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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, reflecting improved net interest income and effective non-interest expense management [15] - The efficiency ratio was 59%, consistent with the full-year target of below 60% [5] - Annualized return on average assets was 110 basis points, while return on average equity was 11.82% [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 [6] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [8] - Consumer indirect lending 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 maintaining momentum from its capital raise and investment securities restructuring to deliver strong results and profitability throughout 2025 [5] - A new executive was welcomed to the team to enhance customer growth and service excellence across the retail network [25] - The company intends to remain disciplined in credit extension and management amid a challenging economic environment [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan growth, indicating that uncertainty in the economic landscape may lead to a pause in anticipated investments by customers [30] - The company maintains a low single-digit growth guidance for 2025, reflecting a conservative approach given inflationary pressures and economic uncertainty [8] - Management reiterated a commitment to effective expense management while investing in people, processes, and technology for future growth [20] Other Important Information - The company expects non-interest income to be between $10,000,000 to $10,500,000 per quarter for 2025, an increase from previous guidance [18] - The provision for credit losses was $2,900,000 in the current quarter, down from $6,500,000 in the linked quarter [21] Q&A Session Summary Question: Loan growth outlook and conservativeness - Management is comfortable with their guidance, noting that uncertainty has led customers to pause investments [30] 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: COLI expected income over the next quarters - COLI income is expected to be elevated in Q2 and then normalize, but at a higher level than previous quarters [40][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 [43]
Financial Institutions(FISI) - 2025 Q1 - Earnings Call Presentation
2025-04-29 01:07
Investor Presentation Nasdaq: FISI First Quarter 2025 April 28, 2025 Important Information Safe Harbor Statement & Other Information 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 C ...
Financial Institutions (FISI) Surpasses Q1 Earnings Estimates
ZACKS· 2025-04-28 22:31
Core Viewpoint - Financial Institutions (FISI) reported quarterly earnings of $0.81 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and showing significant growth from $0.11 per share a year ago, indicating a strong earnings surprise of 9.46% [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates only once in the last four quarters [2] - Financial Institutions posted revenues of $57.24 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.23%, compared to $50.98 million in the same quarter last year [2] - The current consensus EPS estimate for the upcoming quarter is $0.79, with expected revenues of $58.74 million, and for the current fiscal year, the EPS estimate is $3.24 on revenues of $238.18 million [7] Group 2: Stock Performance and Outlook - Financial Institutions shares have declined approximately 12.6% since the beginning of the year, while the S&P 500 has decreased by 6.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] - The outlook for the industry, specifically the Banks - Northeast sector, is relatively strong, ranking in the top 23% of over 250 Zacks industries, suggesting potential for better performance compared to lower-ranked industries [8]
Financial Institutions(FISI) - 2025 Q1 - Quarterly Results
2025-04-28 20:06
Financial Performance - The Company reported net income of $16.9 million for Q1 2025, a significant recovery from a net loss of $82.8 million in Q4 2024 and an increase from net income of $2.1 million in Q1 2024[2] - Noninterest income for Q1 2025 was $10.4 million, a recovery from a noninterest loss of $91.0 million in Q4 2024[11] - Net income available to common shareholders in Q1 2025 was $16,513,000, compared to a loss of $83,176,000 in Q4 2024[39] - Earnings per share (diluted) for Q1 2025 was $0.81, recovering from a loss of $5.07 in Q4 2024[39] - Return on average assets (annualized) for Q1 2025 was 1.10%, a recovery from -5.38% in Q4 2024[39] - The efficiency ratio improved to 58.79% in Q1 2025 from 117.13% in Q4 2024, indicating better cost management[39] Interest Income and Margin - Net interest income increased to $46.9 million in Q1 2025, up $5.2 million (12.6%) from Q4 2024 and up $6.8 million (16.9%) from Q1 2024[5] - The net interest margin expanded to 3.35% in Q1 2025, an increase of 44 basis points from Q4 2024 and 57 basis points from Q1 2024[5] - Interest