Exhibit 99.1

 

 

 

 

 

NEWS RELEASE  

 

 

 

For Immediate Release

 

 

 

FINANCIAL INSTITUTIONS, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2020 RESULTS

WARSAW, N.Y., January 28, 2021

– Financial Institutions, Inc. (NASDAQ:FISI) (the “Company” “we” or “us”), parent company of Five Star Bank (the “Bank”), SDN Insurance Agency, LLC (“SDN”), Courier Capital, LLC (“Courier Capital”) and HNP Capital, LLC (“HNP Capital”), today reported financial and operational results for the fourth quarter and year ended December 31, 2020.

Results for the Quarter

 

Net income was $13.8 million compared to $13.1 million in 2019. After preferred dividends, net income available to common shareholders was $13.4 million, or $0.84 per diluted share, compared to $12.7 million, or $0.79 per diluted share, in 2019.

 

Results for 2020 and 2019 were positively impacted by a reduction in income tax expense of approximately $915 thousand and $2.7 million, respectively, for federal and state tax benefits related to tax credit investments placed in service. These tax credit investments also generated a net loss of $155 thousand in 2020 and $528 thousand in 2019, recorded in noninterest income, reducing the net positive impact to $760 thousand in 2020 and $2.2 million in 2019.

 

Pre-tax pre-provision income(1) was the highest in Company history at $21.0 million for the quarter, an increase of $4.9 million from the fourth quarter of 2019.

 

Fourth quarter 2020 net income and pre-tax pre-provision income reflect approximately $148 thousand of non-recurring expenses related to the branch closure announced in October of 2020.

Results for the Year

 

Net income was $38.3 million compared to $48.9 million in 2019. After preferred dividends, net income available to common shareholders was $36.9 million, or $2.30 per diluted share, compared to $47.4 million, or $2.96 per diluted share, in 2019.

 

Results for 2020 and 2019 were positively impacted by a reduction in income tax expense of approximately $1.5 million and $2.7 million, respectively, for federal and state tax benefits related to tax credit investments placed in service. These tax credit investments also generated a net loss of $275 thousand in 2020 and $528 thousand in 2019, recorded in noninterest income, reducing the net positive impact to $1.2 million in 2020 and $2.2 million in 2019. Results for 2019 were negatively impacted by approximately $600 thousand of income tax expense recognized in the third quarter related to an adjustment to a provisional amount recorded in 2017.

 

Pre-tax pre-provision income was $72.9 million, an increase of $5.4 million from 2019.

 

Full year 2020 net income and pre-tax pre-provision income reflect approximately $1.7 million of non-recurring expenses related to the previously announced closure of seven bank branches and a staffing reduction. First quarter 2020 results were negatively impacted by a significantly higher provision for credit losses of $13.9 million, as compared to $1.2 million in the first quarter of 2019. The after-tax impact of the higher provision as compared to first quarter of 2019 was $0.59 per diluted share. The higher provision was driven by the adoption of the current expected credit loss (“CECL”) standard and the impact of COVID-19 on the economic environment.  

“Our Company reported strong fourth quarter results in a challenging environment,” said President and Chief Executive Officer Martin K. Birmingham. “Record net interest income, noninterest income bolstered by our diversified revenue stream and continued expense discipline all contributed to record-high net income, earnings per share and pre-tax pre-provision income, as well as an efficiency ratio below 56%.”

“I am proud of the many accomplishments of our organization in 2020. We have delivered uninterrupted critical banking services to our customers throughout the pandemic and continue to modify operations to keep our customers and associates safe. We rolled out a series of solutions to support our customers that included the temporary waiving or elimination of fees and offered the opportunity for loan payment relief or deferrals. We also helped existing and new customers take advantage of Paycheck Protection Program (“PPP”) loans

Page 1

 


The following information was filed by Financial Institutions Inc (FISI) on Friday, January 29, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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