Financial Institutions, Inc. Announces Fourth Quarter and Full Year 2024 Results

Core Viewpoint - Financial Institutions, Inc. reported a significant net loss for the fourth quarter and full year of 2024, primarily due to a balance sheet restructuring and losses on investment securities, but anticipates improved performance moving forward due to strategic initiatives and capital raise efforts [3][4][6]. Financial Performance - The company recorded a net loss of $65.7 million in Q4 2024, compared to a net income of $13.5 million in Q3 2024 and $9.8 million in Q4 2023, resulting in a loss of $4.02 per diluted share [3][4]. - For the full year 2024, the net loss was $24.5 million, a stark contrast to the net income of $50.3 million in 2023, leading to a loss of $1.66 per diluted share [4][6]. - The provision for credit losses was $6.5 million in Q4 2024, up from $3.1 million in Q3 2024 and $5.3 million in Q4 2023 [3][34]. Balance Sheet Restructuring - The company executed a balance sheet restructuring plan, selling $653.5 million of available-for-sale investment securities, resulting in a pre-tax loss of $100.2 million [2][9]. - The net proceeds from the sale were reinvested into higher-yielding agency wrapped investment securities, which are expected to enhance future earnings [2][9]. Capital Management - The company completed an equity offering in December 2024, raising approximately $108.5 million, which was used to fund losses from the restructuring and improve capital positions [8][9]. - The common equity tier 1 ratio improved to 10.88% at year-end 2024, up 145 basis points from the previous year [8][30]. Loan and Deposit Trends - Total loans reached $4.48 billion at December 31, 2024, reflecting a modest increase of 1.7% from the previous quarter and 0.4% year-over-year [7][23]. - Total deposits decreased to $5.10 billion, down 3.8% from the previous quarter and 2.1% from the prior year, primarily due to seasonal public deposit outflows [7][24]. Noninterest Income and Expenses - The company reported a noninterest income loss of $91.0 million in Q4 2024, significantly down from $9.4 million in Q3 2024 and $15.4 million in Q4 2023, largely due to losses on investment securities [15][16]. - Noninterest expenses increased to $36.4 million in Q4 2024, compared to $32.5 million in Q3 2024, driven by nonrecurring expenses [17][18]. Credit Quality - Non-performing loans were $41.4 million, or 0.92% of total loans, at year-end 2024, slightly up from 0.93% in the previous quarter and significantly higher than 0.60% a year prior [32][33]. - The allowance for credit losses on loans to total loans ratio was 1.07% at year-end 2024, compared to 1.01% in the previous quarter and 1.14% a year ago [33][34].