WARSAW, N.Y., April 24, 2013 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq:FISI) (the "Company"), the parent company of Five Star Bank, today reported financial results for the first quarter ended March 31, 2013.
Summary of Performance
"Our first quarter results provide a solid start to 2013," said Martin K. Birmingham, the Company's President and Chief Executive Officer. "We delivered consistent earnings despite the pressure we experienced, like most of the banking industry, on our net interest margin."
Net income available to common shareholders was $5.8 million or $0.42 per diluted share in the quarter ended March 31, 2013, representing a $182 thousand, or $0.01 per diluted share, decrease from fourth quarter 2012. Net income of $6.1 million in the first quarter 2013 was $183 thousand, or 3% lower than the fourth quarter 2012 as a $270 thousand increase in noninterest income was offset by a $201 thousand decrease in net interest income and $189 thousand increase in the provision for loan losses. The Company's return on average assets and return on average common equity were 0.90% and 9.83%, respectively, during the first quarter 2013, compared to 0.95% and 9.95%, respectively, in the fourth quarter 2012.
Mr. Birmingham concluded, "We are committed to enhancing shareholder value by utilizing our earnings both for growth and returning a portion of earnings to shareholders as a cash dividend. This is evidenced by our recent announcement of a 12.5% increase in the quarterly cash dividend from $0.16 per share to $0.18 per share, which returned 43% percent of first quarter net income to shareholders."
Net Interest Income and Net Interest Margin
Net interest income of $22.9 million in the first quarter 2013 was $201 thousand lower than the fourth quarter 2012, partly a result of the fewer number of days in the first quarter versus the fourth quarter. The net interest margin (on a tax-equivalent basis) was 3.73% in the first quarter 2013 compared to 3.92% in fourth quarter 2012. The Company's yield on interest-earning assets decreased 22 basis points in the first quarter 2013 compared with the fourth quarter 2012, partly a result of cash flows being reinvested in the current low interest rate environment, coupled with the impact of a $100 million leverage strategy that utilized proceeds from FHLB advances to acquire high-quality investment securities. The underlying leverage strategy increased net interest income by approximately $270 thousand in the first quarter 2013.
Noninterest Income
Total noninterest income for the first quarter 2013 was $6.6 million compared to $6.3 million in the fourth quarter 2012. Noninterest income in the first quarter 2013 included gains totaling $892 thousand from the sale of three trust preferred securities that were written down in prior periods and included in non-performing assets. Net securities gains totaled $487 thousand in the fourth quarter 2012. During the fourth quarter 2012, the Company recognized a loss of $302 thousand from the disposal of other assets, primarily related to the consolidation of branches as part of the 2012 branch acquisitions. Excluding the net securities gains and gains/losses from the disposal of other assets, noninterest income in the first quarter 2013 was $438 thousand lower than the fourth quarter 2012, as a $225 thousand increase in broker-dealer revenue resulting from favorable market conditions and new business opportunities was more than offset by decreases of $385 thousand in service charges on deposits, reflecting typical seasonality, $99 thousand in ATM and debit card income and $139 thousand in mortgage banking revenue (defined as loan servicing income and net gains on the sale of loans held for sale).
Noninterest Expense
Total noninterest expense of $17.6 million for the first quarter 2013 increased by less than 1% from $17.5 million in the fourth quarter. Advertising and promotions expense decreased $216 thousand, largely attributable to the timing of promotional spending, while lower real estate owned expense drove a $111 thousand decrease in other noninterest expense when comparing the first quarter 2013 to the fourth quarter 2012. These decreases were offset by higher salaries and employee benefits and occupancy and equipment expense. Salaries and employee benefits increased $147 thousand as the Company typically experiences a higher level of payroll taxes in the first quarter. Occupancy and equipment expense increased $150 thousand due to an increase in service contract expense when comparing the first quarter 2013 to the fourth quarter 2012. In addition, the last three quarters include non-recurring professional service fees associated with the executive management transitions that began in 2012 with the retirement of the Company's former CEO.
Balance Sheet and Capital Management
Total assets were $2.828 billion at March 31, 2013, up $63.8 million from $2.764 billion at December 31, 2012. The increase in total assets is attributable to a $24.4 million increase in cash and cash equivalents, a $29.5 million increase in investment securities and a $11.6 million increase in loans.
