Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Q2 2021 Earnings Presentation
20 slides from Financial Institutions's earnings presentation, Jul 29, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI) Second Quarter 2021 Earnings Presentation July 29, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 Liti
Slide 3: Overview of Financial Institutions, Inc.
Overview of Financial Institutions, Inc. Corporate Overview Key Statistics as of June 30, 2021 ▪ Diversified financial services holding company Assets: $5.3 billion headquartered in Western New York Loans: $3.6 billion ▪ Subsidiaries include: – Five Star Bank (regional community bank) Deposits: $4.7
Slide 4: Second Quarter Key Statistics
Second Quarter Key Statistics(1) ▪ Net income of $20.2 million was $9.1 million higher than 2020 ▪ Diluted earnings per share of $1.25 was $0.58 higher than 2020 – Net income and earnings per share were positively impacted by Q2 2021 benefit for credit losses of $4.6 million as compared to provision
Slide 5: Second Quarter 2021
Second Quarter 2021 Results Summary Commentary ($ in millions, except per share amounts) 2Q’20 1Q’21 2Q’21 ▪ Net interest income increased $3.6MM from 2Q’20 as a Net interest income $34.2 $37.9 $37.7 result of growth in all categories of interest-earning assets and the positive impact of PPP loan fo
Slide 6: Key Earnings Highlights
Key Earnings Highlights Quarterly Earnings Highlights (2Q’20 – 2Q’21) ($ in millions, except per share amounts) Earnings Summary 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 Average interest-earning assets $4,274 $4,414 $4,635 $4,670 $4,973 Net interest margin 3.23% 3.22% 3.13% 3.29% 3.06% Net interest income 34.2
Slide 7: Securities Portfolio
Securities Portfolio ▪ Initiative launched in 2018 to convert low-yield, low-risk weighted investment securities into higher-yielding loans. Initiative completed in 3Q’19. ▪ Beginning in 4Q’20, excess Federal Reserve cash balances reallocated to eligible agency mortgage backed securities. ($ in mill
Slide 8: Total Loans
Total Loans ▪ 2020 Commercial Loan growth includes $248.0 million of PPP loans (net of deferred fees) ▪ PPP loans (net of deferred fees) at 6/30/2021 was $171.9 million ($ in millions) CAGR 8.4% $4,000 $3,595 $3,632 $3,500 $3,221 $3,087 $840 $899 $3,000 $2,735 $850 $920 $2,500 $690 $671 $876 $2,000
Slide 9: Commercial Banking
Commercial Banking ▪ PPP loans (net of deferred fees) included in commercial business loans below: $261.5 million at 6/30/20, $264.1 million at 9/30/20, $248.0 at 12/31/20, $255.6 million 3/31/21 and $171.9 million at 6/30/21 ▪ Excluding PPP loans, loan growth subsequent to 1Q’20 (especially commerc
Slide 10: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Commercial Real Estate Ttl Exposure(1) ($1.3Bn(2)) Commercial & Industrial Ttl Exposure(1) ($1.0Bn(2)) As of June 30, 2021 As of June 30, 2021 Accomodation All Other Industries and Food 1.82% Services Construction 7.54% 7.70% All Other Industries Manufacturing 21.04%
Slide 11: Residential Real Estate Loans and Lines
Residential Real Estate Loans and Lines ▪ In-market originations through mortgage loan originators and Five Star Bank branch network ▪ Full product menu featuring competitive portfolio and saleable products including government loan programs ▪ Continuing the build-out of residential mortgage product
Slide 12: Consumer Indirect Lending
Consumer Indirect Lending ▪ $899.0 million portfolio at June 30, 2021 − Portfolio represents 24.8% of total loans, down from 29.8% at 12/31/18 and peak of 35% at 12/31/13 ▪ Prime lending operation with average portfolio FICO score of approximately 718 with only 5.6% under 630 ▪ Dealer network of nea
Slide 13: Consumer & Residential Loan Portfolio Detail
Consumer & Residential Loan Portfolio Detail Consumer Lending Portfolio Consumer Lending Portfolio Metrics As of June 30, 2021 As of June 30, 2021 1,000 % of Ttl. Loan Wt. Avg FICO Millions 899 Portfolio Score Avg. Loan ($3.6Bn) # of Loans (at origination) Balance 800 Consumer Indirect 24.8% 46,468
Slide 14: Deposit Growth
Deposit Growth Deposits (by account type) Commentary ($ in millions) CAGR 11.2% $4,659 ▪ 2021 increase driven by growth in non-public, public $4,500 $4,278 and reciprocal deposits $941 ▪ 2020 increase driven by growth in non-public $4,000 $885 demand and reciprocal deposits $3,556 $3,500 $3,367 ▪ Op
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics Deposit Mix (1) Available Committed Liquidity ($ in millions) ($ in millions) 5,000 1,300 1,238 1,238 4,487 4,448 4,500 1,200 152 1,100 289 3,827 709 762 4,000 1,000 202 417 887 3,500 900 60 268 1,133 977 800 3,000 899 143 700 308 2,500 70 122 600 2,000 500 400 1,500 2,510 2,64
Slide 16: Capital Ratios
Capital Ratios Leverage Ratio (1) Common Equity Tier 1 Capital Ratio (1) Minimum 5.00% Minimum 7.00% 10.00% 11.50% 9.50% 11.00% 9.00% 10.50% 10.38% 10.23% 10.15% 10.14% 10.22% 8.49% 8.42% 8.50% 8.25% 8.35% 8.16% 10.00% 8.00% 9.50% 7.50% 9.00% 7.00% 8.50% 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 2Q'20 3Q'20 4Q'
Slide 17: Asset Quality
Asset Quality Non-Performing Assets Net Charge-Offs ($ in millions) ($ in millions) $4.0 $13.9 $13.9 $14.0 $12.7 $12.5 $3.0 $12.0 $2.4 $10.0 $2.0 $8.0 $7.3 $1.0 $0.9 $6.0 $0.8 0.30% $0.5 0.28% 0.25% 0.27% 0.24% $4.0 0.09% 0.06% 0.10% (0.04%) – 0.14% 2Q'20 3Q'20 4Q'20 1Q'21 2Q'21 $2.0 ($0.4) – ($1.0)
Slide 18: Criticized and Classified Assets
Criticized and Classified Assets ▪ In an effort to address the impact of COVID-19 on our most at-risk exposures, ~$127 million of commercial loans were downgraded to criticized status in 4Q’20 and a specific reserve of $4.7 million was established. – In 1Q’21, the reserve was increased by $2.4 milli
Slide 19: Appendix
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Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures. The Company believes that providing certain non-GAAP financial measures provides investors with informat
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