WARSAW, N.Y., Oct. 16 /PRNewswire-FirstCall/ -- Financial Institutions,
Inc. (Nasdaq: FISI) today reported that third quarter 2003 net income was
$4,055,000 compared to $6,884,000 for the same quarter last year. Diluted
earnings per share were $0.33 for the third quarter of 2003 compared to $0.58
for the 2002 period. The most significant item impacting third quarter 2003
results was a provision for loan losses of $5,590,000, which represents an
increase of $4,138,000 over the $1,452,000 provision for loan losses for the
third quarter of 2002.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030114/FISILOGO )
Peter G. Humphrey, President and CEO of Financial Institutions, Inc.
(FII), said: "Third quarter 2003 results were adversely affected by additional
loan loss provisions associated with the Company's nonperforming loans.
Deterioration of the financial condition of borrowers with loans in nonaccrual
status contributed to the higher loan loss provision. As indicated in
previous quarters, the Company has committed additional resources toward
management of the Company's nonperforming assets and strengthening the credit
administration function. The Company's net interest income and noninterest
income levels are strong and we remain focused on the execution of our
strategic plan and long-term growth strategy."
At September 30, 2003 nonperforming assets were $51.9 million compared to
$50.7 million at June 30, 2003 and $15.9 million at September 30, 2002. Mr.
Humphrey stated, "Our nonperforming assets have leveled off and our loan
workout team has continued to make progress on strategies to exit and improve
those troubled credits. The continuing weak economy impacts the alternatives
associated with those strategies. We have made significant strides in our
overall credit administration process and addressing our problem loans."
For the third quarter of 2003 net loan charge-offs were $3,054,000, or
0.89% of average loans, compared to $1,098,000, or 0.35% of average loans, in
the same period last year. The ratio of nonperforming assets to total loans
and other real estate was 3.78% at September 30, 2003 compared to 2.90% at
December 31, 2002 and 1.24% a year ago. The provision for loan losses
increased $4,138,000 over the same period from a year ago, reflecting the
increased level of charge-offs and nonperforming loans. The ratio of the
allowance for loan losses to nonperforming loans was 57% at September 30, 2003
compared to 58% at December 31, 2002 and 142% at September 30, 2002. The
ratio of the allowance for loan losses to total loans increased to 2.12% at
September 30, 2003 compared to 1.64% at year end 2002 and 1.60% at September
30, 2002.
In the third quarter of 2003, net interest income decreased 5.0% to
$18,540,000 compared to $19,533,000 in the third quarter of 2002. Net
interest margin was 3.86% for the third quarter of 2003, a drop of 53 basis
points from the 4.39% level for the same period last year. Growth in average
earning assets of $147 million, or 8%, partially offsets the fall in net
interest margin. The growth in average earning assets reflects an average
increase of $119 million in the Company's loan portfolio. Net interest margin
has declined over the past year, as interest rates have declined to
historically low levels. The lost interest on nonaccrual loans has also
contributed to the decline in net interest margin in recent quarters.
Noninterest income increased 24% in the third quarter of 2003 to
$7,059,000 from $5,687,000 for the third quarter of 2002. Income from
mortgage banking activities, which includes gains and losses from the sale of
residential mortgage loans, mortgage servicing income and the amortization of
mortgage servicing rights, increased $674,000 to $1,113,000 in the third
quarter 2003 from $439,000 for the same period last year. The increase in
mortgage banking revenues corresponds with the increase in residential
mortgage refinancing activity resulting from the historically low interest
rate environment. The Company sells most fixed rate newly originated and
refinanced mortgage loans in the secondary market. Gains on sale of
securities increased to $581,000 for the three months ending September 30,
2003 compared to $139,000 for the same period a year ago.
Noninterest expense for the third quarter of 2003 totaled $14,896,000
compared with $13,418,000 for the third quarter of 2002. Salaries and
benefits increased $1,090,000 in the third quarter of 2003 compared to the
same quarter a year ago as a result of additional staffing associated with the
Company's new branch offices and the expansion of the credit administration
function. The additional noninterest expenses, coupled with a slowing of
revenue growth, are the principal factors in an increase in the Company's
efficiency ratio to 55.30%, compared to 49.44% for the same period a year ago.