Total loans were $1.717 billion at March 31, 2013, up $11.6 million or 1% compared to $1.706 billion at December 31, 2012. The increase in loans was attributable to organic growth, primarily in the commercial, home equity and consumer indirect loan categories. The average yield on the loan portfolio was 4.83% in the first quarter 2013, compared to 4.98% in the fourth quarter 2012.
Total investment securities were $871.2 million at March 31, 2013, up $29.5 million compared to $841.7 million at December 31, 2012. The average yield on the investment securities portfolio was 2.39% in the first quarter 2013 compared to 2.56% in the fourth quarter 2012.
Total deposits were $2.409 billion at March 31, 2013, up $147.7 million from $2.262 billion at December 31, 2012. Public deposit balances increased $178.6 million during the first quarter of 2013 due to the seasonality of municipal cash flows, coupled with successful business development efforts in our newly acquired branches. The repricing of matured certificates of deposit and the decrease in interest rates on various interest-bearing deposit accounts to reflect lower market interest rates resulted in our average cost of interest-bearing liabilities declining to 0.37% in the first quarter 2013 from 0.42% in the fourth quarter 2012.
Shareholders' equity was $254.9 million at March 31, 2013, up $1.0 million compared with $253.9 million at December 31, 2012. At March 31, 2013, the tangible common equity to tangible assets ratio and leverage ratio were 6.74% and 7.46%, respectively, compared to 6.86% and 7.71%, respectively, at December 31, 2012. The decrease in the Company's equity ratios was attributable to growth in our average assets.
At March 31, 2013, the Company's common book value and tangible common book value was $17.21 per share and $13.56 per share, respectively, compared to $17.15 per share and $13.49 per share, respectively, at December 31, 2012.
Credit Quality
Non-performing loans were $11.8 million or 0.69% of total loans at March 31, 2013, compared with $9.1 million or 0.53% of total loans at December 31, 2012. The Company's ratio of non-performing loans to total loans continues to compare favorably to its peer group average, which was 2.19% of total loans at December 31, 2012, the most recent period for which information is available (Source: Federal Financial Institutions Examination Council — Bank Holding Company Performance Report as of December 31, 2012 — Top-tier bank holding companies having consolidated assets between $1 billion and $3 billion).
The increase in non-performing loans during the first quarter 2013 was due to the addition of one credit relationship consisting of commercial business and commercial mortgage loans with unpaid principal balances totaling $3.4 million. The Company had internally downgraded the relationship to substandard status from special mention during the fourth quarter 2012. The further downgrade necessitated a specific allocation that increased our allowance for losses by approximately $570 thousand in the quarter.
Net loan charge-offs improved to $1.6 million in the first quarter 2013 from $2.1 million in the fourth quarter 2012. The provision for loan losses was $2.7 million in the first quarter 2013, compared to $2.5 million in the fourth quarter.
The allowance for loan losses was $25.8 million at March 31, 2013, compared with $24.7 million at December 31, 2012. The ratio of the allowance for loan losses to total loans was 1.50% at March 31, 2013, compared with 1.45% at December 31, 2012. The ratio of the allowance for loan losses for originated loans to total originated loans was 1.56% at March 31, 2013, compared with 1.51% at December 31, 2012. The ratio of allowance for loan losses to non-performing loans was 220% at March 31, 2013, compared with 271% at December 31, 2012.
About Financial Institutions, Inc.
With over $2.8 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 60 ATMs throughout Western and Central New York State. Five Star Investment Services provides investment advice, brokerage and insurance products and services within the same New York State markets. Financial Institutions, Inc. and its subsidiaries employ over 600 individuals. 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.