income for Q1 2025 was $81,051,000, an increase from $78,413,000 in Q1 2024, representing a growth of 2.1%[39] - Net interest income after provision for credit losses in Q1 2025 was $43,936,000, compared to $45,538,000 in Q1 2024, a decrease of 3.5%[39] Loans and Deposits - Total loans reached $4.55 billion at March 31, 2025, reflecting a quarterly increase of $74.1 million (1.7%) and a year-over-year increase of $111.2 million (2.5%)[5] - Total deposits were $5.37 billion at March 31, 2025, up $268.2 million (5.3%) from December 31, 2024, but down $23.8 million (0.4%) from March 31, 2024[5] - Total loans for Q1 2025 reached $4,493,825, an increase from $4,434,365 in Q4 2024, representing a growth of 1.3%[41] - Total deposits for Q1 2025 were $5,213,376, slightly down from $5,241,779 in Q4 2024, a decrease of 0.5%[41] Credit Quality - Non-performing loans were $40.0 million, or 0.88% of total loans, at March 31, 2025, down from $41.4 million or 0.92% at December 31, 2024[25] - The allowance for credit losses on loans to total loans ratio was 1.08% at March 31, 2025, compared to 1.07% at December 31, 2024[26] - Provision for credit losses was $2.9 million in the current quarter, compared to $6.5 million in the linked quarter[28] - The ratio of allowance for credit losses on loans to non-performing loans was 122% at March 31, 2025, down from 161% at March 31, 2024[29] - The provision for credit losses in Q1 2025 was $2,928,000, down from $6,461,000 in Q4 2024, indicating improved credit quality[39] - Net charge-offs for Q1 2025 totaled $2,369, a decrease from $2,778 in Q4 2024, reflecting a decline of 14.7%[43] Capital and Equity - Shareholders' equity increased to $589.9 million at March 31, 2025, up from $569.0 million at December 31, 2024, and $445.7 million at March 31, 2024[21] - Common book value per share increased to $28.48 at March 31, 2025, up $1.00 or 3.6% from $27.48 at December 31, 2024[22] - Common Equity Tier 1 Capital Ratio was 10.38% at March 31, 2025, down from 10.54% at December 31, 2024[27] - The leverage ratio was 9.24% at March 31, 2025, compared to 9.15% at December 31, 2024[27] - Tangible common equity increased to $511,992 thousand, up from $490,941 thousand at December 31, 2024, marking a growth of 4.28%[38] - The common equity increased to $561,921 in Q1 2025 from $499,910 in Q4 2024, representing a growth of 12.4%[41] Dividends - The Company approved a 3.3% increase in its quarterly cash dividend to $0.31 per common share, reflecting confidence in its long-term growth strategy[5] - The Company declared a common stock dividend of $0.31 per share, an increase of $0.01 or 3.3% over the linked and year-ago quarters, returning more than 37% of first quarter net income to common shareholders[23] - The company declared cash dividends of $0.31 per share in Q1 2025, slightly up from $0.30 in Q4 2024[39] Assets - Total assets increased to $6,340,492 thousand as of March 31, 2025, up from $6,117,085 thousand at December 31, 2024, representing a growth of 3.66%[38] - Total interest-earning assets increased to $5,733,743 thousand, up from $5,602,570 thousand at December 31, 2024, reflecting a growth of 2.34%[38] - Total assets as of Q1 2025 were $6,220,187, up from $6,121,449 in Q4 2024, marking an increase of 1.6%[41] - Average assets for Q1 2025 were $6,220,187 thousand, compared to $6,225,760 thousand in Q1 2024, showing a marginal decrease of 0.09%[44] Conference Call - The Company will host an earnings conference call on April 29, 2025, at 8:30 a.m. Eastern Time[31]
Financial Institutions, Inc. Announces First Quarter 2025 Results
Globenewswire· 2025-04-28 20:05
Core Insights - Financial Institutions, Inc. reported a net income of $16.9 million for Q1 2025, a significant recovery from a net loss of $82.8 million in Q4 2024 and an increase from $2.1 million in Q1 2024 [2][4][6] - The company experienced a 12.6% increase in net interest income, reaching $46.9 million, and a net interest margin expansion of 44 basis points to 3.35% [4][6][11] - Total loans increased by 1.7% quarter-over-quarter to $4.55 billion, driven by commercial business and mortgage lending [5][17][19] - Total deposits rose by 5.3% from the previous quarter to $5.37 billion, influenced by seasonal public deposit inflows [20][22] - The company declared a quarterly cash dividend of $0.31 per common share, reflecting a 3.3% increase, returning over 37% of Q1 net income to common shareholders [24] Financial Performance - Net income available to common shareholders was $16.5 million, or $0.81 per diluted share, compared to a net loss of $83.2 million, or $(5.07) per diluted share, in the previous quarter [2][4] - Noninterest income for Q1 2025 was $10.4 million, a recovery from a noninterest loss of $91.0 million in Q4 2024 [6][12] - Noninterest expense decreased to $33.7 million from $59.4 million in the previous quarter [14] Loan and Deposit Metrics - Total