At September 30, 2003 the Company had total assets of $2.186 billion, an
increase of 8% from $2.034 billion at September 30, 2002. Total loans at
quarter end were $1.373 billion, an increase of $94 million, or 7%, over the
same period last year. Total deposits were $1.828 billion at September 30,
2003, compared with $1.650 billion a year earlier. Total shareholders' equity
increased 5% to $183 million at September 30, 2003 from $173 million a year
earlier. Book value per common share at September 30, 2003 was $14.78, an
increase of 5% from $14.03 at September 30, 2002.
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 48 offices
and 68 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.
This press release contains forward-looking statements as defined by
federal securities laws. These statements may address issues that involve
significant risks, uncertainties, estimates and assumptions made by
management. Actual results could differ materially from current projections.
Please refer to the Company's filings with the Securities and Exchange
Commission for a summary of important factors that could affect the Company's
forward-looking statements. The Company undertakes no obligation to revise
these statements following the date of this press release.
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)
For the three months ended
September 30,
$ %
2003 2002 Change Change
Interest income $27,310$30,343 $(3,033) (10)%
Interest expense 8,770 10,810 (2,040) (19)%
Net interest income 18,540 19,533 (993) (5)%
Provision for loan
losses 5,590 1,452 4,138 285%
Net interest income after
provision for
loan losses 12,950 18,081 (5,131) (28)%
Noninterest income:
Service charges on
deposits 2,973 2,803 170 6%
Financial services
group fees
and commissions 1,408 1,453 (45) (3)%
Mortgage banking
activities 1,113 439 674 154%
Gain on sale and call
of securities 581 139 442 318%
Other 984 853 131 15%
Total noninterest
income 7,059 5,687 1,372 24%
Noninterest expense:
Salaries and employee
benefits 8,491 7,401 1,090 15%
Other 6,405 6,017 388 6%
Total noninterest
expense 14,896 13,418 1,478 11%
Income before income
taxes 5,113 10,350 (5,237) (51)%
Income taxes 1,058 3,466 (2,408) (69)%
Net income 4,055 6,884 (2,829) (41)%
Preferred stock
dividends 374 374 -- -- %
Net income available to
common shareholders $ 3,681$ 6,510 $(2,829) (43)%
Taxable-equivalent net
interest income $19,636$20,675 $(1,039) (5)%
At or for the
three months ended
September 30,
$ %
2003 2002 Change Change
Per common share data:
Net income - basic $0.33$0.59 $(0.26) (44)%
Net income - diluted $0.33$0.58 $(0.25) (43)%
Cash dividends
declared $0.16$0.15$0.01 7%
Book value $14.78$14.03$0.75 5%
Common shares outstanding:
Weighted average
shares -
actual 11,159,433 11,091,398
Weighted average
shares -
diluted 11,265,904 11,217,971
Period end actual 11,162,209 11,091,581
Performance ratios, annualized
Return on average
assets 0.75% 1.36%
Return on average
common equity 8.70% 17.05%
Common dividend
payout ratio 48.48% 25.42%
Net interest margin
(tax-equivalent) 3.86% 4.39%
Efficiency ratio 55.30% 49.44%
Asset quality data:
Loans past due over
90 days
and still accruing $1,723$2,512
Restructured loans 3,098 --
Nonaccrual loans 46,352 11,883
Other real estate
owned 756 1,532
Total nonperforming
assets $51,929$15,927
Asset quality ratios:
Nonperforming loans
to total loans 3.73% 1.13%
Nonperforming assets
to total loans
and ORE 3.78% 1.24%
Net loan charge-offs
to average loans
(annualized) 0.89% 0.35%
Allowance for loan
losses
to total loans 2.12% 1.60%
Allowance for loan
losses
to nonperforming loans 57% 142%
Capital ratios:
Average common equity to
average total assets 7.78% 7.57%
Leverage ratio 7.00% 7.19%
Tier 1 risk-based
capital ratio 9.99% 10.32%
Risk-based capital
ratio 11.25% 11.57%
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Statement of Income
(Dollars in thousands, except per share amounts)
For the nine months ended
September 30,
$ %
2003 2002 Change Change
Interest income $84,601$88,830 $(4,229) (5)%
Interest expense 28,027 32,234 (4,207) (13)%
Net interest income 56,574 56,596 (22) -- %
Provision for loan
losses 14,199 3,640 10,559 290%
Net interest income
after provision for
loan losses 42,375 52,956 (10,581) (20)%
Noninterest income:
Service charges on
deposits 8,399 7,737 662 9%
Financial services
group fees and
commissions 4,110 4,083 27 1%
Mortgage banking
activities 2,849 1,656 1,193 72%
Gain (loss) on sale
and call of
securities 1,023 39 984 2,523%
Other 2,940 2,266 674 30%
Total noninterest
income 19,321 15,781 3,540 22%
Noninterest expense:
Salaries and employee
benefits 25,408 21,829 3,579 16%
Other 20,011 16,782 3,229 19%
Total noninterest
expense 45,419 38,611 6,808 18%
Income before income
taxes 16,277 30,126 (13,849) (46)%
Income taxes 4,276 9,941 (5,665) (57)%
Net income 12,001 20,185 (8,184) (41)%
Preferred stock
dividends 1,122 1,122 -- -- %
Net income available
to common
shareholders $10,879$19,063 $(8,184) (43)%
Taxable-equivalent net
interest income $59,946$60,042 $(96) -- %
At or for the
nine months ended
September 30,
$ %
2003 2002 Change Change
Per common share data:
Net income - basic $0.98$1.72 $(0.74) (43)%
Net income - diluted $0.97$1.70 $(0.73) (43)%
Cash dividends
declared $0.48$0.42$0.06 14%
Common shares outstanding:
Weighted average
shares -
actual 11,142,055 11,057,731
Weighted average
shares -
diluted 11,244,866 11,219,501
Period end actual 11,162,209 11,091,581
Performance ratios, annualized
Return on average
assets 0.74% 1.40%
Return on average
common equity 8.73% 17.87%
Common dividend
payout ratio 48.98% 24.42%
Net interest margin
(tax-equivalent) 3.95% 4.43%
Efficiency ratio 55.87% 49.68%
Net loan charge-offs
to average loans 0.67% 0.26%
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(Dollars in thousands)
September 30,
$ %
2003 2002 Change Change
ASSETS
Cash, due from banks and
interest-bearing
deposits $66,653$46,423$20,230 44%
Federal funds sold 53,228 26,877 26,351 98%
Investment securities 603,795 597,233 6,562 1%
Loans 1,373,455 1,279,025 94,430 7%
Allowance for
loan losses (29,052) (20,474) (8,578) 42%
Loans, net 1,344,403 1,258,551 85,852 7%
Goodwill 40,621 37,293 3,328 9%
Other assets 77,650 67,278 10,372 15%
Total assets $2,186,350$2,033,655$152,695 8%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand 263,433 229,331 34,102 15%
Savings, money
market, and
int-bearing
checking 826,114 748,424 77,690 10%
Certificates of
deposit 738,379 672,233 66,146 10%
Total deposits 1,827,926 1,649,988 177,938 11%
Short-term borrowings 70,392 67,674 2,718 4%
Long-term borrowings 68,606 105,187 (36,581) (35)%
Guaranteed preferred
beneficial interests in
Corporation's junior
subordinated
debentures 16,200 16,200 -- -- %
Other liabilities 20,489 21,272 (783) 4%
Total
liabilities 2,003,613 1,860,321 143,292 8%
Shareholders' equity:
Preferred equity 17,735 17,752 (17) -- %
Common equity 165,002 155,582 9,420 6%
Total shareholders'
equity (1) 182,737 173,334 9,403 5%
Total liabilities and
shareholders'
equity $2,186,350$2,033,655$152,695 8%
(1) Includes the after-tax impact of net unrealized gains on investment
securities classified as available for sale of $8,098 and $9,835 at
September 30, 2003 and 2002, respectively.
