Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — KBW Community Bank Investor Conference 2013
36 slides from Financial Institutions's conference presentation, Jul 30, 2013
Slide 1: KBW Community Bank Investor Conference July 30-31, 2013
KBW Community Bank Investor Conference July 30-31, 2013 NASDAQ: FISI 1
Slide 2: Management Presentation
Martin K. Birmingham President and Chief Executive Officer Management Presentation 2
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: Investor Highlights
Investor Highlights Focused on Mission to Deliver on Our Promise Strengthened and Deep Management Team to Drive Performance Remain Positioned for Growth Organic Strategy On Track Proven M&A Acumen Low Cost Operating Emphasis Effective Enterprise Risk Management Solid Capital Structure Attractive Div
Slide 5: Our Promise
Our Promise All Strategic Initiatives Focused on Delivering on our Promise Board & Management Accountability Measurement and Monitoring Tools in Place Enhance Customer Experience Employee Experience Shareholder Value 5
Slide 6: Our Approach
Our Approach Building Management Depth Attract and retain talent Promote from within - create career opportunities Operational Efficiency Focus on revenue growth Responsible expense management Opportunistic Acquisitions Sound Risk Management Disciplined lending Organic growth Balance between volume
Slide 7: 2012/2013 Management Transition and Strengthening
2012/2013 Management Transition and Strengthening Peter Humphrey retired on August 28, 2012 35 years of loyal and dedicated service, 18 years President & CEO Management Depth Martin Birmingham Joined the Company in 2005, named President & CEO in March 2013 Rick Harrison Joined the Company in 2003, n
Slide 8: Employee Development
Employee Development Necessary Part of Growth and Expansion Strategy Created the Five Star Bank Experience Core Beliefs "We work as a team in an environment of trust, integrity and mutual respect where successes are recognized" "Every interaction is an opportunity to deliver a friendly, professional
Slide 9: Employee Development: Assessments
Employee Development Regular Employee & Customer Assessments Correlation between Employee Satisfaction and Customer Satisfaction Satisfied Employees = Satisfied Customers Satisfied Customers = Shareholder Value 9
Slide 10: Customer Experience: New Service Offerings
Customer Experience New Service Offerings Mobile Banking 102% increase in Mobile banking users since January 2013 Enhanced Web Presence Online Account Opening Updated Online Banking & Bill Payor Renewed emphasis on e-statements 200% increase in e-statement penetration since January 2013 New Product
Slide 11: Customer Experience: Made for You Philosophy
Customer Experience "Made for You" Philosophy Give the Customer the Power of Choice Robust Products State of the Art Technology Convenient Locations Outstanding Service 11
Slide 12: Indirect Lending as a Core Business
Indirect Lending as a Core Business Large market Favorable competitive conditions and risk- adjusted returns Natural risk dispersion that comes with retail loans Relatively short duration loans Necessary expertise available 12
Slide 13: Strength Through Experienced Key Personnel
Strength Through Experienced Key Personnel Most of the key personnel have auto finance experience that includes American Credit Services, Inc. (ACSI), a wholly owned subsidiary of Rochester Community Savings Bank, which subsequently became Charter One Auto Finance (COAF). COAF originated over $2B/ye
Slide 14: Experience of Key Personnel
Experience of Key Personnel Function Years of Experience Underwriting Manager 25 Credit Administration 35 Sales Manager 25 Collections Manager 30 Underwriting Supervisor 15 Loan Processing Supervisor 20 14 Indirect Lending as a Core Business
Slide 15: Indirect Lending: Prime Loans Through Franchised Dealers
