Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Q1 2020 Earnings Presentation
21 slides from Financial Institutions's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Earnings Presentation
FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI) First Quarter 2020 Earnings Presentation April 30, 2020
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: Our COVID-19 Response
Our COVID-19 Response Helping our customers, associates and communities. Today. Tomorrow. Always. Associates Consumers Businesses • 65% of associates working from home • Nearly 90% of our branches remain • SBA Paycheck Protection Program or remotely since March 16 open(1); with two of our urban - Ov
Slide 4: Overview of Financial Institutions, Inc.
Overview of Financial Institutions, Inc. Corporate Overview Key Statistics as of March 31, 2020 ▪ Diversified financial services holding company Assets: $4.5 billion headquartered in Western New York Loans: $3.2 billion ▪ Subsidiaries include: – Five Star Bank (regional community bank) Deposits: $3.
Slide 5: First Quarter Key Statistics
First Quarter Key Statistics(1) ▪ Diluted earnings per share was $0.05 as compared to $0.70 in 2019 ▪ First quarter 2020 results were negatively impacted by significantly higher provision of $13.9 million as compared to $1.2 million in 2019 ‒ Higher provision driven by impact of COVID-19 on the econ
Slide 6: First Quarter 2020
First Quarter 2020 Results Summary Commentary 1Q’19 4Q’19 1Q’20 ▪ Net interest income increased $1.3MM from 1Q’19 Net interest income $31.8 $33.2 $33.1 primarily due to change in interest-earning asset mix Noninterest income 9.1 9.7 10.0 as loans became larger percentage of portfolio; and was relati
Slide 7: Key Earnings Highlights
Key Earnings Highlights Quarterly Earnings Highlights (1Q’19 – 1Q’20) ($ in millions, except per share amounts) Earnings Summary 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 Average interest-earning assets $3,996 $4,008 $3,959 $3,994 $4,054 Net interest margin 3.24% 3.28% 3.29% 3.33% 3.31% Net interest income 31.8
Slide 8: Securities Portfolio
Securities Portfolio ▪ The Company launched an initiative in 2018 to convert a portion of low-yield, low-risk weighted investment securities into higher-yielding loans. This initiative was completed in the third quarter of 2019. ($ in millions) $1,200 CAGR -9.2% $1,083 $1,041 $1,000 $892 $791 $800 $
Slide 9: Total Loans
Total Loans ▪ 2019 and 2020 growth reflects lower consumer indirect production as we maintain focus on growing relationship-based categories (commercial and residential) and scaling back consumer indirect lending, especially outside footprint ($ in millions) CAGR 10.5% $3,500 $3,221 $3,237 $3,087 $3
Slide 10: Commercial Banking
Commercial Banking ▪ Growth was muted in 1Q’20 − Commercial mortgage experienced higher payoffs than 4Q’19, driving relatively flat linked quarter performance ▪ 2019 growth in commercial business loans of 3% and commercial mortgage loans of 16% ▪ Over the course of the past 2+ years, we have made st
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 ▪ $844 Million Portfolio at March 31, 2020 − Portfolio represents 26.1% of total loans, down from 29.8% at 12/31/18 and peak of 35% at 12/31/13 − ‘19 and ‘20 decline reflects lower consumer indirect production as we maintain focus on growing relationship- based categories (
Slide 13: Deposit Growth
Deposit Growth Deposits (by account type) Commentary ($ in millions) $4,000 $3,787 ▪ Opportunities for growth CAGR 7.49% $3,556 − Combined Rochester and Buffalo markets $3,500 $3,367 $3,210 represent attractive deposit market of $65 $1,059 $2,995 billion $3,000 $1,180 $1,020 $852 − Current FSB marke
Slide 14: Key Liquidity Metrics
Key Liquidity Metrics Deposit Mix (1) Available Committed Liquidity ($ in millions) ($ in millions) 947 4,000 3,602 900 847 99 3,436 17 3,500 3,347 794 395 800 37 318 54 127 330 3,000 115 44 700 52 81 976 1,036 2,500 861 600 500 2,000 400 1,500 678 644 640 300 1,000 2,142 2,156 2,171 200 500 100 0 *
Slide 15: 1Q'20 CECL Results
1Q’20 CECL Results Allowance for Loan Losses $ in millions 0.95% 1.24% 1.34% Coverage % ▪ Day 1 CECL adoption reflected steady unemployment at ~4% − 1/1/20 pre-tax allowance for loan loss adjustment of $9.6MM ▪ Day 2 CECL economic outlook included a significant increase in unemployment to ~11% in 2Q
Slide 16: Asset Quality
Asset Quality Non-Performing Assets Net Charge-Offs ($ in millions) ($ in millions) $14.0 $11.0 $13.1 $10.5 $10.1 $10.0 $12.0 $11.5 $9.5 $9.0 $8.5 $9.9 $8.0 $10.0 $9.1 $7.5 $7.0 $6.5 $8.0 $6.0 $5.5 $5.0 1.27% $5.8 $4.6 $6.0 $4.5 $4.0 $3.8 0.27% 0.29% $3.5 $4.0 0.23% $3.0 0.21% 0.58% $2.5 0.48% 0.14%
Slide 17: COVID-19: Moderate Overall Exposure to Commercial Sectors Most Impacted
COVID-19: Moderate Overall Exposure to Commercial Sectors Most Impacted in Current Environment Most Impacted Sectors (1) $ in millions Commercial Loan Balances % of Total Total Loans Construction $67 2.0% Retail $145 4.4% Hotel/Motel/Lodging $95 2.9% Restaurants / Food Services $32 1.0% Entertainmen
Slide 18: Capital Ratios
Capital Ratios Leverage Ratio (1) Common Equity Tier 1 Capital Ratio (1) Minimum 5.00% Minimum 7.00% 9.50% 10.50% 10.31% 8.86% 9.00% 10.06% 10.05% 9.00% 8.78% 9.87% 9.95% 8.55% 10.00% 8.36% 8.50% 9.50% 8.00% 7.50% 9.00% 7.00% 8.50% 6.50% 8.00% 6.00% 5.50% 7.50% 5.00% 7.00% 1Q'19 2Q'19 3Q'19 4Q'19 1Q
Slide 19: Future Expectations
Future Expectations The COVID-19 crisis has impacted the global economy and our thoughts remain with the individuals and communities who have been impacted. Our guiding principles through this crisis have been the safety and health of our associates, serving our customers to the highest standards an
Slide 20: Appendix
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Slide 21: 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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