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Average Statements of Financial Condition
(Dollars in thousands)
For the three months ended
September 30,
$ %
2003 2002 Change Change
ASSETS
Cash, due from banks and
interest-bearing
deposits $45,077$41,097$ 3,980 10%
Federal funds sold 65,648 14,999 50,649 338%
Investment securities 579,085 601,958 (22,873) (4)%
Loans 1,378,713 1,259,358 119,355 9%
Allowance for loan
losses (26,375) (20,331) (6,044) 30%
Loans, net 1,352,338 1,239,027 113,311 9%
Goodwill 40,621 37,349 3,272 9%
Other assets 74,639 66,847 7,792 12%
Total assets $2,157,408$2,001,277$156,131 8%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand 254,528 222,854 31,674 14%
Savings, money
market, and
int-bearing
checking 789,078 727,625 61,453 8%
Certificates of
deposit 753,866 675,435 78,431 12%
Total deposits 1,797,472 1,625,914 171,558 11%
Short-term borrowings 65,336 76,490 (11,154) (15)%
Long-term borrowings 71,151 94,233 (23,082) (24)%
Guaranteed preferred
beneficial interests in
Corporation's junior
subordinated
debentures 16,200 16,200 -- -- %
Other liabilities 21,677 19,233 2,444 13%
Total
liabilities 1,971,836 1,832,070 139,766 8%
Shareholders' equity:
Preferred equity 17,735 17,752 (17) -- %
Common equity 167,837 151,455 16,382 11%
Total shareholders'
equity 185,572 169,207 16,365 10%
Total liabilities
and shareholders'
equity $2,157,408$2,001,277$156,131 8%
FINANCIAL INSTITUTIONS, INC. AND SUBSIDIARIES
Consolidated Average Statements of Financial Condition
(Dollars in thousands)
For the nine months ended
September 30,
$ %
2003 2002 Change Change
ASSETS
Cash, due from banks and
interest-bearing
deposits $43,627$40,557$ 3,070 8%
Federal funds sold 46,523 28,239 18,284 65%
Investment securities 621,990 564,559 57,431 10%
Loans 1,356,183 1,214,484 141,699 12%
Allowance for loan
losses (24,068) (19,836) (4,232) 21%
Loans, net 1,332,115 1,194,648 137,467 12%
Goodwill 40,615 36,965 3,650 10%
Other assets 72,307 67,905 4,402 6%
Total assets $2,157,177$1,932,873$224,304 12%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand 239,843 214,761 25,082 12%
Savings, money
market, and
int-bearing
checking 797,424 700,510 96,914 14%
Certificates of
deposit 748,428 649,023 99,405 15%
Total deposits 1,785,695 1,564,294 221,401 14%
Short-term borrowings 63,490 87,943 (24,453) (28)%
Long-term borrowings 85,164 84,328 836 1%
Guaranteed preferred
beneficial interests in
Corporation's junior
subordinated
debentures 16,200 16,200 -- -- %
Other liabilities 22,365 19,694 2,671 14%
Total
liabilities 1,972,914 1,772,459 200,455 11%
Shareholders' equity:
Preferred equity 17,738 17,752 (14) -- %
Common equity 166,525 142,662 23,863 17%
Total shareholders'
equity 184,263 160,414 23,849 15%
Total liabilities
and shareholders'
equity $2,157,177$1,932,873$224,304 12%
SOURCE Financial Institutions, Inc.
-0- 10/16/2003
/CONTACT: Ronald A. Miller, Senior Vice President and 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.; FII; Wyoming County Bank; National Bank of
Geneva; Bath National Bank; First Tier Bank & Trust
ST: New York
IN: FIN
SU: ERN
HC
-- NYTH122 --
8943 10/16/200312:05 EDThttp://www.prnewswire.com