EX-99.1 2 fisi-ex991_6.htm EX-99.1 fisi-ex991_6.htm

Exhibit 99.1

Financial Institutions, Inc.

 

 

 

 

 

NEWS RELEASE

 

 

For Immediate Release

 

 

FINANCIAL INSTITUTIONS, INC. ANNOUNCES SECOND QUARTER RESULTS

WARSAW, N.Y., July 29, 2019 – Financial Institutions, Inc. (Nasdaq:FISI) (the “Company”), parent company of Five Star Bank (the “Bank”), SDN Insurance Agency, LLC (“SDN”), Courier Capital, LLC (“Courier Capital”) and HNP Capital, LLC (“HNP Capital”),  today reported financial and operational results for the quarter ended June 30, 2019.

Net income for the quarter was $11.4 million compared to $12.2 million for the second quarter of 2018. After preferred dividends, net income available to common shareholders was $11.0 million for the quarter, or $0.69 per diluted share, compared to $11.8 million, or $0.74 per diluted share, for the second quarter of 2018. Second quarter 2018 net income was favorably impacted by a low provision for loan losses of $40 thousand, the result of a combination of factors described in the Credit Quality section below.

Pre-tax pre-provision income(1) for the quarter was $16.7 million compared to $15.2 million for the second quarter of 2018, an increase of $1.5 million, or 9.9%.  

Second Quarter 2019 Highlights:

 

•

Net income of $11.4 million was third highest in Company history

 

•

Pre-tax pre-provision income of $16.7 million was the highest in Company history

 

•

Net interest income of $32.5 million was $2.2 million, or 7.4%, higher than the second quarter of 2018 and the highest in Company history

 

•

Net interest margin expanded to 3.28% as compared to 3.16% in the second quarter of 2018

 

•

Return on average assets was 1.06%

 

•

Total assets at quarter-end were $4.31 billion, an increase of $122.6 million from June 30, 2018

President and Chief Executive Officer Martin K. Birmingham stated, “We delivered a strong second quarter and first half of 2019 as we benefitted from our investments in people and systems and the execution of our strategic initiatives. For the second quarter in a row we generated record-breaking pre-tax pre-provision income.

“Our commercial and residential loan portfolios grew by 3.7% and 2.1% quarter-over-quarter and 16.8% and 11.4% year-over-year, respectively. Strong asset quality was illustrated by low annualized net charge-offs of 0.16% of average loans, the Company’s lowest quarterly charge-off level in more than ten years. Common book value per share increased by 3.3% in the quarter and tangible common book value per share(1) grew by 4.2%. Our capital ratios improved once again with a 30-basis-point increase in common equity to assets and a 32-basis-point increase in tangible common equity to tangible assets(1), or TCE ratio, to 7.77%.”

Chief Financial Officer Justin K. Bigham added, “Net interest margin for the quarter was favorably impacted by our ongoing balance sheet repositioning as we continue to redeploy assets from investment securities into higher-yielding loans. A continued focus on efficiency drove quarterly operating leverage year-over-year. We also made progress on our strategy to grow our relationship-based commercial and residential mortgage businesses and right-size our consumer indirect portfolio.”

Net Interest Income and Net Interest Margin

Net interest income was $32.5 million for the quarter, $672 thousand higher than the first quarter of 2019 and $2.2 million higher than the second quarter of 2018.

 

•

Average interest-earning assets for the quarter were $4.01 billion, $11.7 million higher than the first quarter of 2019 and $124.4 million higher than the second quarter of 2018. The primary driver of the increase was organic loan growth.

 

•

Second quarter 2019 net interest margin was 3.28%, four basis points higher than the first quarter of 2019 and 12 basis points higher than the second quarter of 2018. Net interest margin has been positively impacted by the continued repositioning of the Company’s balance sheet, as a growing proportion of interest-earning assets are deployed into loans.


Page 1

 

Noninterest Income

Noninterest income was $9.2 million for the quarter, compared to $9.1 million in the first quarter of 2019 and $8.4 million in the second quarter of 2018.

 

•

ATM and debit card charges of $1.7 million was $296 thousand higher than the first quarter of 2019 and $208 thousand higher than the second quarter of 2018, primarily due to an increase in consumer debit card activity.

 

•

Net gain on sale of loans held for sale of $407 thousand was $225 thousand higher than the first quarter of 2019 and $276 thousand higher than the second quarter of 2018. This income fluctuates based upon the timing of loan and sale closings.

 

•

Investment advisory fees were $2.3 million in the second quarter of 2019 compared to $2.2 million in the first quarter of 2019 and $1.9 million in the second quarter of 2018. The increase compared to the second quarter of 2018 was primarily the result of the June 1, 2018 acquisition of HNP Capital.

 

•

A loss from derivative instruments of $45 thousand was recognized in the second quarter of 2019 driven by significantly lower volume of new interest rate swap transactions. As a result, the income recognized from new transactions was more than offset by the credit valuation adjustment associated with our interest rate swap portfolio.

 

•

Insurance income was $872 thousand in the second quarter of 2019 compared to $1.4 million in the first quarter of 2019 and $1.0 million in the second quarter of 2018. The decrease compared to the first quarter of 2019 was the result of seasonality in this line of business. The decrease compared to the second quarter of 2018 was primarily due to higher contingent and transaction revenue in the prior year period.

Noninterest Expense

Noninterest expense was $25.0 million in the second quarter of 2019, compared to $25.2 million in the first quarter of 2019 and $23.4 million in the second quarter of 2018.

 

•

Salaries and employee benefits expense totaled $13.2 million in the second quarter of 2019, $14.0 million in the first quarter of 2019 and $12.9 million in the second quarter of 2018. The decrease compared to the first quarter of 2019 was primarily due to favorable health claims in the second quarter combined with the impact of higher payroll-related taxes incurred in the first quarter. The increase compared to the second quarter of 2018 was primarily the result of investments in bank personnel and the 2018 acquisition of HNP Capital. The number of full-time equivalent employees was 689 at June 30, 2019, 687 at March 31, 2019, and 673 at June 30, 2018.  