loans increased by $74.1 million, or 1.7%, during the quarter, with commercial business loans up 6.6% from the previous quarter [19][20] - Total deposits reached $5.37 billion, up $268.2 million from the previous quarter, with public deposit balances representing 23% of total deposits [20][22] Credit Quality - The company reported improved credit quality metrics, with net charge-offs at 0.21% of average loans, down from 0.25% in the previous quarter [29][31] - Non-performing loans were $40.0 million, or 0.88% of total loans, a slight decrease from the previous quarter [29][30] Capital Management - Total assets increased to $6.34 billion, up $223.4 million from the previous quarter [17][22] - Shareholders' equity rose to $589.9 million, driven by additional paid-in-capital from a common stock capital raise [22][23] - The company maintained strong capital ratios, with a Common Equity Tier 1 Capital Ratio of 10.38% [28][43]
Financial Institutions, Inc. Schedules First Quarter 2025 Earnings Release and Conference Call
Globenewswire· 2025-04-01 20:05
Group 1 - Financial Institutions, Inc. will release its first quarter results for the period ending March 31, 2025, after market close on April 28, 2025 [1] - An earnings conference call and audio webcast will be hosted on April 29, 2025, at 8:30 a.m. Eastern Time, led by the President and CEO, Martin K. Birmingham, and CFO, W. Jack Plants II [2] - The company has approximately $6.1 billion in assets as of December 31, 2024, and offers banking and wealth management products and services [3] Group 2 - Five Star Bank, a subsidiary of Financial Institutions, Inc., provides consumer and commercial banking and lending services across Western and Central New York [3] - Courier Capital, LLC, another subsidiary, offers customized investment management, financial planning, and consulting services to a diverse clientele [3]
Financial Institutions(FISI) - 2024 Q4 - Annual Report
2025-03-12 20:05
Financial Position - As of December 31, 2024, the Company had consolidated total assets of $6.12 billion, deposits of $5.10 billion, and shareholders' equity of $569.0 million[21]. - The Bank reported total assets of $6.08 billion, net loans of $4.43 billion, and deposits of $5.15 billion as of December 31, 2024[23]. - Courier Capital managed $3.09 billion in assets and generated total revenue of $10.3 million for the year ended December 31, 2024[24]. - As of December 31, 2024, the bank's portfolio of commercial business and commercial mortgage loans totaled $1.25 billion, representing 28% of total loans[145]. - Non-performing assets were $41.5 million, or 0.68% of total assets, as of December 31, 2024[146]. - At December 31, 2024, the bank had $3.56 billion in deposit liabilities with no fixed term, accounting for 70% of total deposits[151]. - Municipal deposits amounted to $1.07 billion, or 21% of total deposits, as of December 31, 2024[153]. - The company has $58.1 million in goodwill and $2.6 million in other intangible assets as of December 31, 2024[181]. Revenue and Income - The Company aims to increase market share within existing markets while exploring growth opportunities in non-interest income through acquisitions[31]. - The Company is committed to maintaining a diversified revenue stream and exploring strategic partnerships that align with its core competencies[32]. - The company declared dividends of $21.0 million in 2024 and $14.0 million in 2023[101]. - The company generates a significant portion of its revenue from dividends from its Bank subsidiary, which are subject to regulatory limitations[190]. - Investment advisory revenue may decrease due to poor investment performance, impacting overall revenues and net income[175]. - The company’s investment advisory business relies heavily on assets under management, which are influenced by market conditions and competition[176]. Loan Portfolio - The commercial business loan portfolio totaled $665.3 million, representing 15% of the total loan portfolio, with 21% at fixed interest rates and 79% at variable interest rates as of December 31, 2024[53]. - The commercial mortgage loan portfolio amounted to $2.20 billion, accounting for 49.1% of the total loan portfolio, with 34% at fixed interest rates and 66% at variable interest rates as of December 31, 2024[54]. - The residential real estate loan portfolio reached $650.2 million, or 15% of the total loan portfolio, with 74% at fixed interest rates as of December 31, 2024[58]. - The consumer indirect loan portfolio totaled $845.8 million, representing 19% of the total loan portfolio, primarily concentrated in indirect automobile loans as of December 31, 2024[60]. - The company exited the Pennsylvania automobile market effective January 1, 2024, to focus on its core Upstate New York market[61]. Regulatory Environment - The company is subject to extensive regulation under federal and state laws, primarily for the protection