Exhibit 99.1

Financial Institutions, Inc.

 

 

 

 

 

NEWS RELEASE

 

220 Liberty Street

For Immediate Release

 

Warsaw, NY 14569

FINANCIAL INSTITUTIONS, INC. ANNOUNCES THIRD QUARTER 2018 RESULTS

WARSAW, N.Y., October 25, 2018 – Financial Institutions, Inc. (Nasdaq: FISI), today reported financial and operational results for the third quarter ended September 30, 2018. Financial Institutions, Inc. (the “Company”) is the parent company of Five Star Bank (the “Bank”), Scott Danahy Naylon, LLC (“SDN”), Courier Capital, LLC (“Courier Capital”) and HNP Capital, LLC (“HNP Capital”).

Net income for the quarter was $10.6 million, 28% higher than $8.3 million in the third quarter of 2017. After preferred dividends, net income available to common shareholders was $10.2 million, or $0.64 per diluted share, compared to $7.9 million, or $0.52 per diluted share, in the third quarter of 2017.

President and Chief Executive Officer Martin K. Birmingham stated, “Strong results this quarter were driven by loan growth, asset quality and a lower tax rate. Investments in experienced producers and leaders over the past 24 months contributed to total loan growth of 3% in the quarter, with especially strong growth in commercial loans. A commitment to our credit culture and responsible lending practices are reflected in the ratio of non-performing loans to total loans of 0.26%, a 10-year low for our Company.  

“It was also an excellent quarter for growth in noninterest income, driven by strategic initiatives and investments including the acquisition of wealth management firms, limited partnership investments, expanded residential mortgage lending and a derivative financial instrument program. We also benefitted from the strength of our deposit franchise and deep roots in the rural towns and villages of Western and Central New York.

“We remain committed to executing our strategic plan, which we believe will result in the delivery of responsible and sustainable growth and strong returns for our shareholders.”  

Chief Financial Officer Kevin B. Klotzbach added, “Our investment securities portfolio decreased by $49.1 million during the quarter, primarily due to maturities, sales and payments received on municipal bonds and mortgage-backed securities. Cash received was used to fund loans in continuation of our strategy to convert marketable securities into loans.

“As a result of the success and positive momentum of our relationship-based commercial and residential lending businesses, the consumer indirect loan portfolio now comprises 30% of total loans – down from a high of 35% at the end of 2013.

“In early October, we exceeded two important thresholds. For the first time in the history of the Company our total loan portfolio exceeded $3 billion and municipal deposits exceeded $1 billion. We view the municipal business as a profitable core competency for the Bank and are pleased with our progress in growing the portfolio.”

Third Quarter 2018 Highlights:

 

Diluted earnings per share of $0.64 was $0.12, or 23.1%, higher than the third quarter of 2017

 

Net interest income of $30.8 million was $2.4 million, or 8.4%, higher than the third quarter of 2017

 

Return on average assets was 1.0%

 

Return on average common equity was 10.8%

 

-

Return on average tangible common equity was 13.7% (1)

 

Total assets, interest-earning assets, loans and deposits all reached record-high levels at quarter-end:

 

-

Total assets increased $67.1 million during the quarter, to $4.26 billion

 

-

Total interest-earning assets increased $42.6 million during the quarter, to $3.93 billion

 

-

Total loans increased $88.1 million during the quarter, to $2.99 billion

 

-

Total deposits increased $223.6 million during the quarter, to $3.49 billion

 

The quarterly cash dividend of $0.24 per common share represented a 3.0% annualized yield as of September 30, 2018, and a return of 37.5% of third quarter net income to common shareholders


Page 1

 


 

Registration Statement

In August 2018, the Company filed a shelf registration statement for up to $100 million of securities and the Securities and Exchange Commission declared it effective. The Company’s previous shelf registration statement, for the same amount and with similar terms, expired earlier this year.

Net Interest Income and Net Interest Margin

Net interest income was $30.8 million in the quarter, $736 thousand higher than the second quarter of 2018 and $2.4 million higher than the third quarter of 2017.

 

Average interest-earning assets for the quarter were $3.9 billion, $51.2 million higher than the second quarter of 2018 and $231.9 million higher than the third quarter of 2017. The primary driver of the increase was organic loan growth.

 

Third quarter 2018 net interest margin was 3.18%, one basis point higher than the second quarter of 2018 and the third quarter of 2017.

Noninterest Income

Noninterest income was $9.9 million in the quarter compared to $8.5 million in the second quarter of 2018 and $8.6 million in the third quarter of 2017.

 

Investment advisory fees were $334 thousand higher than the second quarter of 2018 and $748 thousand higher than the third quarter of 2017. The increase compared to the second quarter of 2018 was primarily the result of the June 1, 2018 acquisition of Rochester-based investment advisory firm HNP Capital. The increase compared to the third quarter of 2017 was primarily the result of the HNP Capital acquisition, the August 2017 acquisition of an investment advisor based in the Buffalo suburb of Williamsville, New York, and growth in assets under management at Courier Capital.