 

•

Advertising and promotions expense of $1.1 million was $566 thousand higher than the first quarter of 2019 and $365 thousand higher than the second quarter of 2018 as a result of the timing of expenses related to the Five Star Bank branding campaign.

Income Taxes

Income tax expense was $2.9 million for the quarter compared to $3.0 million for each of the first quarter of 2019 and second quarter of 2018. The effective tax rate was 20.5% for the quarter compared to 20.8% for the first quarter of 2019 and 19.7% for the second quarter of 2018.

Effective tax rates are impacted by items of income and expense not subject to federal or state taxation. The Company’s effective tax rates differ from statutory rates primarily because of interest income from tax-exempt securities and earnings on company owned life insurance.

Balance Sheet and Capital Management

Total assets were $4.31 billion at June 30, 2019, up $11.4 million from $4.30 billion at March 31, 2019, and up $122.6 million from $4.19 billion at June 30, 2018.

Investment securities were $805.1 million at June 30, 2019, down $61.4 million from $866.5 million at March 31, 2019, and down $161.9 million from $967.0 million at June 30, 218. The decreases are the result of the redeployment of assets from investment securities into loans.

Total loans were $3.15 billion at June 30, 2019, up $42.5 million, or 1.4%, from March 31, 2019, and up $251.5 million, or 8.7%, from June 30, 2018.

 

•

Commercial business loans totaled $594.9 million, up $41.2 million, or 7.4%, from March 31, 2019, and up $87.9 million, or 17.3%, from June 30, 2018.

 

•

Commercial mortgage loans totaled $1.01 billion, up $16.8 million, or 1.7%, from March 31, 2019, and up $143.0 million, or 16.5%, from June 30, 2018.

 

•

Residential real estate loans totaled $546.0 million, up $11.3 million, or 2.1%, from March 31, 2019, and up $56.1 million, or 11.4%, from June 30, 2018.

 

•

Consumer indirect loans totaled $876.1 million, down $26.6 million, or 3.0%, from March 31, 2019, and down $30.1 million, or 3.3%, from June 30, 2018.

Page 2

 

Total deposits were $3.47 billion at June 30, 2019, $36.8 million or 1.1% lower than March 31, 2019, and $209.8 million or 6.4% higher than June 30, 2018. The decrease from March 31, 2019, was primarily due to public deposit seasonality while the increase from June 30, 2018, was primarily the result of successful business development efforts. Public deposit balances represented 26% of total deposits at June 30, 2019, compared to 28% of total deposits at March 31, 2019, and 26% at June 30, 2018.

Short-term borrowings were $308.5 million at June 30, 2019, an increase of $21.2 million from March 31, 2019, and a decrease of $164.3 million from June 30, 2018. Short-term borrowings are typically utilized to manage the seasonality of public deposits.

Shareholders’ equity was $422.4 million at June 30, 2019, compared to $408.3 million at March 31, 2019, and $386.9 million at June 30, 2018. Tangible common book value per share was $20.60 at June 30, 2019, an increase of $0.83 or 4.2% from $19.77 at March 31, 2019, and an increase of $2.36 or 12.9% from $18.24 at June 30, 2018.

During the second quarter of 2019, the Company declared a common stock dividend of $0.25 per common share. The dividend returned 36% of second quarter net income to common shareholders.

The Company’s regulatory capital ratios at June 30, 2019, compared to the prior quarter and prior year:

 

•

Leverage Ratio was 8.55%, compared to 8.36% and 8.10% at March 31, 2019, and June 30, 2018, respectively.

 

•

Common Equity Tier 1 Capital Ratio was 9.95%, compared to 9.87% and 9.82% at March 31, 2019, and June 30, 2018, respectively.

 

•

Tier 1 Capital Ratio was 10.45%, compared to 10.37% at each of March 31, 2019, and June 30, 2018.

 

•

Total Risk-Based Capital Ratio was 12.57%, compared to 12.50% and 12.66% at March 31, 2019, and June 30, 2018, respectively.

Credit Quality

Non-performing loans were $11.5 million at June 30, 2019, compared to $5.8 million at March 31, 2019, and $9.7 million at June 30, 2018. The increase was primarily the result of the internal downgrade of one commercial credit relationship with an unpaid principal balance of $5.6 million.

The second quarter 2019 provision for loan losses was $2.4 million compared to $1.2 million in the first quarter of 2019 and $40 thousand in the second quarter of 2018. Quarterly provision for loan losses varies based primarily on loan growth, charge-offs, collateral values and qualitative factors.

Net charge-offs were $1.2 million in the quarter, $533 thousand lower than the first quarter of 2019 and $432 thousand lower than the second quarter of 2018. The ratio of annualized net charge-offs to total average loans was 0.16% in the quarter, 0.23% in the first quarter of 2019 and 0.24% in the second quarter of 2018.

The Company has remained strategically focused on the importance of credit discipline, allocating what we believe are the necessary resources to credit and risk management functions as the loan portfolio has grown. The total non-performing loans to total loans ratio was 0.36% at June 30, 2019, compared to 0.19% at March 31, 2019 and 0.34% at June 30, 2018. The ratio of allowance for loan losses to non-performing loans was 300% at June 30, 2019, compared to 574% at March 31, 2019, and 349% at June 30, 2018.

Conference Call

The Company will host an earnings conference call and audio webcast on July 30, 2019, at 8:30 a.m. Eastern Time. The call will be hosted by Martin K. Birmingham, President and Chief Executive Officer, and Justin K. Bigham, Chief Financial Officer. The live webcast will be available in listen-only mode on the Company’s website at www.fiiwarsaw.com. Within the United States, listeners may also access the call by dialing 1-888-346-9290 and requesting the Financial Institutions, Inc. call. The webcast replay will be available on the Company’s website for at least 30 days.

