Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Investor Presentation (May 2014)
25 slides from Financial Institutions's investor presentation, May 21, 2014
Slide 1: Delivering On Our Promise
Exhibit 99.1 Delivering On Our NASDAQ: FISI Promise May 21, 2014
Slide 2: Forward Looking Statements
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 Refor
Slide 3: Key Investment Considerations
Key Investment Considerations Positioned to Achieve Long-Term Growth… Experienced leadership Investments in people and infrastructure Sustainable, scalable business model Solid capital structure Low cost and streamlined operating emphasis Effective enterprise risk management Consistent, strong opera
Slide 4: Martin K. Birmingham and Kevin B. Klotzbach
Martin K. Birmingham President & Chief Executive Officer Kevin B. Klotzbach Executive Vice President, Chief Financial Officer & Treasurer
Slide 5: Who We Are
Who We Are Corporate Overview Key Corporate Statistics Regional community bank headquartered in Assets: $3.02 billion Warsaw, NY with $3.0 billion in assets Loans: $1.85 billion 10,000 square-mile operating footprint with 50 banking locations in 15 contiguous counties Deposits: $2.53 billion concent
Slide 6: Management Team
Management Team Years with Years in Name Title FISI Banking Martin K. Birmingham President & CEO 9 24 Richard J. Harrison EVP, Chief Operating Officer 10 44 Jeffrey P. Kenefick EVP, Commercial Banking 8 24 Kevin B. Klotzbach EVP, Chief Financial Officer 12 30 Kenneth V. Winn EVP, Chief Risk Officer
Slide 7: Our Strategy and Approach
Our Strategy and Approach Sound Risk Maintain our Management Smart Growth Culture Focus on Value Balance between volume Continue to capitalize on Attract, retain and cultivate Principled, growth oriented and risk; maintain our banking dislocation in our top talent approach guided by our credit disci
Slide 8: Our Strategic Initiatives have Driven Growth and Performance
Our Strategic Initiatives have Driven Growth and Performance Initiatives Outcomes Optimization and consolidation of Consistent, strong operating results branches offices Meaningful organic loan growth Investment in asset classes which offer excellent risk adjusted returns and Increased positive oper
Slide 9: A Dominant, Established Franchise…
A Dominant, Established Franchise… Deposit Market Share: Counties of Operation Key Highlights Deposits 10,000 square-mile operating Branches in Market Market footprint Rank Institution 2013 ($MM) Share (%) 1 Manufacturers and Traders Trust Co. 116 19,562 32.1% 50 banking offices in 15 contiguous 2 7
Slide 10: …Uniquely Positioned For Future Growth
…Uniquely Positioned For Future Growth Capitalizing on banking dislocation due to larger Market Footprint institutions divesting in our markets Acquired 4 former First Niagara Offices in June 2012 $129.6 million in deposits Entered Orleans County Strengthened presence in Genesee and Seneca Counties
Slide 11: Balance Sheet Growth
Balance Sheet Growth Balance Sheet Growth $3,500 $3,016 $3,000 $2,929 $2,828 $2,764 $2,533 $2,500 $2,409 $2,336 $2,320 $2,214 $2,262 $2,062 $2,000 $1,883 $1,932 $1,834 $1,849 $1,743 $1,706 $1,717 $1,485 $1,500 $1,346 $1,264 $1,000 $500 $0 2009 2010 2011 2012 2013 2013Q1 2014Q1 Loans Deposits Assets
Slide 12: Loan Growth
Loan Growth Loan Portfolio Composition Lending Strategy $2,000 Emphasis on driving quality loan growth by balancing between volume and risk along with $1,800 maintaining a diversified portfolio 6.5% $1,600 Our largest concentration, indirect auto at 35% of total loans, is an excellent asset class as
Slide 13: Indirect Lending as a Core Business
Indirect Lending as a Core Business Market Dynamics Our Team Large and fragmented market Most key personnel have auto finance experience from Charter One Auto Finance (originated over $2 Favorable competitive conditions and risk- Bln /year in 21 states and had a serviced portfolio in adjusted return