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, the impact of the current management transition, the attitudes and preferences of its customers, its ability to successfully integrate recently acquired bank branches and profitably operate newly opened bank branches, 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) |
|||||
2013 | 2012 | ||||
March 31, | December 31, | September 30, | June 30, | March 31, | |
SELECTED BALANCE SHEET DATA: | |||||
Cash and cash equivalents | $ 84,791 | 60,436 | 77,045 | 61,813 | 77,025 |
Investment securities: | |||||
Available for sale | 853,437 | 823,796 | 748,618 | 765,216 | 699,497 |
Held-to-maturity | 17,747 | 17,905 | 19,564 | 22,016 | 24,196 |
Total investment securities | 871,184 | 841,701 | 768,182 | 787,232 | 723,693 |
Loans held for sale | 2,142 | 1,518 | 1,411 | 1,682 | 2,053 |
Loans: | |||||
Commercial business | 259,062 | 258,675 | 245,307 | 245,437 | 233,764 |
Commercial mortgage | 424,635 | 413,324 | 403,120 | 413,983 | 406,521 |
Residential mortgage | 126,228 | 133,520 | 139,984 | 142,900 | 112,148 |
Home equity | 292,225 | 286,649 | 279,211 | 264,911 | 237,019 |
Consumer indirect | 590,440 | 586,794 | 563,676 | 531,645 | 508,085 |
Other consumer | 24,700 | 26,764 | 27,687 | 25,278 | 23,491 |
Total loans | 1,717,290 | 1,705,726 | 1,658,985 | 1,624,154 | 1,521,028 |
Allowance for loan losses | 25,827 | 24,714 | 24,301 | 24,120 | 23,763 |
Total loans, net | 1,691,463 | 1,681,012 | 1,634,684 | 1,600,034 | 1,497,265 |
Total interest-earning assets (1) (2) | 2,567,948 | 2,522,444 | 2,400,225 | 2,389,171 | 2,226,472 |
Goodwill and other intangible assets, net | 50,288 | 50,389 | 50,924 | 43,858 | 37,369 |
Total assets | 2,827,658 | 2,763,865 | 2,653,319 | 2,622,751 | 2,460,820 |
Deposits: | |||||
Noninterest-bearing demand | 494,362 | 501,514 | 490,706 | 422,165 | 404,186 |
Interest-bearing demand | 529,115 | 449,744 | 472,023 | 420,386 | 435,701 |
Savings and money market | 748,482 | 655,598 | 673,883 | 584,278 | 530,754 |
Certificates of deposit | 637,538 | 654,938 | 695,107 | 708,442 | 695,928 |
Total deposits | 2,409,497 | 2,261,794 | 2,331,719 | 2,135,271 | 2,066,569 |
Borrowings | 139,620 | 179,806 | 38,282 | 200,824 | 117,347 |
Total interest-bearing liabilities | 2,054,755 | 1,940,086 | 1,879,295 | 1,913,930 | 1,779,730 |
Shareholders' equity | 254,930 | 253,897 | 251,842 | 246,946 | 239,962 |
Common shareholders' equity (3) | 237,511 | 236,426 | 234,371 | 229,473 | 222,489 |
Tangible common equity (4) | 187,223 | 186,037 | 183,447 | 185,615 | 185,120 |
Unrealized gain on investment securities, net of tax | $ 13,745 | 16,060 | 17,178 | 14,487 | 12,316 |
Common shares outstanding | 13,804 | 13,788 | 13,786 | 13,812 | 13,812 |
Treasury shares | 358 | 374 | 376 | 350 | 350 |
CAPITAL RATIOS AND PER SHARE DATA: | |||||
Leverage ratio | 7.46% | 7.71 | 7.67 | 8.27 | 8.80 |
Tier 1 risk-based capital | 10.84% | 10.73 | 10.91 | 11.39 | 12.22 |
Total risk-based capital | 12.09% | 11.98 | 12.16 | 12.64 | 13.47 |
Common equity to assets | 8.40% | 8.55 | 8.83 | 8.75 | 9.04 |
Tangible common equity to tangible assets (4) | 6.74% | 6.86 | 7.05 | 7.20 | 7.64 |
Common book value per share | $ 17.21 | 17.15 | 17.00 | 16.61 | 16.11 |
