Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — IPO Roadshow (December 2024)
25 slides from Financial Institutions's IPO roadshow presentation, Dec 11, 2024
Slide 1: Financial Institutions, Inc. Follow-On Offering Investor Presentation
Investor Presentation Financial Institutions, Inc. (NASDAQ: FISI) Follow-On Offering Investor Presentation December 2024
Slide 2: Important Information & Disclosures
Important Information & Disclosures Notice to and Undertaking by Recipients In this presentation, “we,” “our,” “us,” “Financial Institutions,” “FISI” or the “Company” refers to Financial Institutions, Inc., and our consolidated subsidiaries, including Five Star Bank, unless the context indicates tha
Slide 3: Common Stock Offering Summary
Introduction Common Stock Offering Summary Issuer Financial Institutions, Inc. Exchange / Ticker Nasdaq / FISI Base Offering Size $85 million (100% Primary) Overallotment 15% (100% Primary) Use of Proceeds General corporate purposes which may include a balance sheet restructuring through the reposit
Slide 4: Today's Presenters
Introduction Today’s Presenters Martin K. Birmingham—President, CEO & Director • President and Chief Executive Officer of Financial Institutions, Inc. and Five Star Bank since 2013 • Joined Five Star in 2005 as President and CEO of National Bank of Geneva, which consolidated with three other subsidi
Slide 5: Attractive Value Proposition
Company Overview Attractive Value Proposition $414M Market Cap • Simplifying the franchise with divestiture of insurance business and wind-down of BaaS Optimizing the • Maintaining robust capital ratios while improving profitability2 0.98x Business • Q4 ‘23 realignment has improved efficiency and re
Slide 6: Common Equity Raise for Organic Growth and Potential Securities Portfolio Restructuring
Company Overview Common Equity Raise for Organic Growth and Potential Securities Portfolio Restructuring The next step in creating a more efficient and profitable institution • Potential restructuring of Available-for-Sale (AFS) securities portfolio would improve earnings Approximately $575M in AFS
Slide 7: Overview of Financial Institutions, Inc.
Company Overview Overview of Financial Institutions, Inc. 1817 Founded NASDAQ: FISI (IPO in 1999) • Financial holding company headquartered in Western New York offering banking and wealth management services through its subsidiaries, Five Star Bank and Courier Capital, LLC $6.16B • Experienced manag
Slide 8: Company History
Company Overview Sale of SDN Company History in 2024 Began wind-down of Strong growth profile since 1999 IPO (~7% Asset CAGR) BaaS in 2024 Merged HNP Capital into Acquired Began BaaS Courier Capital Acquired HNP in 2023 Courier Capital, LLC Bolt-on insurance Offerings Capital, LLC asset and employee
Slide 9: Company Focus
Company Overview Company Focus FISI’s vision is to be a high-performing community bank, offering a simple, connected and trusted banking experience in the markets we serve ✓ Scalable and efficient operating model has yielded consistent results over time ✓ Diversified revenue base with additive fee i
Slide 10: Producing Results
Company Overview Producing Results Management is transforming the bank into a more efficient and profitable institution Our Next Move Optimizing Geographic Commercial Wealth Talent Execute capital raise Operations Expansion Growth Management Transformation and evaluate AFS History of leveraging Expa
Slide 11: New York State's CHIPS Initiative
In-Footprint Opportunities New York State’s CHIPS Initiative Attracting semiconductor partnerships to create jobs and in Announced Investment: $100M+ Jobs Expected: 250+ The 2022 CHIPS & Science Act is driving significant federal funding to Upstate Fairport, NY New York and several chips manufacture
Slide 12: Valuable Core Deposit Base
Valuable Core Deposit Base Premium Deposit Franchise Total Deposits $ B $ 5.21 $ 5.31 $ 4.83 $ 4.93 $ 0.82 $ 0.82 $ 4.28 $ 0.77 $ 0.70 ~320 municipal customers as of MRQ-end $ 0.62 $ 1.02 $ 1.18 $ 1.10 $ 1.12 $ 0.83 $ 0.26 $ 0.08 $ 0.25 $ 0.35 $ 0.28 ~82% of total deposits are insured or collaterali
Slide 13: High Quality Lending: Diversified Loan Portfolio