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About Financial Institutions, Inc.

Financial Institutions, Inc. provides diversified financial services through its subsidiaries Five Star Bank, SDN, Courier Capital and HNP Capital. Five Star Bank provides a wide range of consumer and commercial banking and lending services to individuals, municipalities and businesses through a network of more than 50 offices throughout Western and Central New York State. SDN provides a broad range of insurance services to personal and business clients. Courier Capital and HNP Capital provide customized investment management, investment consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans. Financial Institutions, Inc. and its subsidiaries employ approximately 700 individuals. The Company’s stock is listed on the Nasdaq Global Select Market under the symbol FISI. Additional information is available at www.fiiwarsaw.com.

Non-GAAP Financial Information

In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to GAAP measures is included in Appendix A to this document.

 

The Company believes that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, performance trends and financial position. Our management uses these measures for internal planning and forecasting purposes and we believe that our presentation and discussion, together with the accompanying reconciliations, allows investors, security analysts and other interested parties to view our performance and the factors and trends affecting our business in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP measures and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure to evaluate the Company. Non-GAAP financial measures have inherent limitations, are not uniformly applied and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Safe Harbor Statement

This press release may contain forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “preliminary,” or “range.” Statements herein are based on certain assumptions and analyses by the Company and factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: the Company’s ability to implement its strategic plan, the Company’s ability to redeploy investment assets into loan assets, whether the Company experiences greater credit losses than expected, whether the Company experiences breaches of its, or third party, information systems, the attitudes and preferences of the Company’s customers, the Company’s ability to successfully integrate and profitably operate SDN, Courier Capital, HNP Capital and other acquisitions, the competitive environment, fluctuations in the fair value of securities in its investment portfolio, changes in the regulatory environment and the Company’s compliance with regulatory requirements, changes in interest rates, general economic and credit market conditions nationally and regionally. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and 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 SEC. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.

 

 

(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

*****

 

For additional information contact:

Shelly J. Doran

Director of Investor and External Relations

585-627-1362

sjdoran@five-starbank.com

 

 

 

 

 

 

 

Page 4

 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)

 

 

 

2019

 

 

2018

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

SELECTED BALANCE SHEET DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

108,988

 

 

$

79,786

 

 

$

102,755

 

 

$

117,331

 

 

$

89,094

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

406,509

 

 

 

427,545

 

 

 

445,677

 

 

 

458,310

 

 

 

492,228

 

Held-to-maturity

 

 

398,610

 

 

 

438,984

 

 

 

446,581

 

 

 

459,623

 

 

 

474,803

 

Total investment securities

 

 

805,119

 

 

 

866,529

 

 

 

892,258

 

 

 

917,933

 

 

 

967,031

 

Loans held for sale

 

 

2,045

 

 

 

2,069

 

 

 

2,868

 

 

 

3,166

 

 

 

2,014

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

 

594,923

 

 

 

553,745

 

 

 

557,861

 

 

 

537,942

 

 

 

507,021

 

Commercial mortgage

 

 

1,010,071

 

 

 

993,259

 

 

 

958,194

 

 

 

905,011

 

 

 

867,049

 

Residential real estate loans

 

 

546,031

 

 

 

534,691

 

 

 

524,155

 

 

 

507,598

 

 

 

489,940

 

Residential real estate lines

 

 

108,006

 

 

 

108,623

 

 

 

109,718

 

 

 

111,204

 

 

 

113,287

 

Consumer indirect

 

 

876,116

 

 

 

902,762

 

 

 

919,917

 

 

 

909,434

 

 

 

906,237

 

Other consumer

 

 

16,537

 

 

 

16,099

 

 

 

16,753

 

 

 

17,142

 

 

 

16,678

 

Total loans

 

 

3,151,684

 

 

 

3,109,179

 

 

 

3,086,598

 

 

 

2,988,331

 

 

 

2,900,212

 

Allowance for loan losses

 

 

34,434

 

 

 

33,327

 

 

 

33,914

 

 

 

33,955

 

 

 

33,955

 

Total loans, net

 

 

3,117,250

 

 

 

3,075,852

 

 

 

3,052,684

 

 

 

2,954,376

 

 

 

2,866,257

 

Total interest-earning assets

 

 

4,007,797

 

 

 

4,009,496

 

 

 

4,031,151

 

 

 

3,927,238

 

 

 

3,884,628

 

Goodwill and other intangible assets, net

 

 

75,534

 

 

 

75,850

 

 

 

76,173

 

 

 

78,853

 

 

 

79,188

 

Total assets

 

 

4,313,945

 

 

 

4,302,541

 

 

 

4,311,698

 

 

 

4,258,385

 

 

 

4,191,315

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

719,150

 

 

 

732,631

 

 

 

755,460

 

 

 

748,167

 

 

 

719,084

 

Interest-bearing demand

 

 

677,846

 

 

 

707,430

 

 

 

622,482

 

 

 

711,321

 

 

 

658,107

 

Savings and money market

 

 

966,509

 

 

 

1,016,666

 

 

 

968,897

 

 

 

988,486

 

 

 

1,012,972

 

Time deposits

 

 

1,108,484

 

 

 

1,052,110

 

 

 

1,020,068

 

 

 

1,037,755

 

 

 

872,004

 

Total deposits

 

 

3,471,989

 

 

 

3,508,837

 

 

 

3,366,907

 

 

 

3,485,729

 

 

 

3,262,167

 

Short-term borrowings

 

 

308,500

 

 

 

287,300

 

 

 

469,500

 

 

 

308,200

 

 

 

472,800

 

Long-term borrowings, net

 

 

39,237

 

 

 

39,220

 

 

 

39,202

 

 

 

39,184

 

 

 

39,167

 

Total interest-bearing liabilities

 

 

3,100,576

 

 

 

3,102,726

 