Tangible common book value per share (4) | 13.56 | 13.49 | 13.31 | 13.44 | 13.40 |
(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) |
||||||
2013 | 2012 | |||||
First | Year ended | Fourth | Third | Second | First | |
Quarter | December 31, | Quarter | Quarter | Quarter | Quarter | |
SELECTED INCOME STATEMENT DATA: | ||||||
Interest income | $ 24,748 | 97,567 | 25,087 | 25,299 | 23,731 | 23,450 |
Interest expense | 1,861 | 9,051 | 1,999 | 2,200 | 2,343 | 2,509 |
Net interest income | 22,887 | 88,516 | 23,088 | 23,099 | 21,388 | 20,941 |
Provision for loan losses | 2,709 | 7,128 | 2,520 | 1,764 | 1,459 | 1,385 |
Net interest income after provision for loan losses | 20,178 | 81,388 | 20,568 | 21,335 | 19,929 | 19,556 |
Noninterest income: | ||||||
Service charges on deposits | 2,141 | 8,627 | 2,526 | 2,292 | 1,974 | 1,835 |
ATM and debit card | 1,249 | 4,716 | 1,348 | 1,219 | 1,072 | 1,077 |
Broker-dealer fees and commissions | 699 | 2,104 | 474 | 609 | 434 | 587 |
Company owned life insurance | 415 | 1,751 | 451 | 433 | 441 | 426 |
Loan servicing | 73 | 617 | (28) | 142 | 409 | 94 |
Net gain on sale of loans held for sale | 200 | 1,421 | 440 | 323 | 325 | 333 |
Net gain on investment securities | 892 | 2,651 | 487 | 596 | 1,237 | 331 |
Impairment charge on investment securities | -- | (91) | -- | -- | -- | (91) |
Net gain (loss) on sale of other assets | 1 | (381) | (302) | (114) | 29 | 6 |
Other | 883 | 3,362 | 887 | 853 | 769 | 853 |
Total noninterest income | 6,553 | 24,777 | 6,283 | 6,353 | 6,690 | 5,451 |
Noninterest expense: | ||||||
Salaries and employee benefits | 9,709 | 40,127 | 9,562 | 12,438 | 9,071 | 9,056 |
Occupancy and equipment | 3,169 | 11,419 | 3,019 | 2,915 | 2,715 | 2,770 |
Professional services | 937 | 4,133 | 890 | 1,452 | 1,080 | 711 |
Computer and data processing | 704 | 3,271 | 809 | 976 | 886 | 600 |
Supplies and postage | 680 | 2,497 | 567 | 899 | 573 | 458 |
FDIC assessments | 361 | 1,300 | 343 | 356 | 304 | 297 |
Advertising and promotions | 214 | 929 | 430 | 261 | 137 | 101 |
Loss on extinguishment of debt | -- | -- | -- | -- | -- | -- |
Other | 1,810 | 7,721 | 1,921 | 2,321 | 1,815 | 1,664 |
Total noninterest expense | 17,584 | 71,397 | 17,541 | 21,618 | 16,581 | 15,657 |
Income before income taxes | 9,147 | 34,768 | 9,310 | 6,070 | 10,038 | 9,350 |
Income tax expense | 2,998 | 11,319 | 2,978 | 1,805 | 3,382 | 3,154 |
Net income | $ 6,149 | 23,449 | 6,332 | 4,265 | 6,656 | 6,196 |
Preferred stock dividends | 368 | 1,474 | 369 | 368 | 368 | 369 |
Net income available to common shareholders | $ 5,781 | 21,975 | 5,963 | 3,897 | 6,288 | 5,827 |
FINANCIAL RATIOS AND STOCK DATA: | ||||||
Earnings per share – basic | $ 0.42 | 1.60 | 0.44 | 0.28 | 0.46 | 0.43 |
Earnings per share – diluted | $ 0.42 | 1.60 | 0.43 | 0.28 | 0.46 | 0.42 |
Cash dividends declared on common stock | $ 0.18 | 0.57 | 0.16 | 0.14 | 0.14 | 0.13 |
Common dividend payout ratio (1) | 42.86% | 35.63 | 36.36 | 50.00 | 30.43 | 30.23 |
Dividend yield (annualized) | 3.66% | 3.06 | 3.42 | 2.99 | 3.34 | 3.23 |
Return on average assets | 0.90% | 0.93 | 0.95 | 0.65 | 1.08 | 1.06 |
Return on average equity | 9.75% | 9.46 | 9.85 | 6.77 | 10.94 | 10.36 |
