Financial Institutions(FISI)

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Financial Institutions(FISI) - 2025 Q2 - Quarterly Report
2025-08-04 20:05
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Form 10-Q (Mark One) Commission File Number: 000-26481 Financial Institutions, Inc. (Exact name of registrant as specified in its charter) NE ...
Financial Institutions(FISI) - 2025 Q2 - Earnings Call Transcript
2025-07-25 13:30
Financial Data and Key Metrics Changes - The company reported a 4% increase in net income available to common shareholders to $17.2 million and a 5% increase in diluted earnings per share compared to the linked quarter [4] - Net interest margin expanded by 14 and 62 basis points from the linked and year-ago quarters, respectively, with net interest income growth of approximately 519% [4] - The annualized return on average assets was 113 basis points, up three basis points from the first quarter, and the efficiency ratio was just below 60% [5] Business Line Data and Key Metrics Changes - Total loans at period end were $4.54 billion, consistent with March 31, while average loans increased by $47.9 million or 1% from the first quarter [5] - Total commercial loans were flat at $2.94 billion compared to March 31, but up 5% from June 30, 2024 [6] - Non-performing commercial loans declined by $7 million from March 31 to June 30, with $2.5 million of commercial net charge-offs reported in the quarter [7] Market Data and Key Metrics Changes - Loan growth has tapered in the Mid Atlantic region due to high competition and increased refinance activity for construction loans [9] - Residential lending was up modestly from the end of the linked quarter and flat year-over-year, with home equity lending up 44% year-to-date from the comparable period in 2024 [10] - Consumer indirect balances were down 2.3% year-over-year to $833.5 million at June 30, reflecting reduced consumer demand [10] Company Strategy and Development Direction - The company remains focused on community banking fundamentals, with strong retail and commercial banking franchises complemented by a growing wealth management business [25] - The company anticipates stronger lending opportunities in early 2026, stimulated by a recently passed tax bill and pent-up demand [9] - The company is actively managing its investment portfolio to balance duration, yield, and risk, with a focus on reinvesting expected loan cash flows into higher-yielding loans [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year loan growth of between 13%, supported by commercial lending in Upstate New York [8] - The effective tax rate is expected to fall between 17% to 19% for the year, including the impact of tax credit investments [21] - The company is focused on expense management to support positive operating leverage in 2025, with a full-year expense guidance of approximately $140 million [20] Other Important Information - Total deposits were down about 4% from March 31, 2025, reflecting typical seasonality and continued outflow of banking as a service deposits [12] - The company recorded a provision for credit losses of $2.6 million in the current quarter, down from $2.9 million in the linked quarter [21] - The common equity Tier one ratio increased by 46 basis points from March 31, indicating a strong capital position [23] Q&A Session Summary Question: Outlook for loan growth and regional opportunities - Management noted that Upstate New York markets are providing more robust opportunities compared to the Mid Atlantic area, with prepayment of construction loans impacting overall growth [29][31] Question: Provisioning levels and net charge-offs - The CFO indicated that the coverage ratio is expected to remain in the 104 to 108 basis points range for the rest of the year, despite higher charge-offs in the second quarter [32] Question: Expense management and guidance - Management confirmed that the full-year guidance of $140 million remains intact, with expectations of normalization in medical expenses due to stop-loss insurance [33]
Financial Institutions(FISI) - 2025 Q2 - Earnings Call Presentation
2025-07-25 12:30
Financial Performance & Guidance - The company reported net income available to common shareholders of $17.2 million for the second quarter of 2025[13] - Diluted earnings per common share increased by 4.9% from $0.81 in 1Q25 to $0.85 in 2Q25[13] - The company affirms full year 2025 NIM guidance of 3.45% to 3.55% and expects noninterest income of $40 million to $42 million[9] - Full year 2025 noninterest expense is projected to be approximately $140 million, with an efficiency ratio below 60%[9] Balance Sheet & Loan Portfolio - Total deposits were $5.16 billion, a decrease of $216.9 million, or 4.0%, from the previous quarter, but up $22.7 million, or 0.4%, year-over-year[13, 15] - Total loans amounted to $4.54 billion, showing a slight decrease from $4.55 billion in the first quarter of 2025[13] - Commercial loans totaled $2.94 billion with committed credit exposure of $3.90 billion at the end of the second quarter[28] - The consumer indirect auto loan portfolio was $833.5 million at the end of the second quarter[40] Asset Quality & Capital - Non-performing loans (NPLs) to total loans decreased to 0.72% at the end of the second quarter[13] - The allowance for credit losses on loans to total loans was 1.04% at the end of the second quarter[74] - The CET1 capital ratio was 10.84% at the end of the second quarter, up 81 bps from one year prior[79]
Financial Institutions(FISI) - 2025 Q2 - Quarterly Results
2025-07-24 20:06
Exhibit 99.1 Chief Financial Officer and Treasurer W. Jack Plants II added, "Our results continue to benefit from our team's focus on prudent balance sheet stewardship through redeployment of cash flows into higher yielding assets, active investment portfolio management and our ability to effectively reprice deposits, supporting a six basis point reduction in our overall cost of funds. Expenses in the second quarter were somewhat elevated, in part reflecting timing of certain expenses and some higher costs ...