 

 

3,120,149

 

 

 

3,084,946

 

 

 

3,055,050

 

Shareholders’ equity

 

 

422,354

 

 

 

408,253

 

 

 

396,293

 

 

 

392,154

 

 

 

386,937

 

Common shareholders’ equity

 

 

405,026

 

 

 

390,925

 

 

 

378,965

 

 

 

374,825

 

 

 

369,608

 

Tangible common equity (1)

 

 

329,492

 

 

 

315,075

 

 

 

302,792

 

 

 

295,972

 

 

 

290,420

 

Accumulated other comprehensive loss

 

$

(13,160

)

 

$

(18,554

)

 

$

(21,281

)

 

$

(21,820

)

 

$

(20,296

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

15,995

 

 

 

15,941

 

 

 

15,929

 

 

 

15,925

 

 

 

15,924

 

Treasury shares

 

 

105

 

 

 

115

 

 

 

127

 

 

 

131

 

 

 

132

 

CAPITAL RATIOS AND PER SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

8.55

%

 

 

8.36

%

 

 

8.16

%

 

 

8.18

%

 

 

8.10

%

Common equity Tier 1 capital ratio

 

 

9.95

%

 

 

9.87

%

 

 

9.70

%

 

 

9.81

%

 

 

9.82

%

Tier 1 capital ratio

 

 

10.45

%

 

 

10.37

%

 

 

10.21

%

 

 

10.34

%

 

 

10.37

%

Total risk-based capital ratio

 

 

12.57

%

 

 

12.50

%

 

 

12.38

%

 

 

12.58

%

 

 

12.66

%

Common equity to assets

 

 

9.39

%

 

 

9.09

%

 

 

8.79

%

 

 

8.80

%

 

 

8.82

%

Tangible common equity to tangible assets (1)

 

 

7.77

%

 

 

7.45

%

 

 

7.15

%

 

 

7.08

%

 

 

7.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common book value per share

 

$

25.32

 

 

$

24.52

 

 

$

23.79

 

 

$

23.54

 

 

$

23.21

 

Tangible common book value per share (1)

 

$

20.60

 

 

$

19.77

 

 

$

19.01

 

 

$

18.59

 

 

$

18.24

 

 

                

 

(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

 

Page 5

 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)

 

 

 

Six Months Ended

 

 

2019

 

 

2018

 

 

 

June 30,

 

 

Second

 

 

First

 

 

Fourth

 

 

Third

 

 

Second

 

 

 

2019

 

 

2018

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

SELECTED INCOME STATEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

84,162

 

 

$

72,490

 

 

$

42,648

 

 

$

41,514

 

 

$

41,125

 

 

$

39,117

 

 

$

37,013

 

Interest expense

 

 

19,906

 

 

 

12,558

 

 

 

10,184

 

 

 

9,722

 

 

 

9,096

 

 

 

8,214

 

 

 

6,783

 

Net interest income

 

 

64,256

 

 

 

59,932

 

 

 

32,464

 

 

 

31,792

 

 

 

32,029

 

 

 

30,903

 

 

 

30,230

 

Provision for loan losses

 

 

3,547

 

 

 

2,989

 

 

 

2,354

 

 

 

1,193

 

 

 

3,884

 

 

 

2,061

 

 

 

40

 

Net interest income after provision

    for loan losses

 

 

60,709

 

 

 

56,943

 

 

 

30,110

 

 

 

30,599

 

 

 

28,145

 

 

 

28,842

 

 

 

30,190

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

3,436

 

 

 

3,441

 

 

 

1,756

 

 

 

1,680

 

 

 

1,866

 

 

 

1,813

 

 

 

1,703

 

Insurance income

 

 

2,250

 

 

 

2,417

 

 

 

872

 

 

 

1,378

 

 

 

1,012

 

 

 

1,501

 

 

 

1,018

 

ATM and debit card

 

 

3,182

 

 

 

2,952

 

 

 

1,739

 

 

 

1,443

 

 

 

1,643

 

 

 

1,557

 

 

 

1,531

 

Investment advisory

 

 

4,543

 

 

 

3,689

 

 

 

2,327

 

 

 

2,216

 

 

 

2,189

 

 

 

2,245

 

 

 

1,911

 

Company owned life insurance

 

 

834

 

 

 

893

 

 

 

424

 

 

 

410

 

 

 

460

 

 

 

440

 

 

 

443

 

Investments in limited partnerships

 

 

376

 

 

 

691

 

 

 

144

 

 

 

232

 

 

 

184

 

 

 

328

 

 

 

123

 

Loan servicing

 

 

214

 

 

 

223

 

 

 

104

 

 

 

110

 

 

 

122

 

 

 

96

 

 

 

108

 

Income (loss) from derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

instruments, net

 

 

123

 

 

 

347

 

 

 

(45

)

 

 

168

 

 

 

289

 

 

 

336

 

 

 

176

 

Net gain on sale of loans held for sale

 

 

589

 

 

 

227

 

 

 

407

 

 

 

182

 

 

 

266

 

 

 

303

 

 

 

131

 

Net (loss) gain on investment securities

 

 

113

 

 

 

7

 

 

 

166

 

 

 

(53

)

 

 

(39

)

 

 

(95

)

 

 

7

 

Net gain on other assets

 

 

58

 

 

 

12

 

 

 

9

 

 

 

49

 

 

 

1

 

 

 

37

 

 

 

9

 

Other

 

 

2,635

 

 

 

2,415

 

 

 

1,330

 

 

 

1,305

 

 

 

1,355

 

 

 

1,255

 

 

 

1,247

 

Total noninterest income

 

 

18,353

 

 

 

17,314

 

 

 

9,233

 

 

 

9,120

 

 

 

9,348

 

 

 

9,816

 

 

 

8,407

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

27,250

 

 

 

26,300

 

 

 

13,249

 

 

 

14,001

 

 

 