of depositors and the banking system[80]. - The company must comply with capital adequacy standards established by the Federal Reserve, based on Basel III[87]. - The company is required to maintain a leverage ratio of at least 4.0%[93]. - The company must notify the FRB prior to declaring and paying cash dividends if net earnings are insufficient to fund the dividend[100]. - The FDIC issued a special assessment in 2023 for banks with uninsured deposits exceeding $5 billion[106]. - The company did not opt into using the Community Bank Leverage Ratio and determined to comply with the Basel III Rules instead[92]. - The company is subject to a minimum capital conservation buffer of 2.5%[89]. - The most recent CRA evaluation resulted in an overall rating of "Satisfactory" for the company[109]. Risk Management - The Company is subject to various risks, including credit losses, regulatory changes, and market volatility, which could impact financial performance[19]. - The allowance for credit losses is established through charges to earnings, reflecting management's estimate of probable credit losses in the portfolio[68]. - The company has identified nine portfolio segments of loans for estimating the allowance for credit losses, including Commercial Loans/Lines and Residential Real Estate Loans[69]. - The company faces risks related to interest rate fluctuations, which can impact net interest income, loan demand, and defaults[192]. - The Federal Reserve's monetary policies have led to increased interest rates, affecting the company's financial conditions and operations[193]. - The company’s risk management framework must effectively identify and mitigate risks to avoid unexpected losses[191]. Employee and Workplace Culture - The Company prioritizes talent attraction and retention by fostering an inclusive and healthy workplace[34]. - The company was certified by Great Place To Work® for the second time in 2024, indicating a strong employee satisfaction culture[42]. - As of December 31, 2024, the company had 598 employees, a decrease of 26 employees or 4% from the previous year, primarily due to the sale of its insurance subsidiary[35]. Strategic Initiatives - The Company plans to leverage digital channels to enhance customer engagement and expand its reach into new geographies[29]. - The company aims to expand its branch network and invest in digital banking, but failure to implement these growth strategies could negatively affect loan portfolio quality and profitability[183]. - The company plans to pursue a growth strategy by expanding its branch network and considering acquisitions of various financial services firms, although competition for suitable targets may increase costs and limit options[186]. - The company has implemented a program to provide financial products and services to legal cannabis-related businesses, although exposure is expected to be tempered by the exit from the BaaS line of business[115]. Cybersecurity and Technology - The company relies heavily on information technology and internet services to process a large volume of daily transactions, increasing vulnerability to cyber-attacks and system failures[205]. - The company may need to allocate significant additional resources to enhance systems and address vulnerabilities due to evolving cyber threats[206]. - Compliance with evolving cybersecurity regulations is critical, as failure to do so could result in regulatory sanctions and reputational damage[207]. - Emerging technologies, including AI and cloud computing, present both opportunities and risks for the company, particularly regarding data security and operational efficiency[201][202]. Legal and Compliance Issues - Legal and regulatory proceedings could result in substantial costs and adversely affect the bank's financial condition and operating results[158]. - Non-compliance with the USA PATRIOT Act and Bank Secrecy Act could lead to fines and sanctions, affecting business operations[165]. - The company has adopted policies to comply with the requirements of the AMLA and related regulations, ensuring effective risk assessment processes[120]. - Regulatory authorities have increased scrutiny of the Bank Secrecy Act (BSA) and anti-money laundering programs, with potential legal and reputational consequences for non-compliance[119]. Capital and Funding - The company completed a public offering of 4,600,000 shares of common stock at $25.00 per share, resulting in net proceeds of $108.6 million[77]. - The company may need to raise additional capital in the future, which could be challenging if market conditions are unfavorable[200]. - Future capital resources may be increased through debt or equity securities, which could dilute current shareholders and affect common stock value[209]. - Provisions in the company's certificate of incorporation and bylaws may create anti-takeover effects, making acquisitions more difficult[210].