Originating prime loans - average credit score is 721 We originate through approximately 420 franchised automobile dealerships No independent used car dealerships All dealers are within upstate New York and northern Pennsylvania 15 Indirect Lending as a Core Business
Slide 16: Indirect Loan Volume
(CHART) Indirect Loan Volume ($ Millions) 16 Indirect Lending as a Core Business
Slide 17: Indirect Net Charge-Off %
(CHART) Indirect Net Charge-Off % 17 Indirect Lending as a Core Business
Slide 18: Indirect Auto Vintage Analysis
Indirect Auto Vintage Analysis As of 6/30/2013 18 Indirect Lending as a Core Business
Slide 19: Successful Branch Acquisitions
Successful Branch Acquisitions 19
Slide 20: Successful Branch Acquisitions
Successful Branch Acquisitions 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 4 former HSBC Offices on August 17, 2012 $157.2 Million in Deposits Gained Significant Market Share
Slide 21: Successful Branch Acquisitions: Solid Execution
Successful Branch Acquisitions Solid Execution Detailed planning Seamless integration Extended customer service hours Satisfied Customers Deposit Retention Levels Higher than Projected 21
Slide 22: Growth Opportunities
Growth Opportunities $ 29.8 Billion $ 10.9 Billion $ 1.0 Billion * Source - SNL Financial 22
Slide 23: Financial Overview
Financial Overview Kevin B. Klotzbach EVP and Chief Financial Officer/Treasurer 23
Slide 24: Financial Highlights
FINANCIAL Highlights Jun YTD 2013 2012 % Change vs. 2011 BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET Loans $ 1,743,414 $ 1,705,726 14.9% Deposits $ 2,324,236 $ 2,261,794 17.1% INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT INCOME STATEMENT Net Interest Income $ 45,411 $ 88,516 8.1% N
Slide 25: Net Interest Income and Noninterest Income
Net Interest incomE anD noninterest INCOME (CHART) CAGR ('09-'12) 6% * All periods exclude OTTI & Securities Gains 25 7% increase
Slide 26: Noninterest Income
(CHART) noninterest INCOME * All periods exclude OTTI & Securities Gains 26 (CHART)
Slide 27: Strong Net Interest Margin
FINANCIAL overview Strong Net Interest Margin (CHART) 27
Slide 28: Efficiency Ratio
(CHART) Financial overview Efficiency Ratio Expense as a Percent of Revenue * Peer group average is the SNL Bank $1B to $5B Index. 28
Slide 29: (CHART) CAGR ('4Q, 09- 4Q, 12) 10.5% $ Millions
(CHART) CAGR ('4Q, 09- 4Q, 12) 10.5% 29 $ Millions
Slide 30: Credit Quality
$ Millions 2011 2012 Jun YTD '13 2012 Peer Group* Non-Performing Loans Non-Performing Loans Non-Performing Loans Non-Performing Loans Non-Performing Loans Balances $7.1 $9.1 $11.3 Percent 0.48% 0.53% 0.65% 2.41% Net Loan Charge Offs Net Loan Charge Offs Net Loan Charge Offs Net Loan Charge Offs Net
Slide 31: Low Risk Investment Portfolio
financial overview Low Risk Investment Portfolio (CHART) 31
Slide 32: Financial Overview
(CHART) (CHART) Financial OVERVIEW 1,883 1,932 2,262 2,324 32
Slide 33: Capital Management
2011 2012 Jun YTD '13 Leverage Ratio 8.63% 7.71% 7.59% Tier 1 Risk-Based Capital 12.20% 10.73% 10.96% Total Risk-Based Capital 13.45% 11.98% 12.21% Common Dividend Payout Ratio 31.33% 35.63% 40.45% Return on Average Tangible Common Equity 11.55% 11.74% 13.11% FINANCIAL OVERVIEW capital Management *
Slide 34: Total Shareholder Return
Total Shareholder Return (CHART) 34
Slide 35: Investor Merits & Metrics
Investor Merits & Metrics Metric 6/30/2013 Price-to-Earnings (LTM) * 13.36x Price-to-Tangible Book * 1.66x Return on Average Assets (LTM) 0.87% Return on Average Common Equity (LTM) 9.32% Annualized Dividend Rate $0.72 Dividend Yield * 3.37% Strong Management Team Positioned for Growth Organic Strat
Slide 36: Thank you.
Thank you. Martin K. Birmingham President and Chief Executive Officer Kevin B. Klotzbach EVP and Chief Financial Officer/Treasurer NASDAQ: FISI 36
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