EX-99.1 2 d722684dex991.htm EX-99.1

May 7, 2014 Annual Meeting of Shareholders Exhibit 99.1

John E. Benjamin John E. Benjamin Chairman

Introductions Introductions Call Meeting to Order Call Meeting to Order Director Nominations & Election Director Nominations & Election Ratify the Appointment of KPMG LLP as independent Ratify the Appointment of KPMG LLP as independent registered public accounting firm registered public accounting firm Non-Binding Vote on Executive Compensation Non-Binding Vote on Executive Compensation Management Presentation Management Presentation Voting Results Voting Results Closing Remarks Closing Remarks Agenda

Call Meeting to Order Call Meeting to Order Formal Meeting

Call Meeting to Order Call Meeting to Order Director Nominations & Election Director Nominations & Election Formal Meeting

Call Meeting to Order Call Meeting to Order Director Nominations & Election Director Nominations & Election Ratify the appointment of KPMG, LLP as independent Ratify the appointment of KPMG, LLP as independent registered public accounting firm registered public accounting firm Formal Meeting

Call Meeting to Order Call Meeting to Order Director Nominations & Election Director Nominations & Election Ratify the appointment of KPMG, LLP as independent Ratify the appointment of KPMG, LLP as independent registered public accounting firm registered public accounting firm Non-Binding Vote on Executive Compensation Non-Binding Vote on Executive Compensation Formal Meeting

Call Meeting to Order Call Meeting to Order Director Nominations & Election Director Nominations & Election Ratify the appointment of KPMG, LLP as independent Ratify the appointment of KPMG, LLP as independent registered public accounting firm registered public accounting firm Non-Binding Vote on Executive Compensation Non-Binding Vote on Executive Compensation Formal Meeting

Martin K. Birmingham Martin K. Birmingham President and Chief Executive Officer Management Presentation

Statements contained in this presentation which are not historical facts Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, and which pertain to future operating results of Financial Institutions, Inc. Inc. and and its its subsidiaries subsidiaries constitute constitute “forward “forward looking looking statements” statements” within within the meaning of the Private Securities Litigation Reform Act of 1995. the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements involve significant risks and These forward looking statements involve significant risks and uncertainties. We refer you to the documents the Company files from uncertainties. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission, time to time with the Securities and Exchange Commission, specifically the Company’s last filed Form 10-K and Form 10-Q. specifically the Company’s last filed Form 10-K and Form 10-Q. These documents contain and identify important factors that could These documents contain and identify important factors that could cause actual results to differ materially from those contained in our cause actual results to differ materially from those contained in our projections or forward looking statements. The Company assumes no projections or forward looking statements. The Company assumes no obligation to update any information presented herein. obligation to update any information presented herein.

The Fundamental Drivers of our Business Success • Core Deposit Growth • Quality Loan Growth • Sound Risk Management • Expense Management • Community Involvement • High Performance Culture • The Customer Experience

Core Deposit Growth $1,570 $1,699 $1,718 $2,039 $2,094 $2,268 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 2009Y 2010Y 2011Y 2012Y 2013Y 2014Q1 Total Deposits Core Deposits

Quality Loan Growth $1,264 $1,346 $1,485 $1,834 $1,849 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 2009Y 2010Y 2011Y 2012Y 2013Y 2014Q1 $1,706

Sound Risk Management

E f f i c i e n c y R a t i o E x p e n s e a s a P e r c e n t o f R e v e n u e Expense Management Note: Peer data as of 12/31/13 reflects median values for the SNL US Banks $1-$5B Index Peer 67.58% 65.52% 60.36% 60.55% 62.87% 58.48% 56.96% 50.00% 52.00% 54.00% 56.00% 58.00% 60.00% 62.00% 64.00% 66.00% 68.00% 2009Y 2010Y 2011Y 2012Y 2013Y 2014Q1

Community Involvement

High Performance Culture Engaged Index 10% Willingness to Recommend FSB 15% Teamwork & Personal Growth 10% Motivated to Go Above & Beyond 3% Source: Annual FSB Employee Assessments November 2012 compared to October 2013

The Customer Experience Customer Loyalty Overall Satisfaction Likelihood to Recommend Likelihood to Continue to Purchase Likelihood to Choose FSB Again 4% 4% 3% 4% 6% Source: Annual FSB Retail Customer Assessment; June 2013 compared to April 2014

4/30/13 4/30/14 Market capitalization $263.9 mil. $320.7 mil. Shares outstanding 13.8 mil. 13.9 mil. Price $19.13 $23.15 52-week range $15.71 - $17.92 - $20.83 $26.59 Annualized Dividend Rate $ 0.72 $ 0.76 Dividend yield 3.76% 3.28% Shareholder Value

