FINANCIAL INSTITUTIONS, INC. FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI)
Fourth Quarter andYear-End 2021 Earnings Presentation
January 31, 2022
Safe Harbor Statement
Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, Inc. (the "Company") and its subsidiaries constitute "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe the objectives, plans or goals of the Company are forward-looking. These forward-looking statements can generally be identified as such by the context of the statements, including words such as "believe," "expect," "anticipate," "plan," "may," "would," "intend," "estimate," "guidance" and other similar expressions, whether in the negative or affirmative. These forward-looking statements involve significant risks and uncertainties. All forward-looking statements made herein are qualified by 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 Securities and Exchange Commission. These documents
contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Except as required by law, the Company assumes no obligation to update any information presented herein. This presentation includes certain
non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures.
Reconciliations of those non-GAAP financial measures to GAAP financial measures are provided in the
Appendix to this presentation.
2
Overview of Financial Institutions, Inc.
Corporate Overview
- Diversified financial services holding company headquartered in Western NewYork
- Subsidiaries include:
- Five Star Bank (regional community bank)
- SDN Insurance Agency, LLC (full-service insurance agency)
- Courier Capital, LLC (investment advisory firm)
- HNP Capital, LLC (investment advisory firm)
- 49 banking locations in 14 contiguous counties in Western and Central NewYork
- Experienced management team with extensive market knowledge and industry experience
- Franchise offers products and services to a diversified mix of consumer, business, municipal, healthcare and not-for-profit customers
- Generating consistent, strong operating results
- Positioned for growth through key initiatives
Key Statistics as of December 31, 2021
Assets: | $5.5 billion |
Loans: | $3.7 billion |
Deposits: | $4.8 billion |
Shareholders' Equity: | $505.1 million |
NPAs(1)/Total Assets: | 0.22% |
Employees: | ~ 600 |
ROACE (TTM): | 16.29% |
ROATCE(2) (TTM): | 19.37% |
ROAA (TTM): | 1.46% |
Annualized Dividend Per Share: | $1.08 |
Closing Stock Price Per Share: | $31.80 |
DividendYield: | 3.34% |
Market Capitalization: | $500.7 million |
(1) | NPAs include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets | 3 |
(2) | Refer to "Non-GAAP Reconciliation" in Appendix |
Fourth Quarter Key Statistics(1) and Highlights
- Net income of $19.6 million was $5.8 million higher than 2020
- Diluted earnings per share of $1.21 was $0.37 higher than 2020
- Net income and earnings per share were positively impacted by Q4 2021 benefit for credit losses of $1.2 million as compared to provision of $5.5 million in Q4 2020
- Continued improvement in national unemployment forecast, positive trends in qualitative factors and a reduction in specific reserves resulted in a release of overall credit loss reserves and corresponding benefit for credit losses in current quarter
- Pre-taxpre-provision income(2) of $22.6 million was $1.7 million higher than 2020
- Net interest income of $40.9 million was $4.7 million, or 13.0%, higher than 2020
-
Net interest margin ("NIM") of 3.15% was two basis points higher primarily as a result of fee accretion related to
PPP loan forgiveness partially offset by the interest rate environment (reflecting a flatter yield curve and lower rates) and excess liquidity - Total loans at quarter-end were $3.68 billion, an increase of $84.3 million, or 2.3%, from 12/31/2020
- Excluding PPP loans, total loans increased $276.9 million, or 8.3%, from 12/31/2020
- Common book value per share increased 10.2% from 12/31/2020
- Tangible common book value per share(2) increased 11.6% from 12/31/2020
- The Company bought back approximately 102,000 common shares at an average price of $31.45 per share under its stock repurchase program
(1) As compared to fourth quarter 2020 | 4 |
- Refer to "Non-GAAP Reconciliation" in Appendix
Fourth Quarter 2021
Results Summary | Commentary | |
($ in millions, except per share amounts) | 4Q'20 | 3Q'21 | 4Q'21 |
Net interest income | $36.2 | $38.3 | $40.9 |
Noninterest income | 11.3 | 12.1 | 11.6 |
Noninterest expense | (26.5) | (29.2) | (29.9) |
Income tax expense | (1.7) | (4.5) | (4.2) |
Preferred stock dividend | (0.4) | (0.4) | (0.4) |
Net income available to | |||
common shareholders | $13.4 | $16.8 | $19.2 |
EPS diluted | $0.84 | $1.05 | $1.22 |
Return on average assets | 1.10% | 1.27% | 1.39% |
Return on average | |||
common equity | 12.00% | 13.94% | 15.81% |
Return on average tangible | |||
common equity(1) | 14.38% | 16.50% | 18.69% |
Net interest margin | 3.13% | 3.07% | 3.15% |
Efficiency ratio(2) | 55.79% | 57.76% | 56.76% |
Dividends per share | $0.26 | $0.27 | $0.27 |
Dividend yield (annualized) | 4.60% | 3.49% | 3.37% |
- Net interest income increased $4.7MM from 4Q'20 and $2.6MM from 3Q'21 as a result of the deployment of excess liquidity into investment securities, growth in loans, higher PPP revenue in connection with loan forgiveness, and a lower overall cost of funds.
- Noninterest expense increased $3.4MM from 4Q'20 and $728K from 3Q'21 primarily due to higher salaries and employee benefits ($1.9MM and $313K, respectively), occupancy and equipment expense ($621K and $35K, respectively) and computer and data processing expense ($929K and $373K).
-
Effective tax rate was 17.7% compared to 10.9% for
4Q'20 and 21.0% for 3Q'21. 4Q'21 effective tax rate higher than 4Q'20 due to higher pre-tax earnings. Rates also vary as a result of tax credit investments placed in service in 4Q'21 and 4Q'20. - (Benefit) provision for credit losses was a $1.2MM benefit compared to provision of $5.5MM in 4Q'20 and benefit of $541K in 3Q'21. Improvement in national unemployment forecast, positive trends in qualitative factors and a reduction in specific reserves resulted in a release of overall credit loss reserves and corresponding benefit for credit losses in 4Q'21 and 3Q'21.
(1) | Refer to "Non-GAAP Reconciliation" in Appendix. | 5 |
(2) | 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.
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Financial Institutions Inc. published this content on 31 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2022 21:24:40 UTC.
