Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Keefe, Bruyette & Woods 12th Annual 2011 Community Bank Investor Conference
27 slides from Financial Institutions's conference presentation, Aug 2, 2011
Slide 1: Competitive Advantage: Skillful Navigation
COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION Keefe, Bruyette & Woods12th Annual 2011 Community Bank Investor Conference
Slide 2: Peter G. Humphrey, President & Chief Executive Officer
Peter G. Humphrey President & Chief Executive Officer COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION
Slide 3: Forward-looking statements
Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, Inc. and its subsidiaries constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forwar
Slide 4: Investment Highlights
Investment Highlights NASDAQ FISIMarket capitalization $239.8 mil. Shares outstanding 13.8 mil.Recent price* $ 17.3752-week range $ 14.14 - $ 20.74Quarterly dividend rate $ 0.12Dividend yield 2.76% * Price as of market close on July 25, 2011 COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION 4
Slide 5: Investment Highlights
Investment Highlights Deep, broad and experienced management teamEffective risk managementLow risk balance sheetAttractive footprint in upstate New YorkExtensive retail delivery network - 50 branches in 14 contiguous countiesTargeting larger, more affluent markets of suburban Buffalo and Rochester f
Slide 6: Investment Highlights: Management Team
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Investment Highlights Management Team Name Title Age Years at FISI Peter G. Humphrey President & CEO 57 34 Karl F. Krebs EVP, CFO 55 2 Martin K. Birmingham EVP, Commercial Banking 44 6 George D. Hagi EVP, Chief Risk Officer 58 5 Richard J. Harrison EVP, Sr.
Slide 7: Effective Risk Management
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Liquidity RiskCredit RiskInterest Rate RiskCompliance RiskRegulatory RiskOperating RiskLegal RiskReputational Risk COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION Investment Highlights Effective Risk Management 7
Slide 8: Low Risk Balance Sheet
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Diversified Loan Portfolio with Pristine QualityDisciplined Credit Culture - No Subprime LendingConservative Investment PortfolioLow Loan / Deposit Ratio and Stable Core Deposit Base Investment Highlights Low Risk Balance Sheet COMPETITIVE ADVANTAGE : SKILLF
Slide 9: Extensive Retail Delivery Network
Extensive Retail Delivery Network 14 Contiguous Counties 50 Branches Over 70 ATMs Investment Highlights COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION 9
Slide 10: Target Market Potential
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION Source: SNL FinancialData as of 6/30/2010 Target Market Potential $ 10.3 Billion $ 33 Billion $ 1.1 Billion 10
Slide 11: Target Market Potential
Increased disposable income plays well for core deposit performance as well as loan activity. COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Investment Highlights Target Market Potential Source: SNL FinancialData as of 6/30/2010 11
Slide 12: Stable Regional Economy
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION (CHART) Unemployment Rate (CHART) Consumer Confidence Investment Highlights Stable Regional Economy 12
Slide 13: Disciplined Approach to Capital Planning
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Provide sufficient capacity to continue to grow organicallyBe prepared for possible strategic opportunitiesPosition the Company to handle changing regulatory landscapeMaintain the confidence of regulators, employees, customers and investorsAllow for the paym
Slide 14: Attractive Capital Structure
2009 2010 Q2 - 2011 Q1-2011 Peer Average* Tier I Risk-based Capital Ratio% 11.95 12.34 13.71 12.45 Total Risk Based Capital Ratio % 13.21 13.60 14.96 14.18 Leverage Ratio % 7.96 8.31 9.30 8.69 Tangible Common Equity Ratio % 5.19 5.65 7.97 6.97 Common BookValue Per Share $ 13.39 14.48 15.66 14.08 Tan
Slide 15: Financial Overview
Karl F. Krebs Executive Vice President & Chief Financial Officer COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION Financial Overview
Slide 16: Financial Highlights
2008 2009 2010 Q1 - 2011 Q2 - 2011 EPS - Diluted $ (2.54) $0.99 $1.61 $0.33 $0.39 Net Income (Loss) $ (26,158) $14,441 $21,287 $5,820 $5,719 COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION FINANCIAL Highlights 16
Slide 17: Financial Highlights: Key Statistics
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION FINANCIAL Highlights YTD 2011 %Changevs. YTD 2010 BALANCE SHEET BALANCE SHEET BALANCE SHEET Loans $ 1,368,000 6% Deposits $ 1,872,000 3% INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT Net Interest Income $ 40,091 3% Non-Interest Income $ 10,122 12% Incom
Slide 18: Strong Net Interest Margin
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION FINANCIAL HighlightsStrong Net Interest Margin (CHART) COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION 18
Slide 19: Net Interest Income vs. Noninterest Income
COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION (CHART) CAGR (2007 to 2010) 8% * All years exclude Securities Gains & OTTI COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION FINANCIAL HighlightsNet Interest Income vs. Noninterest Income 19
Slide 20: Expense Management - Efficiency Ratio
(CHART) Financial HighlightsExpense Management-Efficiency Ratio Expense as a Percent of Revenue * Peer group as defined in the FISI Proxy statement. COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION 20
Slide 21: Loan Growth
(CHART) CAGR (Q4-07 to Q4-10) 12% $ 964 $1,121 $1,264 $1,346 $1,368 COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION 21
Slide 22: Disciplined Lending
(CHART) (CHART) COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION $ millions ------------ As of December 31 ------------- LoanOutstandings Non-PerformingLoan Ratio 2.04% Q1-2011 Peer Average* * Peer group as defined in the FISI Proxy statement. COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION FINANCIAL Highlight
Slide 23: Loan Quality
$ Millions 2009 2010 YTD 2011 Q1-2011 Peer Average* Non-Performing Loans Non-Performing Loans Non-Performing Loans Non-Performing Loans Non-Performing Loans Balances $8.7 $7.6 $7.0 % of Total Loans .69% .56% .51% 2.04% Net Loan Charge-Offs Net Loan Charge-Offs Net Loan Charge-Offs Net Loan Charge-Of
Slide 24: Low Risk Security Portfolio
(CHART) financial HighlightsLow Risk Security Portfolio COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION Data as of 6/30/2011 24
Slide 25: (CHART) (CHART)
(CHART) (CHART) COMPETITIVE ADVANTAGE : SKILLFUL NAVIGATION 25
Slide 26: Attractive Valuation
FISIYTD 2011 Price / LTM EPS 11.35x Price / 2011 Est. Mean EPS* 11.13x Price / Tangible Book 1.34x ROA 1.04% ROE 10.43% COMPETIVE ADVANTAGE : SKILLFUL NAVIGATION Investment HighlightsAttractive valuation Price as of market close on July 25, 2011.* Estimated mean EPS per SNL Financial. COMPETITIVE AD
Slide 27: Investment Highlights
Investment Highlights Deep, broad and experienced management teamEffective risk managementLow risk balance sheetAttractive footprint in upstate New YorkExtensive retail delivery network - 50 branches in 14 contiguous countiesTargeting larger, more affluent markets of suburban Buffalo and Rochester f