14,373

 

 

 

13,970

 

 

 

12,871

 

Occupancy and equipment

 

 

8,912

 

 

 

8,574

 

 

 

4,326

 

 

 

4,586

 

 

 

4,427

 

 

 

4,337

 

 

 

4,167

 

Professional services

 

 

2,090

 

 

 

1,779

 

 

 

932

 

 

 

1,158

 

 

 

780

 

 

 

1,353

 

 

 

896

 

Computer and data processing

 

 

2,573

 

 

 

2,593

 

 

 

1,350

 

 

 

1,223

 

 

 

1,238

 

 

 

1,291

 

 

 

1,358

 

Supplies and postage

 

 

1,032

 

 

 

1,060

 

 

 

498

 

 

 

534

 

 

 

487

 

 

 

485

 

 

 

548

 

FDIC assessments

 

 

998

 

 

 

988

 

 

 

486

 

 

 

512

 

 

 

489

 

 

 

498

 

 

 

480

 

Advertising and promotions

 

 

1,606

 

 

 

1,698

 

 

 

1,086

 

 

 

520

 

 

 

935

 

 

 

949

 

 

 

721

 

Amortization of intangibles

 

 

639

 

 

 

593

 

 

 

316

 

 

 

323

 

 

 

330

 

 

 

334

 

 

 

305

 

Goodwill impairment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,350

 

 

 

-

 

 

 

-

 

Other

 

 

5,074

 

 

 

3,967

 

 

 

2,760

 

 

 

2,314

 

 

 

2,394

 

 

 

2,304

 

 

 

2,102

 

Total noninterest expense

 

 

50,174

 

 

 

47,552

 

 

 

25,003

 

 

 

25,171

 

 

 

27,803

 

 

 

25,521

 

 

 

23,448

 

Income before income taxes

 

 

28,888

 

 

 

26,705

 

 

 

14,340

 

 

 

14,548

 

 

 

9,690

 

 

 

13,137

 

 

 

15,149

 

Income tax expense

 

 

5,966

 

 

 

5,247

 

 

 

2,939

 

 

 

3,027

 

 

 

2,199

 

 

 

2,560

 

 

 

2,979

 

Net income

 

 

22,922

 

 

 

21,458

 

 

 

11,401

 

 

 

11,521

 

 

 

7,491

 

 

 

10,577

 

 

 

12,170

 

Preferred stock dividends

 

 

731

 

 

 

731

 

 

 

366

 

 

 

365

 

 

 

365

 

 

 

365

 

 

 

366

 

Net income available to common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

shareholders

 

$

22,191

 

 

$

20,727

 

 

$

11,035

 

 

$

11,156

 

 

$

7,126

 

 

$

10,212

 

 

$

11,804

 

FINANCIAL RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic

 

$

1.39

 

 

$

1.30

 

 

$

0.69

 

 

$

0.70

 

 

$

0.45

 

 

$

0.64

 

 

$

0.74

 

Earnings per share – diluted

 

$

1.39

 

 

$

1.30

 

 

$

0.69

 

 

$

0.70

 

 

$

0.45

 

 

$

0.64

 

 

$

0.74

 

Cash dividends declared on common stock

 

$

0.50

 

 

$

0.48

 

 

$

0.25

 

 

$

0.25

 

 

$

0.24

 

 

$

0.24

 

 

$

0.24

 

Common dividend payout ratio

 

 

35.97

%

 

 

36.92

%

 

 

36.23

%

 

 

35.71

%

 

 

53.33

%

 

 

37.50

%

 

 

32.43

%

Dividend yield (annualized)

 

 

3.46

%

 

 

2.94

%

 

 

3.44

%

 

 

3.73

%

 

 

3.70

%

 

 

3.03

%

 

 

2.93

%

Return on average assets

 

 

1.08

%

 

 

1.05

%

 

 

1.06

%

 

 

1.09

%

 

 

0.70

%

 

 

1.00

%

 

 

1.18

%

Return on average equity

 

 

11.32

%

 

 

11.31

%

 

 

11.01

%

 

 

11.65

%

 

 

7.50

%

 

 

10.71

%

 

 

12.70

%

Return on average common equity

 

 

11.45

%

 

 

11.44

%

 

 

11.12

%

 

 

11.79

%

 

 

7.46

%

 

 

10.82

%

 

 

12.90

%

Return on average tangible common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity (1)

 

 

14.21

%

 

 

14.41

%

 

 

13.73

%

 

 

14.71

%

 

 

9.40

%

 

 

13.71

%

 

 

16.27

%

Efficiency ratio (2)

 

 

60.39

%

 

 

60.99

%

 

 

59.79

%

 

 

60.99

%

 

 

66.64

%

 

 

62.04

%

 

 

60.14

%

Effective tax rate

 

 

20.7

%

 

 

19.6

%

 

 

20.5

%

 

 

20.8

%

 

 

22.7

%

 

 

19.5

%

 

 

19.7

%

                

 

(1)

See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

 

(2)

The 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.

Page 6

 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)

(Amounts in thousands)

 

 

Six Months Ended

 

 

2019

 

 

2018

 

 

 

June 30,

 

 

Second

 

 

First

 

 

Fourth

 

 

Third

 

 

Second

 

 

 

2019

 

 

2018

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

SELECTED AVERAGE BALANCES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold and interest-

    earning deposits

 

$

18,050

 

 

$

28,183

 

 

$

18,145

 

 

$

17,955

 

 

$

25,411

 

 

$

17,955

 

 

$

34,357

 

Investment securities (1)

 

 

866,138

 

 

 

1,023,777

 

 

 

845,624

 

 

 

886,878

 

 

 

937,907

 

 

 

954,027

 

 

 

1,012,846

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

 

562,618

 

 

 

467,225

 

 

 

577,884

 

 

 

547,182

 

 

 

539,622

 

 

 

519,114

 

 

 

481,045

 