Return on average common equity (2) | 9.83% | 9.53 | 9.95 | 6.65 | 11.12 | 10.51 |
Return on average tangible common equity (3) | 12.47% | 11.74 | 12.66 | 8.33 | 13.36 | 12.62 |
Efficiency ratio (4) | 59.87% | 62.87 | 58.88 | 73.04 | 60.41 | 58.59 |
Stock price (Nasdaq: FISI): | ||||||
High | $ 20.83 | 19.52 | 19.39 | 19.52 | 17.66 | 17.99 |
Low | $ 18.51 | 15.22 | 17.61 | 16.50 | 15.51 | 15.22 |
Close | $ 19.96 | 18.63 | 18.63 | 18.64 | 16.88 | 16.17 |
(1) Common dividend payout ratio equals dividends declared during the period divided by earnings per share for the equivalent period. | ||||||
(2) 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) |
||||||
2013 | 2012 | |||||
First | Year ended | Fourth | Third | Second | First | |
Quarter | December 31, | Quarter | Quarter | Quarter | Quarter | |
SELECTED AVERAGE BALANCES: | ||||||
Federal funds sold and interest-earning deposits | $ 320 | 113 | 94 | 168 | 94 | 94 |
Investment securities (1) | 836,270 | 703,643 | 727,735 | 745,796 | 715,431 | 624,883 |
Loans (2): | ||||||
Commercial business | 258,958 | 242,100 | 250,384 | 248,060 | 237,936 | 231,865 |
Commercial mortgage | 418,248 | 407,737 | 407,168 | 409,884 | 411,871 | 402,007 |
Residential mortgage | 130,425 | 127,363 | 137,586 | 141,808 | 115,621 | 114,166 |
Home equity | 288,993 | 257,537 | 282,831 | 271,131 | 242,208 | 233,550 |
Consumer indirect | 588,068 | 533,589 | 576,519 | 544,527 | 517,859 | 494,861 |
Other consumer | 25,535 | 25,058 | 27,043 | 26,179 | 23,420 | 23,554 |
Total loans | 1,710,227 | 1,593,384 | 1,681,531 | 1,641,589 | 1,548,915 | 1,500,003 |
Total interest-earning assets | 2,546,817 | 2,297,140 | 2,409,360 | 2,387,553 | 2,264,440 | 2,124,980 |
Goodwill and other intangible assets, net | 50,350 | 43,398 | 50,879 | 47,200 | 38,020 | 37,369 |
Total assets | 2,780,209 | 2,519,257 | 2,650,502 | 2,607,497 | 2,473,888 | 2,342,730 |
Interest-bearing liabilities: | ||||||
Interest-bearing demand | 494,654 | 423,096 | 464,094 | 425,739 | 409,720 | 392,353 |
Savings and money market | 693,684 | 586,329 | 671,295 | 611,564 | 553,701 | 507,543 |
Certificates of deposit | 647,551 | 693,353 | 685,318 | 695,682 | 689,103 | 703,372 |
Borrowings | 191,412 | 121,735 | 69,335 | 157,973 | 162,718 | 97,093 |
Total interest-bearing liabilities | 2,027,301 | 1,824,513 | 1,890,042 | 1,890,958 | 1,815,242 | 1,700,361 |
Noninterest-bearing demand deposits | 481,909 | 430,240 | 487,434 | 447,204 | 398,353 | 387,153 |
Total deposits | 2,317,798 | 2,133,018 | 2,308,141 | 2,180,189 | 2,050,877 | 1,990,421 |
Total liabilities | 2,524,377 | 2,271,258 | 2,394,687 | 2,356,787 | 2,229,046 | 2,102,217 |
Shareholders' equity | 255,832 | 247,999 | 255,815 | 250,710 | 244,842 | 240,513 |
Common equity (3) | 238,373 | 230,527 | 238,344 | 233,238 | 227,369 | 223,040 |
Tangible common equity (4) | $ 188,023 | 187,129 | 187,465 | 186,038 | 189,349 | 185,671 |
Common shares outstanding: | ||||||
Basic | 13,717 | 13,696 | 13,707 | 13,703 | 13,697 | 13,675 |
Diluted | 13,767 | 13,751 | 13,761 | 13,759 | 13,750 | 13,733 |
SELECTED AVERAGE YIELDS: (Tax equivalent basis) |
||||||
Federal funds sold and interest-earning deposits | 0.21% | 0.29 | 0.60 | 0.16 | 0.21 | 0.29 |