High Quality Lending Overall Commercial Portfolio Mix Real Estate and Rental / Diversified Loan Portfolio Leasing 1% 4% Construction 2% 2% Loans Held For Investment 3% Manufacturing 3% 5% Accommodation and Food Services 6.42% 12% $2.8 Wholesale Trade Yield 2 Consumer & Other 7% 15% 10% Billion Retai
Slide 14: High Quality Lending: Commercial Real Estate
High Quality Lending Commercial Real Estate (CRE) Commercial Real Estate Portfolio 284% Well diversified, with ~700 loan facilities consolidated into ~260 separate CRE / Total lending relationships, with ~$2.6M average loan size 41% Risk-Based Capital 75% of CRE clients have loan relationships <$10M
Slide 15: High Quality Lending: Office and Multifamily CRE
High Quality Lending Office and Multifamily CRE Office Property by Class • Office CRE committed credit exposure of $383M at September 30, 2024 11% 0.4% <$50M of office exposure in central business districts, or CBDs, represents ~12% of office and ~2% of total CRE exposure Average loan size of $3.2M
Slide 16: High Quality Lending: Solid Asset Quality
High Quality Lending Solid Asset Quality Disciplined credit culture supports consistently strong asset quality metrics Allowance For Credit Losses / Loans Net Charge-Offs/ Average Loans 0.40% 1.46% 0.37% 1.12% 1.14% 1.08% 1.01% 0.20% 0.95% 0.16% 0.15% 0.14% 2019Y 2020Y 2021Y 2022Y 2023Y Q3 ‘24 2019Y
Slide 17: Securities Portfolio
Securities Portfolio Securities Portfolio $1,384 $1,331 2.14% $1,262 Securities Portfolio $206 $1,163 $211 $1,143 $1,125 $205 $198 $1,072 $1,036 $1,067 65% $189 $180 $1,008 $1,000 $1,008 Unique opportunity for restructuring in AFS portfolio 1. $160 $148 $144 $154 $128 $121 $1,178 $1,119 Securities A
Slide 18: Considering Securities Portfolio Restructuring to Accelerate Profitability
Securities Portfolio Considering Securities Portfolio Restructuring to Accelerate Profitability Potential Transaction Assumptions1 Management is considering a partial restructuring of its low-yielding AFS securities portfolio Potential Securities Sold: ~$575M The potential restructuring is expected
Slide 19: Potential Restructuring Accelerates Profitability
Securities Restructuring and Common Offering Potential Restructuring Accelerates Profitability1 Return on Average Assets Net Interest Margin Net Interest Income 1.16% 3.26% $46.4 0.89% 2.89% $40.7 Q3 ‘ 24 Illustrative for Securities Q3 ‘ 24 Illustrative for Securities Q3 ‘ 24 Illustrative for Securi
Slide 20: Consolidated Capital Ratios Well Positioned for Future Growth
Securities Restructuring and Common Offering Consolidated Capital Ratios Well Positioned for Future Growth Tangible Common Equity to Tangible Assets 1 Common Equity Tier 1 8.14% 10.28% 10.37% 6.93% 9/30/2024 Illustrative for Securities 9/30/2024 Illustrative for Securities Restructuring + Common Res
Slide 21: Investment Thesis
Investment Thesis Investment Thesis Positioned well for profitable, organic growth Results-driven community bank with strong retail and commercial franchise Wealth management business diversifies revenue and complements core banking franchise Disciplined credit culture with strong credit quality Exp
Slide 22: Thank you for your interest in Financial Institutions, Inc.
Appendix Thank you for your interest in Financial Institutions, Inc. NASDAQ: FISI Investor Relations Contacts Kate Croft Director of Investor and External Relations Jack Plants Chief Financial Officer & Corporate Treasurer FISI-Investors@five-starbank.com Learn more at www.FISI-Investors.com 22
Slide 23: Pro-Forma Adjustments
Appendix Pro-Forma Adjustments Pro Forma Adjustments for Securities Restructuring + Common Offering Diluted Earnings Per Share Available to Common Shareholders Net Income Available to Diluted Earnings Per Amounts in millions, except per share data Common Shareholders Diluted Shares Common Share For
Slide 24: Pro-Forma Adjustments: ROA and Net Interest Margin
Appendix Pro-Forma Adjustments Pro Forma Adjustments for Securities Restructuring + Common Offering Illustrative for Return on Average Assets Securities Restructure $ in millions + Common Offering Net income $17.7 A Average Assets 6,018 Add: Net Offering Proceeds Received 81 Less: Securities Sold ($
Slide 25: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations 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 wit
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