other intangible assets, net |
|
74,818 |
|
|
|
76,170 |
|
|
|
74,866 |
|
|
|
73,960 |
|
|
|
74,954 |
|
|
|
75,508 |
|
|
|
75,807 |
|
Average tangible assets |
$3,821,253 |
|
|
$3,470,935 |
|
|
$3,953,197 |
|
|
$3,877,042 |
|
|
$3,772,183 |
|
|
$3,678,962 |
|
|
$3,603,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average tangible common |
|
|
|
|
|
|
|
|
|
|
|
|
|
equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common equity |
$331,184 |
|
|
$301,666 |
|
|
$357,079 |
|
|
$340,981 |
|
|
$319,387 |
|
|
$306,626 |
|
|
$306,335 |
|
Less: Average goodwill and other intangible assets, net |
|
74,818 |
|
|
|
76,170 |
|
|
|
74,866 |
|
|
|
73,960 |
|
|
|
74,954 |
|
|
|
75,508 |
|
|
|
75,807 |
|
Average tangible common equity |
$256,366 |
|
|
$225,496 |
|
|
$282,213 |
|
|
$267,021 |
|
|
$244,433 |
|
|
$231,118 |
|
|
$230,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$32,064 |
|
|
$30,469 |
|
|
$10,693 |
|
|
$7,913 |
|
|
$5,880 |
|
|
$7,578 |
|
|
$8,328 |
|
Return on average tangible common equity (3) |
|
12.51 |
% |
|
|
13.51 |
% |
|
|
15.03 |
% |
|
|
11.76 |
% |
|
|
9.65 |
% |
|
|
13.30 |
% |
|
|
14.37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by common shares outstanding.
(3) Net income available to common shareholders (annualized) divided by average
tangible common equity.