Investment securities | 2.39% | 2.66 | 2.56 | 2.60 | 2.68 | 2.83 |
Loans | 4.83% | 5.09 | 4.98 | 5.10 | 5.06 | 5.24 |
Total interest-earning assets | 4.03% | 4.35 | 4.25 | 4.32 | 4.31 | 4.53 |
Interest-bearing demand | 0.11% | 0.14 | 0.13 | 0.14 | 0.14 | 0.15 |
Savings and money market | 0.13% | 0.17 | 0.14 | 0.15 | 0.18 | 0.22 |
Certificates of deposit | 0.82% | 0.99 | 0.86 | 0.94 | 1.03 | 1.13 |
Borrowings | 0.40% | 0.48 | 0.76 | 0.43 | 0.43 | 0.46 |
Total interest-bearing liabilities | 0.37% | 0.50 | 0.42 | 0.46 | 0.52 | 0.59 |
Net interest rate spread | 3.66% | 3.85 | 3.83 | 3.86 | 3.79 | 3.94 |
Net interest rate margin | 3.73% | 3.95 | 3.92 | 3.96 | 3.89 | 4.05 |
(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) |
|||||
2013 | 2012 | ||||
March 31, | December 31, | September 30, | June 30, | March 31, | |
ASSET QUALITY DATA: | |||||
Allowance for Loan Losses | |||||
Beginning balance | $ 24,714 | 24,301 | 24,120 | 23,763 | 23,260 |
Net loan charge-offs (recoveries): | |||||
Commercial business | 202 | 139 | 287 | (11) | (22) |
Commercial mortgage | (11) | 277 | (64) | 166 | 105 |
Residential mortgage | 145 | 22 | 39 | 99 | 36 |
Home equity | 232 | 119 | 65 | 82 | (5) |
Consumer indirect | 913 | 1,367 | 1,124 | 661 | 668 |
Other consumer | 115 | 183 | 132 | 105 | 100 |
Total net charge-offs | 1,596 | 2,107 | 1,583 | 1,102 | 882 |
Provision for loan losses | 2,709 | 2,520 | 1,764 | 1,459 | 1,385 |
Ending balance | $ 25,827 | 24,714 | 24,301 | 24,120 | 23,763 |
Supplemental information | |||||
Period end loans: | |||||
Originated loans | $ 1,657,431 | 1,641,197 | 1,588,614 | 1,566,025 | 1,521,028 |
Acquired loans | 59,859 | 64,529 | 70,371 | 58,129 | -- |
Total loans | $ 1,717,290 | 1,705,726 | 1,658,985 | 1,624,154 | 1,521,028 |
Allowance for loan losses to total loans | 1.50% | 1.45 | 1.46 | 1.49 | 1.56 |
Allowance for loan losses for originated loans to originated loans | 1.56% | 1.51 | 1.53 | 1.54 | 1.56 |
Net charge-offs (recoveries) to average loans (annualized): | |||||
Commercial business | 0.32% | 0.22 | 0.46 | -0.02 | -0.04 |
Commercial mortgage | -0.01% | 0.27 | -0.06 | 0.16 | 0.10 |
Residential mortgage | 0.45% | 0.06 | 0.11 | 0.34 | 0.13 |
Home equity | 0.33% | 0.17 | 0.10 | 0.14 | -0.01 |
Consumer indirect | 0.63% | 0.94 | 0.82 | 0.51 | 0.54 |
Other consumer | 1.83% | 2.68 | 2.00 | 1.80 | 1.70 |
Total loans | 0.38% | 0.50 | 0.38 | 0.29 | 0.24 |
Non-performing loans: | |||||
Commercial business | $ 5,616 | 3,413 | 3,621 | 4,150 | 1,863 |
Commercial mortgage | 2,767 | 1,799 | 3,388 | 3,598 | 3,040 |
Residential mortgage | 1,759 | 2,040 | 1,597 | 1,918 | 1,929 |
Home equity | 598 | 939 | 929 | 973 | 934 |
Consumer indirect | 1,007 | 891 | 876 | 695 | 444 |
Other consumer | 19 | 43 | 23 | 4 | 12 |
Total non-performing loans | 11,766 | 9,125 | 10,434 | 11,338 | 8,222 |
Foreclosed assets | 371 | 184 | 303 | 270 | 258 |
Non-performing investment securities | 343 | 753 | 766 | 1,145 | 1,505 |
Total non-performing assets | $ 12,480 | 10,062 | 11,503 | 12,753 | 9,985 |
Total non-performing loans to total loans | 0.69% | 0.53 | 0.63 | 0.70 | 0.54 |
Total non-performing loans to originated loans | 0.71% | 0.56 | 0.66 | 0.72 | 0.54 |
