WARSAW, N.Y., Sept. 4 /PRNewswire-FirstCall/ -- Financial Institutions,
Inc. (Nasdaq: FISI) (FII) announced that its Board of Directors declared a
quarterly cash dividend of $0.16 per common share, payable on October 1, 2003
to shareholders of record on September 17, 2003. In addition, the Board
declared a quarterly dividend of $2.12 per share on Series B-1, 8.48%
Preferred Stock and $0.75 per share on Series A, 3% Preferred Stock, payable
on October 1, 2003 to shareholders of record on September 17, 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030114/FISILOGO )
The Company also disclosed that the Boards of Directors of its two
national bank subsidiaries, National Bank of Geneva ("NBG") and Bath National
Bank ("BNB"), have entered into agreements with the Office of the Comptroller
of the Currency ("OCC").
"FII, together with its bank subsidiaries, is fully committed to complying
with the rules and regulations that govern the operation of our banks," said
Peter G. Humphrey, Chairman, President and CEO of FII. "We have been actively
involved throughout the past eight months working with the managements of NBG
and BNB and the OCC to identify and resolve the problems noted in the recently
issued reports of examination (covering an examination period as of September
30, 2002), and have provided and will continue to provide significant
financial, managerial and operational support as our banks work through these
issues."
Under the terms of the agreements, NBG and BNB, without admitting any
violations, will take actions designed to assure that their operations are in
accordance with applicable laws and regulations. The agreements require them,
among other things, to: appoint a Compliance Committee of the Board; develop,
implement and ensure compliance with a written plan outlining actions to be
taken to address regulatory recommendations set forth in the reports of
examination, review and assess the capabilities of management; develop various
policies and programs to reduce credit risk and identify problem loans and to
adopt policies that will permit them to declare dividends only when they are
in compliance with their approved capital plans and applicable laws, and upon
prior written notice to (but not with the consent of) the OCC.
Both banks are required to develop capital plans that will enable them to
achieve, by March 31, 2004, Tier 1 leverage capital equal to 8% of
risk-weighted assets, Tier 1 risk-based capital equal to 10% of risk-weighted
assets, and total risk-based capital of 12% of risk-weighted assets. Interim
levels, to be achieved by December 31, 2003, were also established, at 6.25%,
9.0% and 11.0%, respectively, for Bath, and 7.0%, 9.0% and 10.5%,
respectively, for NBG.
Mr. Humphrey stated, "The December 31, 2003 capital levels at NBG and BNB
are achievable, utilizing a combination of de-leveraging, retained earnings
and some capital contributions by the holding company. FII will need to raise
additional funds to meet the March 31, 2004 capital requirements at NBG and
BNB, and is in the process of exploring alternatives with its investment
bankers. We believe that a number of options will be available within the
required time frame, and we are confident that we will be able to raise
sufficient funds during this period."
In addition, the NBG agreement requires its Board of Directors to adopt,
implement and ensure adherence to a written policy on extensions of overdraft
credit and limit the circumstances under which NBG will be permitted to extend
credit to its affiliates, and requires the bank to engage an independent
appraiser to provide updated real estate appraisals where required. The BNB
agreement requires its board of directors to adopt, implement and ensure
adherence to a written action plan outlining proposed corrective action
addressing issues in the pre-existing Matters Requiring Attention pertaining
to interest rate risk measurement and monitoring systems.
Mr. Humphrey continued, "Randy Brown, the new President and CEO of NBG,
has hit the ground running and has already addressed most of the major
requirements of the agreement that his Board has entered into. Randy has the
full support of an energized, committed bank Board, and has the FII Board and
management fully behind him as well."
Mr. Humphrey stated, "Doug McCabe, BNB's President and CEO, and his Board
are fully committed to achieving compliance with the agreement, and have
already addressed most of its major requirements. The bank has recently added
an experienced Senior Loan Officer and a Chief Financial Officer to its ranks,
providing greater depth on the management team."
"Since FII first became aware in January of the existence of significant
numbers of improperly graded loans at NBG, we have taken a number of proactive
steps that have been communicated to the OCC, our other regulators, our
shareholders and the public. The banks have already addressed most of the
action items set forth in the written agreements. Randy Brown and Doug
McCabe, and their Boards, have accomplished a great deal in a very short time
period, and they are fully committed to ensuring compliance going forward,"
said Mr. Humphrey.
In a letter to the Federal Reserve Bank of New York, FII's primary
regulator, FII today terminated its financial holding company status and will
operate instead as a bank holding company. The change in status will not
affect any non-financial subsidiaries or activities currently being conducted
by FII, although it will mean that future acquisitions or expansions of
non-financial activities may require prior Federal Reserve Board approval and
will be limited to those that are permissible for bank holding companies.
This release contains forward-looking statements as described by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements pertain to future events, such as the ability of the holding
company to complete the raising of additional funds. Actual events could
differ materially, and FII undertakes no obligation to revise these
forward-looking statements to reflect events or circumstances subsequent to
the date of this release.
FII is the bank holding company parent of Wyoming County Bank, National
Bank of Geneva, Bath National Bank, and First Tier Bank & Trust. The four
banks provide a wide range of consumer and commercial banking services to
individuals, municipalities, and businesses through a network of 47 offices
and 67 ATMs in Western and Central New York State. FII's Financial Services
Group also provides diversified financial services to its customers and
clients, including brokerage, trust, insurance and employee benefits and
compensation consulting. More information on FII and its subsidiaries is
available through the Company web site at www.fiiwarsaw.com.
SOURCE Financial Institutions, Inc.
-0- 09/04/2003
/CONTACT: Ronald A. Miller, Senior Vice President, Chief Financial
Officer of Financial Institutions, Inc., +1-585-786-1102 /
/Photo: http://www.newscom.com/cgi-bin/prnh/20030114/FISILOGO /
/Web site: http://www.fiiwarsaw.com /
(FISI)
CO: Financial Institutions, Inc.
ST: New York
IN: FIN
SU: DIV
MG
-- NYTH167 --
7710 09/04/200316:14 EDThttp://www.prnewswire.com