Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Sandler O'Neill East Coast Financial Services Conference 2013
26 slides from Financial Institutions's conference presentation, Nov 14, 2013
Slide 1: Delivering On Our Promise
Delivering On Our Promise NASDAQ: FISI Sandler O'Neill East Coast Financial Services Conference November 2013
Slide 2: Forward Looking Statements
Forward Looking Statements 2 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 Ref
Slide 3: Key Investment Considerations
Key Investment Considerations 3 Experienced leadership Positioned to Achieve Long^Term Growth... Attractive footprint in Upstate NY, uniquely positioned to seize market opportunities ...and Delivering on our Promise to All Stakeholders Low cost and streamlined operating emphasis Sustainable, scalabl
Slide 4: Martin K. Birmingham, President & CEO; Kevin B. Klotzbach, EVP, CFO & Treasurer
Martin K. Birmingham President & CEO Kevin B. Klotzbach EVP, CFO & Treasurer
Slide 5: Who We Are
Who We Are 5 Regional community bank headquartered in Warsaw, NY with $2.8 billion in assets 10,000 square-mile operating footprint with 50 banking locations in 15 contiguous counties concentrated in Upstate NY Top 20 bank of those headquartered in NY based on asset size Experienced management team
Slide 6: Management Team
Management Team 6 Average Years: 14 27 Name Title Years with FISI Years in Banking Martin K. Birmingham President & CEO 8 24 Richard J. Harrison EVP, Chief Operating Officer 10 44 Jeffrey P. Kenefick EVP, Commercial Banking 7 24 Kevin B. Klotzbach EVP, Chief Financial Officer 12 30 R. Mitchell McLau
Slide 7: Our Strategy and Approach
Sound Risk Management Our Strategy and Approach 7 Balance between volume and risk; maintain our credit discipline Diversified loan portfolio through retail and commercial exposures Effective risk management committee structures Uphold rigorous expense management practices Productivity measures per F
Slide 8: Our Strategic Initiatives have Driven Growth and Performance
Our Strategic Initiatives have Driven Growth and Performance 8 Initiatives Outcomes Optimization and consolidation of branches offices Investment in asset classes which offer excellent risk adjusted returns and duration Continuous reinvestment in people, processes and infrastructure Positioning ours
Slide 9: A Dominant, Established Franchise
A Dominant, Established Franchise... 9 Deposit Market Share: Counties of Operation 10,000 square-mile operating footprint 50 banking offices in 15 contiguous counties concentrated in Upstate NY Top 3 market share in 11 counties Top 5 bank in counties of operation Significant opportunities exist to g
Slide 10: Uniquely Positioned For Future Growth
...Uniquely Positioned For Future Growth 10 Capitalizing on banking dislocation due to larger institutions divesting in our markets Acquired 4 former First Niagara Offices on June 22, 2012 $129.6 million in deposits Entered Orleans County Strengthened presence in Genesee and Seneca Counties Acquired
Slide 11: Balance Sheet Growth
(CHART) Total Assets LTM Growth 8.1% Total Loans LTM Growth 7.3% Total Deposits LTM Growth 3.6% Balance Sheet Growth Balance Sheet Growth 11 Total Assets CAGR ('07-'12) 8.3% Total Deposits CAGR ('07-'12) 7.5% Total Loans CAGR ('07-'12) 12.1%
Slide 12: Loan Growth
Loan Growth 12 Loan Portfolio Composition Lending Strategy Emphasis on driving quality loan growth by balancing between volume and risk along with maintaining a diversified portfolio Our largest concentration, indirect auto at 35% of total loans, is an excellent asset class as it offers low duration
Slide 13: Indirect Lending as a Core Business
Large and fragmented market Favorable competitive conditions and risk- adjusted returns Natural risk dispersion that comes with retail loans Relatively short duration loans Necessary expertise available Underwriting Manager 25 years of experience Credit Administration 35 years of experience Sales Ma
Slide 14: Deposit Portfolio
Deposit Portfolio Deposit Strategy Cost of Total Deposits Deposit Composition 22% 18% 53% 43% 16% 29% 9% 10% 14 Consistent emphasis on growing core (non- time) deposits, which equated to 75% of the total deposit portfolio at 9/30/13 Strong growth in our non-interest bearing deposits, currently at 22
Slide 15: Revenue Growth
(CHART) Revenue Growth 15 Net Interest Income and Noninterest Income CAGR ('09-'12) 6.2% 5.2% Increase Note: All periods exclude OTTI & Securities Gains
Slide 16: Operating Leverage by Successful Growth Strategies and Effective Expense Management
(CHART) (CHART) Operating Leverage by Successful Growth Strategies and Effective Expense Management 16 Growing Net Interest Income Increasing Fee Income Improving Efficiency 9/30/13 YTD $17.9 Million 9/30/09 YTD $14.8 Million Noninterest Income Revenue and Expenses Revenue grew by 25% since 2009 whi
Slide 17: Asset Quality Overview
Asset Quality Overview 17 Nonperforming Assets Trends Asset quality remains a top priority Disciplined oversight of risk in lending portfolio Asset quality metrics continue to outperform peer levels Key Highlights Source: SNL Financial Note: Peers include all US Banks and Thrifts in the Mid-Atlantic
Slide 18: Investment Portfolio
Investment Portfolio 18 Low risk security portfolio High percentage of the portfolio consists of securities backed by the U.S. government and agencies Approximately $800 million in total securities While 30% of total assets, approximately $600 million is needed for various pledging reasons (municipa
Slide 19: Capital Management
Capital Management 19 Capital Ratios (CHART)
Slide 20: Planning and Investing For the Future
Planning and Investing For the Future 20 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 com
Slide 21: How Do We Compare?
(CHART) (CHART) (CHART) How Do We Compare? Price/ MRQ EPS Price/ TBV 21 Dividend Yield Price/ TTM EPS Note: Market data as of 9/30/2013. Peer data as of 6/30/13 and reflects median values for the component companies within each respective index. (CHART) 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.
Slide 22: Delivering Consistent Operating Results
22 FISI and Peer Volatility (Standard Deviation 1Q10 - 1Q13) FISI = 75% Percentile of Peer Group ROAA Volatility (1Q'10 - 2Q'13) Delivering Consistent Operating Results Note: Data reflects median values for each component company within index (CHART)
Slide 23: Total Shareholder Return
Total Shareholder Return 23 5-Year Total Shareholder Return Note: Market data as of 8/21/2013. Peer data reflects median values for the component companies within each respective index (CHART)
Slide 24: Shareholder Composition
24 Shareholder Composition Top 15 Institutional Investors Source: SNL Financial. Market data as of 10/31/2013 Diversified Shareholder Base (CHART)
Slide 25: Key Investment Considerations
Key Investment Considerations 25 Experienced leadership Positioned to Achieve Long^Term Growth... Attractive footprint in Upstate NY, uniquely positioned to seize market opportunities ...and Delivering on our Promise to All Stakeholders Low cost and streamlined operating emphasis Sustainable, scalab
Slide 26: Delivering On Our Promise
Delivering On Our Promise NASDAQ: FISI Sandler O'Neill East Coast Financial Services Conference November 2013
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