Total non-performing assets to total assets | 0.44% | 0.36 | 0.43 | 0.49 | 0.41 |
Allowance for loan losses to non-performing loans | 220% | 271 | 233 | 213 | 289 |
FINANCIAL INSTITUTIONS, INC. Appendix A - Non-GAAP to GAAP Reconciliation (Unaudited) (In thousands, except per share amounts) |
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2013 | 2012 | |||||
First | Year ended | Fourth | Third | Second | First | |
Quarter | December 31, | Quarter | Quarter | Quarter | Quarter | |
Ending tangible assets: | ||||||
Total assets | $ 2,827,658 | 2,763,865 | 2,653,319 | 2,622,751 | 2,460,820 | |
Less: Goodwill and other intangible assets, net | 50,288 | 50,389 | 50,924 | 43,858 | 37,369 | |
Tangible assets (non-GAAP) | $ 2,777,370 | 2,713,476 | 2,602,395 | 2,578,893 | 2,423,451 | |
Ending tangible common equity: | ||||||
Common shareholders' equity | $ 237,511 | 236,426 | 234,371 | 229,473 | 222,489 | |
Less: Goodwill and other intangible assets, net | 50,288 | 50,389 | 50,924 | 43,858 | 37,369 | |
Tangible common equity (non-GAAP) | $ 187,223 | 186,037 | 183,447 | 185,615 | 185,120 | |
Tangible common equity to tangible assets (non-GAAP) (1) | 6.74% | 6.86 | 7.05 | 7.20 | 7.64 | |
Common shares outstanding | 13,804 | 13,788 | 13,786 | 13,812 | 13,812 | |
Tangible common book value per share (non-GAAP) (2) | $ 13.56 | 13.49 | 13.31 | 13.44 | 13.40 | |
Average tangible common equity: | ||||||
Average common equity | $ 238,373 | 230,527 | 238,344 | 233,238 | 227,369 | 223,040 |
Average goodwill and other intangible assets, net | 50,350 | 43,398 | 50,879 | 47,200 | 38,020 | 37,369 |
Average tangible common equity (non-GAAP) | $ 188,023 | 187,129 | 187,465 | 186,038 | 189,349 | 185,671 |
Return on average tangible common equity (3) | 12.47% | 11.74 | 12.66 | 8.33 | 13.36 | 12.62 |
Net operating income: | ||||||
Net income | $ 6,149 | 23,449 | 6,332 | 4,265 | 6,656 | 6,196 |
Branch acquisition expenses, net of tax (4) | -- | 1,966 | -- | 1,262 | 646 | 58 |
CEO retirement expenses, net of tax (4) | -- | 1,670 | -- | 1,670 | -- | -- |
Net operating income (non-GAAP) | $ 6,149 | 27,085 | 6,332 | 7,197 | 7,302 | 6,254 |
Net operating income available to common shareholders: | ||||||
Net income available to common shareholders | $ 5,781 | 21,975 | 5,963 | 3,897 | 6,288 | 5,827 |
Branch acquisition expenses, net of tax (4) | -- | 1,966 | -- | 1,262 | 646 | 58 |
CEO retirement expenses, net of tax (4) | -- | 1,670 | -- | 1,670 | -- | -- |
Net operating income available to common shareholders (non-GAAP) | $ 5,781 | 25,611 | 5,963 | 6,829 | 6,934 | 5,885 |
Financial ratios computed on an operating basis (Non-GAAP): | ||||||
Earnings per share – basic | $ 0.42 | 1.87 | 0.44 | 0.50 | 0.51 | 0.43 |
Earnings per share – diluted | $ 0.42 | 1.86 | 0.43 | 0.50 | 0.50 | 0.43 |
Return on average assets | 0.90% | 1.08 | 0.95 | 1.10 | 1.19 | 1.07 |
Return on average equity | 9.75% | 10.92 | 9.85 | 11.42 | 11.99 | 10.46 |
Return on average common equity | 9.83% | 11.11 | 9.95 | 11.65 | 12.27 | 10.61 |
Return on average tangible common equity | 12.47% | 13.69 | 12.66 | 14.60 | 14.73 | 12.75 |
(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. | ||||||
(4) Tax effect is calculated assuming a 35% effective tax rate. |