Financial Institutions (FISI) Tops Q3 EPS by 10c

Financial Institutions (NASDAQ: FISI) reported Q3 EPS of $0.78, $0.10 better than the analyst estimate of $0.68.

• Net income was the highest in Company history at $12.8 million ‒ an increase of $2.3 million
• Pre-tax pre-provision income was also highest in Company history at $19.0 million ‒ an increase of $3.8 million
• Net interest income grew 5.1% to $32.5 million
• Net interest margin (“NIM”) expanded to 3.29% from 3.17%
• Return on average assets (“ROA”) increased to 1.19% from 1.00%
• Common equity to assets ratio at quarter-end was 9.58% ‒ an increase of 19 basis points during the quarter and an increase of 78 basis points from September 30, 2018
• Tangible common equity to tangible assets(1), or TCE ratio, was 7.99% at quarter-end ‒ an increase of 22 basis points during the quarter and an increase of 91 basis points from September 30, 2018
• Completed a repositioning of the balance sheet, redeploying investment securities into higher-yielding loans- Investment securities comprised 18.0% of total assets at quarter-end, down from 21.6% at September 30, 2018
• Continued strategy to downscale the consumer indirect portfolio- Portfolio decreased 5.0% from September 30, 2018- Portfolio comprised 27.4% of total loan portfolio compared to 30.4% at September 30, 2018

President and Chief Executive Officer Martin K. Birmingham stated, “Our teammates delivered another strong quarter of earnings and returns for our shareholders, demonstrating broad-based strength of our business model and successful execution of our strategic initiatives. We generated record-breaking earnings and strengthened our capital ratios while expanding the net interest margin in a challenging interest rate environment.

“Our residential loan portfolio grew 2.3% quarter-over-quarter while the commercial portfolio was relatively flat because of increased loan payoff activity. Commercial loan demand remains stable in our markets and we expect portfolio growth in the fourth quarter. As a result of our continued focus on the profitability of new consumer indirect loan originations, this portfolio decreased by 1.4% quarter-over-quarter while the average portfolio yield increased by nine basis points.”

Chief Financial Officer Justin K. Bigham added, “We once again delivered results in line with our expectations, including continued improvement in our NIM, ROA and TCE ratio. While we did experience an increase in expenses related to strong revenue growth in the quarter, we generated strong earnings per share growth and positive operating leverage.”

For earnings history and earnings-related data on Financial Institutions (FISI) click here.

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