Commercial mortgage

 

 

994,271

 

 

 

831,925

 

 

 

1,010,544

 

 

 

977,818

 

 

 

944,476

 

 

 

896,159

 

 

 

842,422

 

Residential real estate loans

 

 

534,986

 

 

 

477,130

 

 

 

540,390

 

 

 

529,522

 

 

 

515,539

 

 

 

498,371

 

 

 

483,577

 

Residential real estate lines

 

 

108,673

 

 

 

114,776

 

 

 

107,826

 

 

 

109,529

 

 

 

110,236

 

 

 

111,762

 

 

 

113,948

 

Consumer indirect

 

 

901,556

 

 

 

892,433

 

 

 

891,967

 

 

 

911,252

 

 

 

914,636

 

 

 

904,480

 

 

 

899,069

 

Other consumer

 

 

15,972

 

 

 

16,712

 

 

 

15,721

 

 

 

16,226

 

 

 

16,671

 

 

 

16,633

 

 

 

16,449

 

Total loans

 

 

3,118,076

 

 

 

2,800,201

 

 

 

3,144,332

 

 

 

3,091,529

 

 

 

3,041,180

 

 

 

2,946,519

 

 

 

2,836,510

 

Total interest-earning assets

 

 

4,002,264

 

 

 

3,852,161

 

 

 

4,008,101

 

 

 

3,996,362

 

 

 

4,004,498

 

 

 

3,918,501

 

 

 

3,883,713

 

Goodwill and other intangible

    assets, net

 

 

75,871

 

 

 

75,271

 

 

 

75,711

 

 

 

76,033

 

 

 

78,314

 

 

 

79,047

 

 

 

75,957

 

Total assets

 

 

4,291,670

 

 

 

4,114,839

 

 

 

4,300,254

 

 

 

4,282,991

 

 

 

4,268,809

 

 

 

4,187,538

 

 

 

4,142,735

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

 

664,577

 

 

 

674,802

 

 

 

660,747

 

 

 

668,448

 

 

 

669,491

 

 

 

642,234

 

 

 

677,582

 

Savings and money market

 

 

981,439

 

 

 

1,022,554

 

 

 

996,878

 

 

 

965,829

 

 

 

1,011,427

 

 

 

978,578

 

 

 

1,032,425

 

Time deposits

 

 

1,086,670

 

 

 

881,863

 

 

 

1,096,544

 

 

 

1,076,687

 

 

 

1,032,632

 

 

 

946,499

 

 

 

906,271

 

Short-term borrowings

 

 

334,939

 

 

 

396,317

 

 

 

323,461

 

 

 

346,546

 

 

 

355,439

 

 

 

430,697

 

 

 

381,043

 

Long-term borrowings, net

 

 

39,218

 

 

 

39,147

 

 

 

39,227

 

 

 

39,209

 

 

 

39,191

 

 

 

39,174

 

 

 

39,156

 

Total interest-bearing liabilities

 

 

3,106,843

 

 

 

3,014,683

 

 

 

3,116,857

 

 

 

3,096,719

 

 

 

3,108,180

 

 

 

3,037,182

 

 

 

3,036,477

 

Noninterest-bearing demand deposits

 

 

720,727

 

 

 

693,648

 

 

 

714,205

 

 

 

727,321

 

 

 

733,717

 

 

 

730,960

 

 

 

699,112

 

Total deposits

 

 

3,453,413

 

 

 

3,272,867

 

 

 

3,468,374

 

 

 

3,438,285

 

 

 

3,447,267

 

 

 

3,298,271

 

 

 

3,315,390

 

Total liabilities

 

 

3,883,446

 

 

 

3,732,269

 

 

 

3,884,843

 

 

 

3,882,033

 

 

 

3,872,545

 

 

 

3,795,727

 

 

 

3,758,465

 

Shareholders’ equity

 

 

408,224

 

 

 

382,570

 

 

 

415,411

 

 

 

400,958

 

 

 

396,264

 

 

 

391,811

 

 

 

384,270

 

Common equity

 

 

390,896

 

 

 

365,242

 

 

 

398,083

 

 

 

383,630

 

 

 

378,936

 

 

 

374,482

 

 

 

366,942

 

Tangible common equity (2)

 

$

315,025

 

 

$

289,971

 

 

$

322,372

 

 

$

307,597

 

 

$

300,622

 

 

$

295,435

 

 

$

290,985

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

15,950

 

 

 

15,898

 

 

 

15,970

 

 

 

15,930

 

 

 

15,922

 

 

 

15,921

 

 

 

15,906

 

Diluted

 

 

15,997

 

 

 

15,945

 

 

 

16,015

 

 

 

15,978

 

 

 

15,971

 

 

 

15,964

 

 

 

15,948

 

SELECTED AVERAGE YIELDS:

(Tax equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

2.38

%

 

 

2.32

%

 

 

2.38

%

 

 

2.37

%

 

 

2.33

%

 

 

2.35

%

 

 

2.32

%

Loans

 

 

4.80

%

 

 

4.39

%

 

 

4.82

%

 

 

4.77

%

 

 

4.68

%

 

 

4.55

%

 

 

4.43

%

Total interest-earning assets

 

 

4.26

%

 

 

3.82

%

 

 

4.29

%

 

 

4.23

%

 

 

4.11

%

 

 

4.00

%

 

 

3.86

%

Interest-bearing demand

 

 

0.21

%

 

 

0.13

%

 

 

0.21

%

 

 

0.20

%

 

 

0.20

%

 

 

0.19

%

 

 

0.13

%

Savings and money market

 

 

0.43

%

 

 

0.22

%

 

 

0.44

%

 

 

0.41

%

 

 

0.38

%

 

 

0.33

%

 

 

0.26

%

Time deposits

 

 

2.12

%

 

 

1.41

%

 

 

2.17

%

 

 

2.06

%

 

 

1.88

%

 

 

1.69

%

 