Financial Institutions, Inc. Announces Second Quarter 2025 Results
Globenewswire· 2025-07-24 20:05
WARSAW, N.Y., July 24, 2025 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (NASDAQ: FISI) (the "Company," "we" or "us"), parent company of Five Star Bank (the "Bank") and Courier Capital, LLC ("Courier Capital"), today reported financial and operational results for the second quarter ended June 30, 2025. The Company reported net income of $17.5 million in the second quarter of 2025, compared to $16.9 million in the first quarter of 2025 and $25.6 million in the second quarter of 2024. After preferred divi ...
Financial Institutions, Inc. Schedules Second Quarter 2025 Earnings Release and Conference Call
Globenewswire· 2025-07-01 13:01
Core Viewpoint - Financial Institutions, Inc. is set to release its second quarter results for 2025 on July 24, 2025, after market close, indicating ongoing financial performance tracking [1]. Group 1: Earnings Release Information - The earnings conference call will take place on July 25, 2025, at 8:30 a.m. Eastern Time, hosted by the President and CEO, Martin K. Birmingham, and CFO, W. Jack Plants II [2]. - Participants in the U.S. can join the call by dialing 1-833-470-1428 with access code 652423, and a live webcast will be available on the company's website [2]. Group 2: Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.3 billion in assets as of March 31, 2025, providing banking and wealth management services [3]. - The company's subsidiary, Five Star Bank, offers consumer and commercial banking services across Western and Central New York, along with a commercial loan production office in the Mid-Atlantic region [3]. - Courier Capital, LLC, another subsidiary, provides customized investment management and financial planning services to a diverse clientele, including individuals, businesses, and non-profits [3].
Financial Institutions: The Picture Looks Better Now (Rating Upgrade)
Seeking Alpha· 2025-05-18 16:00
Group 1 - The firm Crude Value Insights, previously viewed positively, has been downgraded due to changing market conditions [1] - Crude Value Insights focuses on cash flow and the potential for value and growth in the oil and natural gas sector [1] - The service offers subscribers access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [2] Group 2 - A two-week free trial is available for new subscribers to explore the offerings related to oil and gas investments [3]
Financial Institutions(FISI) - 2025 Q1 - Quarterly Report
2025-05-05 20:05
Revenue and Income - Commercial business revenue increased to $17 million in Q1 2025 from $4 million in Q1 2024[228] - Total interest income rose by $2.6 million, or 2.6%, driven by a $7.4 million increase in rates despite a $1.1 million decrease in volume[230] - Total noninterest income decreased to $10.4 million in Q1 2025 from $10.9 million in Q1 2024, primarily due to the sale of the insurance subsidiary[234] - Investment advisory income increased by $155 thousand, or 6%, to $2.7 million in Q1 2025 compared to Q1 2024[235] - Income tax expense for Q1 2025 was $3.7 million, up from $356 thousand in Q1 2024, reflecting higher pre-tax income[243] Expenses and Efficiency - Total noninterest expense decreased significantly to $33.7 million in Q1 2025 from $54 million in Q1 2024, largely due to lower salaries and professional services expenses[239] - The efficiency ratio improved to 58.79% in Q1 2025 from 105.77% in Q1 2024, indicating better resource allocation[242] Credit Losses and Loan Portfolio - Provision for credit losses was $2.9 million in Q1 2025, compared to a benefit of $5.5 million in Q1 2024, reflecting loan growth and increased specific reserves[232] - The allowance for credit losses on loans was $48.964 million as of March 31, 2025, compared to $48.041 million at December 31, 2024[258] - The allowance for credit losses on loans increased to $49.0 million at March 31, 2025, up from $43.1 million at March 31, 2024, primarily due to increased loan balances and qualitative factors[264] - Non-performing loans decreased by $1.4 million to $40.0 million at March 31, 2025, compared to $41.4 million at March 31, 2024, representing 0.88% of total loans[271] - The ratio of allowance for credit losses to total loans was 1.08% at March 31, 2025, compared to 0.60% at March 31, 2024[264] - Total loans amounted to $4.55 billion, reflecting an increase of $74.1 million from $4.48 billion at December 31, 2024[258] - The composition of the loan portfolio included commercial business loans of $709.1 million (15.6% of total loans), up $43.8 million (7%) from December 31, 2024[258] - Total commercial mortgage loans reached $2.23 billion, representing 49% of total loans, with an increase of $28.7 million (1.3%) from $2.20 billion as of December 31, 2024[258] - The total consumer loans were $1.62 billion, or 35% of total loans, with a slight increase of $1.6 million from December 31, 2024[259] Deposits and Borrowings - Total deposits increased by $268.2 million, or 5%, to $5.37 billion as of March 31, 2025, compared to $5.10 billion at December 31, 2024[281] - Non-public deposits totaled $3.15 billion, representing 59% of total deposits as of March 31, 2025, down from 63% at December 31, 2024[282] - Public deposits increased to $1.22 billion, representing 23% of total deposits as of March 31, 2025, compared to 21% at December 31, 2024[283] - Reciprocal deposits rose to $796.6 million, accounting for 15% of total deposits as of March 31, 2025, up from $746.7 million at December 31, 2024[284] - Brokered deposits increased significantly to $204.3 million, representing 4% of total deposits as of March 31, 2025, compared to 2% at December 31, 2024[285] - Short-term borrowings decreased to $55 million as of March 31, 2025, down from $99 million at December 31, 2024[287] - Long-term borrowings remained stable at $124.9 million as of March 31, 2025, compared to $124.8 million at December 31, 2024[286] Capital and Liquidity - Total regulatory capital was $701.6 million as of March 31, 2025, with a total risk-based capital ratio of 13.09%[308] - Common Equity Tier 1 (CET1) capital was $556.7 million, representing a CET1 ratio of 10.38% as of March 31, 2025[308] - Shareholders' equity increased to $589.9 million at March 31, 2025, up $20.9 million from $569.0 million at December 31, 2024[304] - The company is classified as "well-capitalized" under the Basel III Capital Rules as of March 31, 2025[310] - The company actively manages liquidity to meet financial obligations, with structural liquidity ratios compliant with regulatory requirements[295] Investment Securities - The total investment securities portfolio was $1.1 billion as of March 31, 2025, with an increase in available-for-sale securities[245] - The available-for-sale investment securities portfolio had a net unrealized loss of $46.6 million at March 31, 2025, down from $61.6 million at December 31, 2024[246] - The Agency MBS portfolio as of March 31, 2025, had an aggregate fair value of $313.7 million with unrealized losses totaling $50.9 million[251] - 37 of the AFS securities were in an unrealized loss position for 12 months or longer, with unrealized losses of $48.9 million[251] - The fair value of non-Agency MBS was $359 thousand as of March 31, 2025, with no unrealized loss position[253] - The company does not consider any of the unrealized losses on Agency MBS as credit-related as of March 31, 2025[252] Economic Value and Interest Rate Sensitivity - Economic value of equity (EVE) at March 31, 2025 is $867,977, a decrease of $14,453 (-1.67%) from the pre-shock scenario compared to December 31, 2024[323] - Under the -200 basis points scenario, EVE changes by -0.33% to $865,086 at March 31, 2025, while it increases by 0.57% to $908,905 at December 31, 2024[323] - The sensitivity in the down rate shock scenarios to EVE becomes more negative at March 31, 2025, due to increased borrowings and a shift in deposit mix[323] - The overall value increase of the loan portfolio at March 31, 2025 is offset by deposits, leading to a decrease in EVE compared to December 31, 2024[323] - The estimated changes to net interest income over the 12-month period ending March 31, 2026, show a decrease of $17,486 (5.62%) under -300 bp scenario and an increase of $2,046 (1.02%) under +100 bp scenario[318] - The estimated changes to net interest income do not consider balance sheet growth or changes in the balance sheet mix[318]
Financial Institutions(FISI) - 2025 Q1 - Earnings Call Transcript
2025-04-29 17:07