Slide 14: Deposit Portfolio
Deposit Portfolio Deposit Composition Deposit Strategy $3,000 Consistent emphasis on growing core (non- time) deposits, which equated to 75% of the $2,500 total deposit portfolio at March 31, 2014 Strong growth in our non-interest bearing deposits, currently at 21% of our deposit $2,000 base or $533
Slide 15: Revenue Growth
Revenue Growth Net Interest Income and Noninterest Income $140.0 $120.0 $23.6 $100.0 $22.2 $20.9 $19.9 $80.0 $20.0 $60.0 $88.5 $91.6 $40.0 $78.8 $81.9 $72.3 $5.7 $6.0 $20.0 $22.9 $23.3 $0.0 2009 2010 2011 2012 2013 2013Q1 2014Q1 Net Interest Income Noninterest Income Note: All periods exclude OTTI &
Slide 16: Operating Leverage by Successful Growth Strategies and Effective Expense Management
Operating Leverage by Successful Growth Strategies and Effective Expense Management Growing Net Interest Income Improving Efficiency Net Interest Income Efficiency Ratio Continues to Grow… 66% $24.0 4.25% 64% $23.0 4.00% 62% $22.0 3.75% 60% $21.0 3.50% …despite margin 58% 57.0% compression headwinds
Slide 17: Asset Quality Overview
Asset Quality Overview Key Highlights Non-performing Assets (“NPAs”) Trends $18.0 Asset quality remains a top priority $0.5 $0.5 $16.0 Disciplined oversight of risk in lending $14.0 portfolio $12.0 $0.9 $10.0 $1.8 $1.3 Asset quality metrics continue to $8.0 $2.1 $16.6 $16.3 outperform peer levels $6
Slide 18: Investment Portfolio
Investment Portfolio Low Risk Security Portfolio Data as of March 31,2014 USG Agencies HTM Municipal & GSE Debt 20.5% Low risk security portfolio 27.4% Other High percentage of the portfolio consists Securities 0.2% of securities backed by the U.S. government (“USG”) and agencies Approximately $930
Slide 19: Capital Management
Capital Management Capital Ratios 15.0% 13.45% 13.0% 12.14% 12.20% 11.0% 10.89% 9.0% 8.63% 7.51% 7.93% 7.0% 6.60% 5.0% 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 Tangible Common Equity / Tangible Assets 7.93% 7.64% 7.20% 7.05% 6.86% 6.74% 6.49% 6.40% 6.51% 6.60% Tier 1 Ris
Slide 20: Planning and Investing For the Future
Planning and Investing For the Future We are constantly investing and adapting our scalable infrastructure to strengthen our competitive position Our infrastructure’s strength is in state of the art technology and motivated human resources Smart investments in technology have enabled us to be compet
Slide 21: How Do We Compare?
How Do We Compare? Price/ MRQ EPS 16.0x 15.8x 16.1x 14.0x 12.0x 11.5x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x FISI Mid-Atl. Peers $1B - SNL Banks $1$5B - $5B Index Price/ TTM EPS Dividend Yield 16.0x 4.0% 16.0x 15.7x 3.35% 3.5% 14.0x 12.0x 12.7x 3.0% 10.0x 2.5% 1.93% 8.0x 2.0% 1.49% 6.0x 1.5% 4.0x 1.0% 2.0x
Slide 22: Total Shareholder Return
Total Shareholder Return 5-Year Total Shareholder Return 90% 82% 80% 71% 68% 70% 60% 50% 40% 30% 25% 22% 23% 20% 10% 0% FISI Mid-Atl. Banks $1-$5B SNL US Banks $1-$5B 5 Year Return 1 Year Return Note: Market data as of April 30, 2014. Peer data reflects median values for the component companies with
Slide 23: Diversified Shareholder Base
Diversified Shareholder Base Shareholder Composition Top 20 Institutional Investors Market Value Shares # Holder Position ($000) Out (%) 1 Wellington Management Co. LLP 1,016,643 23,403 7.34 2 BlackRock Fund Advisors 827,548 19,050 5.97 30% 3 Dimensional Fund Advisors LP 613,864 14,131 4.43 4 Canand
Slide 24: Key Investment Considerations
Key Investment Considerations Positioned to Achieve Long-Term Growth… Experienced leadership Investments in people and infrastructure Sustainable, scalable business model Solid capital structure Low cost and streamlined operating emphasis Effective enterprise risk management Consistent, strong opera
Slide 25: Delivering On Our Promise
Delivering On Our NASDAQ: FISI Promise May 21, 2014
Financial Institutions — Investor Presentation (May 2014) on 6ix