 

1.49

%

Short-term borrowings

 

 

2.71

%

 

 

1.84

%

 

 

2.71

%

 

 

2.70

%

 

 

2.56

%

 

 

2.24

%

 

 

2.01

%

Long-term borrowings, net

 

 

6.30

%

 

 

6.31

%

 

 

6.30

%

 

 

6.30

%

 

 

6.30

%

 

 

6.31

%

 

 

6.31

%

Total interest-bearing liabilities

 

 

1.29

%

 

 

0.84

%

 

 

1.31

%

 

 

1.27

%

 

 

1.16

%

 

 

1.07

%

 

 

0.90

%

Net interest rate spread

 

 

2.97

%

 

 

2.98

%

 

 

2.98

%

 

 

2.96

%

 

 

2.95

%

 

 

2.93

%

 

 

2.96

%

Net interest rate margin

 

 

3.26

%

 

 

3.17

%

 

 

3.28

%

 

 

3.24

%

 

 

3.21

%

 

 

3.17

%

 

 

3.16

%

                

 

(1)

Includes investment securities at adjusted amortized cost.

 

(2)

See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

 

 

Page 7

 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands)

 

 

Six Months Ended

 

 

2019

 

 

2018

 

 

 

June 30,

 

 

Second

 

 

First

 

 

Fourth

 

 

Third

 

 

Second

 

 

 

2019

 

 

2018

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

ASSET QUALITY DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

33,914

 

 

$

34,672

 

 

$

33,327

 

 

$

33,914

 

 

$

33,955

 

 

$

33,955

 

 

$

35,594

 

Net loan charge-offs (recoveries):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

 

37

 

 

 

244

 

 

 

10

 

 

 

27

 

 

 

1,135

 

 

 

431

 

 

 

259

 

Commercial mortgage

 

 

(14

)

 

 

(4

)

 

 

3

 

 

 

(17

)

 

 

901

 

 

 

110

 

 

 

(1

)

Residential real estate loans

 

 

101

 

 

 

(103

)

 

 

76

 

 

 

25

 

 

 

23

 

 

 

16

 

 

 

(53

)

Residential real estate lines

 

 

(3

)

 

 

86

 

 

 

(1

)

 

 

(2

)

 

 

15

 

 

 

21

 

 

 

(5

)

Consumer indirect

 

 

2,580

 

 

 

2,981

 

 

 

1,022

 

 

 

1,558

 

 

 

1,599

 

 

 

1,246

 

 

 

1,317

 

Other consumer

 

 

326

 

 

 

502

 

 

 

137

 

 

 

189

 

 

 

252

 

 

 

237

 

 

 

162

 

Total net charge-offs

 

 

3,027

 

 

 

3,706

 

 

 

1,247

 

 

 

1,780

 

 

 

3,925

 

 

 

2,061

 

 

 

1,679

 

Provision for loan losses

 

 

3,547

 

 

 

2,989

 

 

 

2,354

 

 

 

1,193

 

 

 

3,884

 

 

 

2,061

 

 

 

40

 

Ending balance

 

$

34,434

 

 

$

33,955

 

 

$

34,434

 

 

$

33,327

 

 

$

33,914

 

 

$

33,955

 

 

$

33,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

     to average loans (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

 

0.01

%

 

 

0.11

%

 

 

0.01

%

 

 

0.02

%

 

 

0.83

%

 

 

0.33

%

 

 

0.22

%

Commercial mortgage

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

-0.01

%

 

 

0.38

%

 

 

0.05

%

 

 

0.00

%

Residential real estate loans

 

 

0.04

%

 

 

-0.04

%

 

 

0.06

%

 

 

0.02

%

 

 

0.02

%

 

 

0.01

%

 

 

-0.04

%

Residential real estate lines

 

 

-0.01

%

 

 

0.15

%

 

 

-0.01

%

 

 

-0.01

%

 

 

0.05

%

 

 

0.08

%

 

 

-0.02

%

Consumer indirect

 

 

0.58

%

 

 

0.67

%

 

 

0.46

%

 

 

0.69

%

 

 

0.69

%

 

 

0.55

%

 

 

0.59

%

Other consumer

 

 

4.12

%

 

 

6.06

%

 

 

3.51

%

 

 

4.73

%

 

 

6.00

%

 

 

5.66

%

 

 

3.95

%

Total loans

 

 

0.20

%

 

 

0.27

%

 

 

0.16

%

 

 

0.23

%

 

 

0.51

%

 

 

0.28

%

 

 

0.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental information (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

$

638

 

 

$

4,026

 

 

$

638

 

 

$

594

 

 

$

912

 

 

$

2,203

 

 

$

4,026

 

Commercial mortgage

 

 

6,836

 

 

 

2,151

 

 

 

6,836

 

 

 

909

 

 

 

1,586

 

 

 

1,900

 

 

 

2,151

 

Residential real estate loans

 

 

2,283

 

 

 

2,138

 

 

 

2,283

 

 

 

2,225

 

 

 

2,391

 

 

 

2,057

 

 

 

2,138

 

Residential real estate lines

 

 

282

 

 

 

288

 

 

 

282

 

 

 

252

 

 

 

255

 

 

 

297

 

 

 

288

 

Consumer indirect

 

 

1,399

 

 

 

1,124

 

 

 

1,399

 

 

 

1,822

 

 

 

1,989

 

 

 

1,385

 

 

 

1,124

 

Other consumer

 

 

25

 

 

 

4

 

 

 

25

 

 

 

2

 

 

 

8

 

 

 

8

 

 

 

4

 

Total non-performing loans

 

 

11,463

 

 

 

9,731

 

 

 

11,463

 

 

 

5,804

 

 

 

7,141

 

 

 

7,850

 

 

 

9,731

 

Foreclosed assets

 

 

37

 

 

 

299

 

 

 

37

 

 

 

41

 

 

 

230

 

 

 