Financial Data and Key Metrics Changes - Net interest income increased by over 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4][5] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the quarter was $16,900,000, with diluted EPS at $0.81, and return on average common equity at 11.92% [16][24] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by commercial and industrial (C&I) and commercial real estate (CRE) lending [7] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [9] - Consumer indirect balances were up nearly 1% from December 31, but down 7% year over year [11] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by higher public deposit balances and an increase in brokered deposits [13] - Nonperforming loans declined to $40,000,000, primarily related to two commercial relationships [10] Company Strategy and Development Direction - The company is focused on maintaining momentum from its capital raise and investment securities restructuring to deliver strong results throughout 2025 [5][24] - A new executive has joined the team to enhance customer growth and service excellence across the retail network [25][26] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the uncertain economic landscape, particularly concerning tariffs, inflation, and interest rates [8][9] - The company maintains a conservative outlook for loan growth, expecting it to be concentrated in the first half of the year due to economic uncertainties [9][33] Other Important Information - The company expects non-interest income to be between $10,000,000 to $10,500,000 per quarter for 2025, reflecting an upward revision [19] - The provision for credit losses was $2,900,000, down from $6,500,000 in the linked quarter, with a net charge-off ratio of 21 basis points [21][23] Q&A Session Summary Question: Loan growth outlook for the year - Management is comfortable with their guidance, noting that uncertainty has led customers to pause investments [32][33] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with CDs maturing at an average cost of about 4.5% [35][39] Question: COLI expected income over the next quarters - COLI income is expected to be elevated in the second quarter and then normalize, but at a higher level than previous quarters [42][44] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [46]
Financial Institutions(FISI) - 2025 Q1 - Earnings Call Transcript
2025-04-29 13:32
Financial Data and Key Metrics Changes - Net interest income increased by more than 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the first quarter was $16,900,000, with diluted EPS at $0.81, driven by improved net interest income and effective non-interest expense management [16] - The efficiency ratio was 59%, consistent with the full-year target of below 60% [5] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by both commercial and industrial (C&I) and commercial real estate (CRE) lending [7] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [8] - Consumer indirect balances were up just shy of 1% from December 31, but down 7% year over year [10] - Residential lending decreased by 1% from both the linked and year-ago quarters due to high competition and tight housing inventory [12] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by seasonally higher public deposit balances and an increase in brokered deposits [12] - Cash-related deposits totaled approximately $55,000,000 as of March 31, 2025, with expectations for a portion to remain on the balance sheet into the third quarter [13] Company Strategy and Development Direction - The company is focused on driving internal efficiency, controlling credit extension, and maintaining a disciplined approach to management [6] - The strategic focus includes sustainable customer growth and service excellence across its retail network and banking locations [25] - The company plans to continue evaluating options for subordinated debt facilities moving forward [14] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the industry due to uncertainties in the political and macroeconomic environments [6] - The company remains committed to a low single-digit growth guidance for 2025, reflecting a conservative approach amid economic volatility [8] - Management reiterated confidence in maintaining profitability and credit discipline despite the uncertain economic landscape [24] Other Important Information - The company welcomed a new executive with extensive experience in consumer banking, expected to contribute to strategic objectives [25] - The company filed its 2025 proxy statement, with new directors nominated to enhance corporate governance [26] Q&A Session Summary Question: Loan growth outlook for the year - Management is comfortable with their guidance, noting that uncertainty has led customers to pause anticipated investments [30][31] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with about $500,000,000 of CDs maturing in the next nine months [33][34] Question: Expected COLI income over the next quarters - COLI income is expected to be elevated in the second quarter before normalizing, with a significant increase in yield due to restructuring [41][42] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [45]