Financial Institutions, Inc. Settles Auto Lending Litigation
Globenewswire· 2025-03-10 20:05
Core Viewpoint - Financial Institutions, Inc. has settled civil litigation related to its auto loan notification process, which had been ongoing since 2017, and will record a litigation accrual of $23.0 million in its fourth quarter 2024 financial statements [2]. Group 1: Legal Settlement - The legal action was related to language in repossession notices issued to defaulting borrowers between 2011 and 2021 [2]. - The settlement agreement was executed on March 7, 2025, and is subject to court approval [2]. - The company does not expect to accrue additional amounts for this matter in 2025 or future periods and anticipates no changes to its previously published 2025 guidance [2]. Group 2: Financial Impact - The litigation accrual of $23.0 million will result in an after-tax impact of $17.1 million [2]. - Details regarding the financial impact of the litigation accrual on fourth quarter and full-year 2024 results were included in Current Reports on Form 8-K filed with the SEC [2]. Group 3: Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.1 billion in assets as of December 31, 2024 [4]. - The company offers banking and wealth management products and services through its subsidiary, Five Star Bank, which serves individuals, municipalities, and businesses in New York [4]. - Courier Capital, LLC, a subsidiary, provides customized investment management and financial planning services [4].
Five Star Bank Appoints Eric Marks Chief Consumer Banking Officer
Globenewswire· 2025-03-06 21:05
Core Viewpoint - Financial Institutions, Inc. has appointed Eric W. Marks as Senior Vice President and Chief Consumer Banking Officer of Five Star Bank, bringing nearly 20 years of banking experience to the role [1][2]. Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.1 billion in assets as of December 31, 2024, offering banking and wealth management products and services [5]. - Five Star Bank, a subsidiary of Financial Institutions, Inc., provides consumer and commercial banking and lending services across Western and Central New York [5]. Leadership Appointment - Eric W. Marks will oversee the Bank's consumer lines of business, including Retail Banking, Residential Mortgage, and Small Business Banking, as well as the Customer Contact Center and Collections departments [2]. - Marks has a strong background in consumer banking leadership, financial oversight, and strategic planning, which will aid in driving sustainable customer growth and service excellence [2][3]. - He previously served as Retail Segment Chief Financial Officer at M&T Bank, where he held various roles over a 19-year tenure [3]. Strategic Focus - The appointment of Marks is expected to support the continued evolution and growth of Five Star Bank's consumer banking offerings, enhancing customer experience and community engagement [3]. - Marks expressed enthusiasm for joining a community bank with a rich history in Upstate New York and aims to deliver a simple, connected, and trusted banking experience [3][4].
Should Value Investors Buy Financial Institutions (FISI) Stock?
ZACKS· 2025-02-17 15:46
Core Insights - The article emphasizes the importance of value investing as a popular strategy for identifying undervalued stocks that offer potential profits [2][3] - Zacks has developed a Style Scores system to help investors find stocks with specific traits, particularly in the Value category, where stocks with "A" grades and high Zacks Ranks are highlighted as strong value stocks [3] Company Analysis: Financial Institutions (FISI) - FISI currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4] - The stock has a P/E ratio of 8.48, significantly lower than the industry average P/E of 11.13, suggesting it may be undervalued [4] - FISI's Forward P/E has fluctuated between 5.47 and 9.35 over the past year, with a median of 7.65, indicating variability in its valuation [4] - The P/B ratio for FISI is 0.91, compared to the industry average of 1.36, further supporting the notion of undervaluation [5] - Over the past year, FISI's P/B ratio has ranged from 0.59 to 0.95, with a median of 0.79, reflecting its attractive valuation metrics [5] - FISI's P/S ratio stands at 1.22, lower than the industry's average P/S of 1.93, reinforcing its potential as a value investment [6] Company Analysis: First Bank (FRBA) - First Bank has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong investment potential [6] - The P/B ratio for First Bank is 0.74, which is also below the industry average of 1.36, suggesting it may be undervalued [7] - Over the past year, First Bank's P/B ratio has varied between 0.60 and 0.79, with a median of 0.70, indicating consistent valuation metrics [7] - Both FISI and FRBA are highlighted as likely undervalued stocks, supported by their strong earnings outlooks and favorable valuation metrics [7]