Share Price $13.64 $23.15

Kevin B. Klotzbach Kevin B. Klotzbach EVP and Chief Financial Officer/Treasurer Financial Overview

22 Balance Sheet Growth $1,264 $1,346 $1,485 $1,706 $1,834 $1,717 $1,849 $1,743 $1,883 $1,932 $2,262 $2,320 $2,409 $2,533 $2,062 $2,214 $2,336 $2,764 $2,929 $2,828 $3,016 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2009Y 2010Y 2011Y 2012Y 2013Y 2013Q1 2014Q1

23 Loan Portfolio Composition 6.5% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2009Y 2010Y 2011Y 2012Y 2013Y 2013Q1 2014Q1 Comm Loan Comm Mortg Res Mortg Home Equity Indirect Consumer 9.1% 12.9% 15.9%

24 Note: Peer data reflects median values for the component companies within each group obtained from SNL Financial. NPAs / Assets 0.56% 1.49% 1.27% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 2009Y 2010Y 2011Y 2012Y 2013Y 2014Q1 FISI SNL US Banks $1-$5B Mid-Atl. Banks $1-$5B

Low risk security portfolio High percentage of the portfolio consists of securities backed by the U.S. government and agencies $860 million in total securities and the majority are utilized for various pledging purposes 25 Data as of December 31,2013 Low Risk Securities Portfolio 15.6% 23.7% 31.6% 29.1% US Gov't Agencies & GSE US Gov't Agencies CMO's US Gov't Agencies Mtg, Backed Pass-Throughs HTM Municipal Debt ($250 Million)

26 Deposit Composition $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2009Y 2010Y 2011Y 2012Y 2013Y 2013Q1 2014Q1 CDs >$100 CDs <$100 Savings & MM Int-bearing Demand Nonint-bearing Demand 18.1% 6.7% 13.4%

27 Capital Adequacy 12.08% 10.82% 7.63% 6.72% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 2009 2010 2011 2012 2013 Total Risk-Based Capital Tier 1 Risk-Based Capital Leverage Ratio Tang. Comm. Equity / Tang. Assets

28 Note: All periods exclude OTTI & Securities Gains Revenue Growth $72.3 $78.8 $81.9 $88.5 $91.6 $22.9 $23.3 $20.0 $19.9 $20.9 $22.2 $23.6 $5.7 $6.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 2009Y 2010Y 2011Y 2012Y 2013Y 2013Q1 Net Interest Income Noninterest Income $29.3 $28.6 2014Q1

29 Net Interest Income Continues to Grow… …despite margin compression headwinds Growing Net Interest Income 3.00% 3.20% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 2009Y 2010Y 2011Y 2012Y 2013Y Net Interest Income Net Interest Margin $91.6 3.64%

30 12/31/13 YTD $23.6 Million 12/31/12 YTD $21.2 Million All periods exclude OTTI & Securities Gains Noninterest Income 39% 21% 9% 8% 23% 42% 22% 10% 7% 19% Service Charges on Deposits ATM & Debit Card Revenue Investment Advisory Revenue Company Owned Life Insurance Other

31 Revenue grew by 25% since 2009 while expenses increased by only 11% Noninterest Expense 65.52% 58.48% 54.00% 56.00% 58.00% 60.00% 62.00% 64.00% 66.00% 68.00% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 2009Y 2010Y 2011Y 2012Y 2013Y Noninterest expense Efficiency Ratio

32 Provision for Loan Loss 0.47% 0.40% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% $0 $2 $4 $6 $8 $10 2009Y 2010Y 2011Y 2012Y 2013Y Provision Net Charge -Offs

33 Earnings $14.4 $21.3 $22.8 $23.4 $25.5 $0.99 $1.61 $1.49 $1.60 $1.75 $0.50 $1.00 $1.50 $2.00 $10.0 $15.0 $20.0 $25.0 $30.0 2009 2010 2011 2012 2013 Net Income Diluted EPS

34 Source: SNL Financial Note: FISI market data as of 4/30/2014. Peer data reflects median values for the component companies within each group as of 3/31/14. Dividend Yield 3.28% 2.10% 1.63% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% FISI Mid-Atl. Banks $1-$5B SNL US Banks $1-$5B

35 Source: SNL Financial Note: Market data as of 4/30/2014. Peer data reflects median values for the component companies within each group Total Shareholder Return 82% 68% 71% 25% 22% 23% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% FISI Mid-Atl. Banks $1-$5B SNL US Banks $1-$5B 5 Year Return 1 Year Return

Voting Results John E. Benjamin John E. Benjamin Chairman

Closing Remarks John E. Benjamin John E. Benjamin Chairman

May 7, 2014 Annual Meeting of Shareholders