Financial Institutions, Inc. · NASDAQ:FISI
Financial Institutions — Q4 2020 Earnings Presentation
21 slides from Financial Institutions's earnings presentation, Jan 28, 2021
Slide 1: Fourth Quarter and Year-End 2020 Earnings Presentation
FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI) Fourth Quarter and Year-End 2020 Earnings Presentation January 28, 2021
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: Overview of Financial Institutions, Inc.
Overview of Financial Institutions, Inc. Corporate Overview Key Statistics as of December 31, 2020 ▪ Diversified financial services holding company Assets: $4.9 billion headquartered in Western New York Loans: $3.6 billion ▪ Subsidiaries include: – Five Star Bank (regional community bank) Deposits:
Slide 4: Fourth Quarter Key Statistics
Fourth Quarter Key Statistics(1) ▪ Net income, earnings per share and pre-tax pre-provision income were the highest in Company history ➢ Net income of $13.8 million was $693 thousand, or 5.3% higher than 2019 ➢ Diluted earnings per share of $0.84 was $0.05, or 6.3% higher than 2019 ➢ Pre-tax pre-pro
Slide 5: Fourth Quarter 2020
Fourth Quarter 2020 Results Summary Commentary 4Q’19 3Q’20 4Q’20 ▪ Net interest income increased $3.0MM from 4Q’19 and $682K from 3Q’20 as a result of increases in loans and Net interest income $33.2 $35.5 $36.2 investment securities combined with heightened Noninterest income 9.7 12.2 11.3 Federal
Slide 6: Key Earnings Highlights
Key Earnings Highlights Quarterly Earnings Highlights (4Q’19 – 4Q’20) ($ in millions, except per share amounts) Earnings Summary 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 Average interest-earning assets $3,994 $4,054 $4,274 $4,414 $4,635 Net interest margin 3.33% 3.31% 3.23% 3.22% 3.13% Net interest income 33.2
Slide 7: Securities Portfolio
Securities Portfolio ▪ Initiative launched in 2018 to convert low-yield, low-risk weighted investment securities into higher-yielding loans. Initiative completed in 3Q’19. ▪ In 4Q’20, excess Federal Reserve cash balances were reallocated to eligible agency mortgage backed securities. ($ in millions)
Slide 8: 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 ▪ 2020 Commercial Loan growth includes $248.0 million of
Slide 9: Commercial Banking
Commercial Banking ▪ Growth in 3Q’20 and 4Q’20 reflect soft loan origination environment ▪ Growth in 2Q’20 commercial business reflects origination of $268.5 million of PPP loans ▪ Commercial lines of credit increased from late March into April and paid down in May and June, resulting in $27 million
Slide 10: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Commercial Real Estate Ttl Exposure1 ($1.2Bn2) Commercial & Industrial Ttl Exposure1 ($1.0Bn2) As of December 31, 2020 As of December 31, 2020 Construction All Other Industries 1.79% Accomodation7.82% and Food Services 8.25% All Other Industries Manufacturing 20.96%
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 ▪ $840.4 million Portfolio at December 31, 2020 − Portfolio represents 23.4% 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 categor
Slide 13: Consumer & Residential Loan Portfolio Detail
Consumer & Residential Loan Portfolio Detail Consumer Lending Portfolio Consumer Lending Portfolio Metrics As of December 31, 2020 As of December 31, 2020 1,000 % of Ttl. Loan Wt. Avg FICO Millions Portfolio Score Avg. Loan 840 ($3.6Bn) # of Loans (at origination) Balance 800 Consumer Indirect 23.4%
Slide 14: Deposit Growth
Deposit Growth Deposits (by account type) Commentary ($ in millions) $4,500 $4,278 CAGR 9.3% ▪ 2020 increase driven by growth in non-public $4,000 demand and reciprocal deposit portfolios $885 $3,556 ▪ Opportunities for growth $3,500 $3,367 $3,210 − Combined Rochester and Buffalo markets $2,995 repr
Slide 15: Key Liquidity Metrics
Key Liquidity Metrics Deposit Mix (1) Available Committed Liquidity ($ in millions) ($ in millions) 4,500 1,100 1,051 4,070 1,033 3,999 1,000 33 4,000 213 581 612 900 3,347 224 3,500 793 800 330 54 3,000 989 835 43 219 700 52 226 2,500 861 600 80 500 2,000 400 1,500 300 644 2,500 2,552 539 550 1,000
Slide 16: Capital Ratios
Capital Ratios Leverage Ratio (1) Common Equity Tier 1 Capital Ratio (1) Minimum 5.00% Minimum 7.00% 10.00% 11.50% 9.50% 11.00% 9.00% 9.00% 8.78% 10.50% 10.31% 10.27% 10.19% 10.18% 8.49% 8.42% 10.05% 8.50% 8.25% 10.00% 8.00% 9.50% 7.50% 9.00% 7.00% 8.50% 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 4Q'19 1Q'20 2Q'
Slide 17: Asset Quality
Asset Quality Non-Performing Assets Net Charge-Offs ($ in millions) ($ in millions) $13.9 $11.0 $13.9 $14.0 $10.1 $13.1 $10.0 $12.5 $12.0 $9.0 $8.0 $10.0 $9.1 $7.0 $8.0 $6.0 $5.0 1.27% $6.0 $3.8 $4.0 0.29% 0.30% 0.28% $4.0 0.25% $3.0 0.21% $2.4 $2.0 0.48% $2.0 $0.8 0.27% $1.0 $0.5 0.09% 0.06% – – 4Q
Slide 18: Exposure to Industries Most Impacted by COVID-19
Exposure to Industries Most Impacted by COVID-19 ▪ Portfolio segment limits are maintained for C&I and CRE which encompasses the industries described ▪ To date, C&I and CRE exposures remain within policy limits ▪ Tier I represents most impacted industries (retail, hotels/lodging, restaurants, etc.)
Slide 19: Criticized and Classified Assets
Criticized and Classified Assets ▪ In an effort to address the impact of COVID-19 on our most at-risk exposures, ~$127 Million of commercial loans were downgraded to criticized status in 4Q’20 ▪ ~$82 Million of the downgrades were loans on extended deferral, which represents a significant portion of
Slide 20: Appendix
x Appendix }€ Financial Institutions, Inc. 20
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
Financial Institutions — Q4 2020 Earnings Presentation on 6ix