290

 

 

 

299

 

Total non-performing assets

 

$

11,500

 

 

$

10,030

 

 

$

11,500

 

 

$

5,845

 

 

$

7,371

 

 

$

8,140

 

 

$

10,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing loans

     to total loans

 

 

0.36

%

 

 

0.34

%

 

 

0.36

%

 

 

0.19

%

 

 

0.23

%

 

 

0.26

%

 

 

0.34

%

Total non-performing assets

     to total assets

 

 

0.27

%

 

 

0.24

%

 

 

0.27

%

 

 

0.14

%

 

 

0.17

%

 

 

0.19

%

 

 

0.24

%

Allowance for loan losses

     to total loans

 

 

1.09

%

 

 

1.17

%

 

 

1.09

%

 

 

1.07

%

 

 

1.10

%

 

 

1.14

%

 

 

1.17

%

Allowance for loan losses

     to non-performing loans

 

 

300

%

 

 

349

%

 

 

300

%

 

 

574

%

 

 

475

%

 

 

433

%

 

 

349

%

                

 

(1)

At period end.

 

 

Page 8

 

FINANCIAL INSTITUTIONS, INC.
Appendix A — Reconciliation to Non-GAAP Financial Measures (Unaudited)
(In thousands, except per share amounts)

 

 

 

Six Months Ended

 

 

2019

 

 

2018

 

 

 

June 30,

 

 

Second

 

 

First

 

 

Fourth

 

 

Third

 

 

Second

 

 

 

2019

 

 

2018

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

Ending tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

 

 

$

4,313,945

 

 

$

4,302,541

 

 

$

4,311,698

 

 

$

4,258,385

 

 

$

4,191,315

 

Less: Goodwill and other intangible

     assets, net

 

 

 

 

 

 

 

 

 

 

75,534

 

 

 

75,850

 

 

 

76,173

 

 

 

78,853

 

 

 

79,188

 

Tangible assets

 

 

 

 

 

 

 

 

 

$

4,238,411

 

 

$

4,226,691

 

 

$

4,235,525

 

 

$

4,179,532

 

 

$

4,112,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shareholders’ equity

 

 

 

 

 

 

 

 

 

$

405,026

 

 

$

390,925

 

 

$

378,965

 

 

$

374,825

 

 

$

369,608

 

Less: Goodwill and other intangible

     assets, net

 

 

 

 

 

 

 

 

 

 

75,534

 

 

 

75,850

 

 

 

76,173

 

 

 

78,853

 

 

 

79,188

 

Tangible common equity

 

 

 

 

 

 

 

 

 

$

329,492

 

 

$

315,075

 

 

$

302,792

 

 

$

295,972

 

 

$

290,420

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible

     assets (1)

 

 

 

 

 

 

 

 

 

 

7.77

%

 

 

7.45

%

 

 

7.15

%

 

 

7.08

%

 

 

7.06

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

 

 

 

 

 

 

 

 

15,995

 

 

 

15,941

 

 

 

15,929

 

 

 

15,925

 

 

 

15,924

 

Tangible common book value per

     share (2)

 

 

 

 

 

 

 

 

 

$

20.60

 

 

$

19.77

 

 

$

19.01

 

 

$

18.59

 

 

$

18.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average tangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

4,291,670

 

 

$

4,114,839

 

 

$

4,300,254

 

 

$

4,282,991

 

 

$

4,268,809

 

 

$

4,187,538

 

 

$

4,142,735

 

Less: Average goodwill and other

     intangible assets, net

 

 

75,871

 

 

 

75,271

 

 

 

75,711

 

 

 

76,033

 

 

 

78,314

 

 

 

79,047

 

 

 

75,957

 

Average tangible assets

 

$

4,215,799

 

 

$

4,039,568

 

 

$

4,224,543

 

 

$

4,206,958

 

 

$

4,190,495

 

 

$

4,108,491

 

 

$

4,066,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common equity

 

$

390,896

 

 

$

365,242

 

 

$

398,083

 

 

$

383,630

 

 

$

378,936

 

 

$

374,482

 

 

$

366,942

 

Less: Average goodwill and other

     intangible assets, net

 

 

75,871

 

 

 

75,271

 

 

 

75,711

 

 

 

76,033

 

 

 

78,314

 

 

 

79,047

 

 

 

75,957

 

Average tangible common equity

 

$

315,025

 

 

$

289,971

 

 

$

322,372

 

 

$

307,597

 

 

$

300,622

 

 

$

295,435

 

 

$

290,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to

     common shareholders

 

$

22,191

 

 

$

20,727

 

 

$

11,035

 

 

$

11,156

 

 

$

7,126

 

 

$

10,212

 

 

$

11,804

 

Return on average tangible common

     equity (3)

 

 

14.21

%

 

 

14.41

%

 

 

13.73

%

 

 

14.71

%

 

 

9.40

%

 

 

13.71

%

 

 

16.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

22,922

 

 

$

21,458

 

 

$

11,401

 

 

$

11,521

 

 

$

7,491

 

 

$

10,577

 

 

$

12,170

 

Add: Income tax expense

 

 

5,966

 

 

 

5,247

 

 

 

2,939

 

 

 

3,027

 

 

 

2,199

 

 

 

2,560

 

 

 

2,979

 

Add: Provision for loan losses

 

 

3,547

 

 

 

2,989

 

 

 

2,354

 

 

 

1,193

 

 

 

3,884

 

 

 

2,061

 

 

 

40

 

Pre-tax pre-provision income

 

$

32,435

 

 

$

29,694

 

 

$

16,694

 

 

$

15,741

 

 

$

13,574

 

 

$

15,198

 

 

$

15,189

 

                

 

(1)

Tangible common equity divided by tangible assets.

 

(2)

Tangible common equity divided by common shares outstanding.

 

(3)

Net income available to common shareholders (annualized) divided by average tangible common equity.

 

Page 9