 

Insurance income was $483 thousand higher than the second quarter of 2018 and $13 thousand higher than the third quarter of 2017. The increase compared to the second quarter of 2018 was primarily the result of seasonality in this line of business combined with non-renewals in one of the agency’s specialty lines of business that negatively impacted second quarter income.

 

Income from investments in limited partnerships was $205 thousand higher than the second quarter of 2018 and $342 thousand higher than the third quarter of 2017. The Company has made several investments in limited partnerships, primarily small business investment companies, and accounts for these investments under the equity method. Income from these investments fluctuates based on the maturity and performance of the underlying investments.

 

Net gain on sale of loans held for sale was $172 thousand higher than the second quarter of 2018 and $153 thousand higher than the third quarter of 2017, driven by an increase in residential mortgage lending originations as a result of our investments in this line of business.

 

Net gain on derivative instruments primarily consists of income associated with interest rate swap products offered to commercial loan customers. The program was implemented in the third quarter of 2017. The gain this quarter was $276 thousand higher than the second quarter of 2018 and $227 thousand higher than the third quarter of 2017 as a result of an increase in the number and value of transactions executed in the quarter.

Noninterest Expense

Noninterest expense was $25.5 million in the quarter compared to $23.4 million in the second quarter of 2018 and $22.5 million in the third quarter of 2017.

 

Salaries and employee benefits expense of $14.0 million was $1.1 million higher than the second quarter of 2018 and $1.6 million higher than the third quarter of 2017. Higher expense is primarily the result of investments in Bank personnel and the two wealth management subsidiary acquisitions. The average number of full-time equivalent employees increased from 627 in the third quarter of 2017 to 661 in the second quarter of 2018 and 681 in the third quarter of 2018.

 

Occupancy and equipment expense of $4.3 million was $170 thousand higher than the second quarter of 2018 and $250 thousand higher than the third quarter of 2017. The increase as compared to the second quarter of 2018 was primarily due to seasonality of expenses related to landscaping and repairs. The increase as compared to the third quarter of 2017 was primarily the result of investments in software and facilities.

 

 

Professional services expense of $1.4 million was $457 thousand higher than the second quarter of 2018 and $196 thousand higher than the third quarter of 2017 primarily due to third quarter expenses related to the August 16th registration statement and professional search services related to the addition of talent.

 


Page 2

 


 

 

Advertising and promotions expense of $949 thousand was $228 thousand higher than the second quarter of 2018 and $605 thousand higher than the third quarter of 2017. In February 2018, a Five Star Bank brand campaign was launched resulting in higher year-over-year expenses and quarterly fluctuations in expense due to timing of various aspects of the campaign.

Income Taxes

Income tax expense was $2.6 million in the third quarter of 2018 compared to $3.0 million in the second quarter of 2018 and $3.5 million in the third quarter of 2017. The effective tax rate was 19.5% in the third quarter of 2018 compared to 19.7% in the second quarter of 2018 and 29.5% in the third quarter of 2017. The decrease in 2018 compared to 2017 reflects the enactment of the Tax Cuts and Jobs Act (the “TCJ Act”).

Balance Sheet and Capital Management

Total assets were $4.26 billion at September 30, 2018, up $67.1 million from $4.19 billion at June 30, 2018, and up $236.8 million from $4.02 billion at September 30, 2017. The increases were largely the result of loan growth.

Total loans were $2.99 billion at September 30, 2018, up $88.1 million, or 3.0%, from June 30, 2018, and up $372.1 million, or 14.2%, from September 30, 2017.

 

Commercial business loans totaled $537.9 million, up $30.9 million, or 6.1%, from June 30, 2018, and up $118.5 million, or 28.3%, from September 30, 2017.

 

Commercial mortgage loans totaled $905.0 million, up $38.0 million, or 4.4%, from June 30, 2018, and up $147.0 million, or 19.4%, from September 30, 2017.

 

Residential real estate loans totaled $507.6 million, up $17.7 million, or 3.6%, from June 30, 2018, and up $61.6 million, or 13.8%, from September 30, 2017.

 

Consumer indirect loans totaled $909.4 million, up $3.2 million, or 0.4%, from June 30, 2018, and up $51.9 million, or 6.1%, from September 30, 2017.

Total deposits were $3.49 billion at September 30, 2018, an increase of $223.6 million from June 30, 2018, and an increase of $204.2 million from September 30, 2017. Business development efforts in municipal and retail banking contributed to increases for both periods. The remaining portion of the increase from June 30, 2018, was the result of public deposit seasonality. Public deposit balances represented 28% of total deposits at September 30, 2018, compared to 26% at June 30, 2018 and 28% at September 30, 2017.

Short-term borrowings were $308.2 million at September 30, 2018, a decrease of $164.6 million from June 30, 2018, and a decrease of $2.6 million from September 30, 2017. The decrease from June 30, 2018, was associated with the seasonality of municipal deposits.

Shareholders’ equity was $392.2 million at September 30, 2018, compared to $386.9 million at June 30, 2018, and $366.0 million at September 30, 2017. Common book value per share was $23.54 at September 30, 2018, an increase of $0.33 or 1.4% from $23.21 at June 30, 2018, and an increase of $1.23 or 5.5% from $22.31 at September 30, 2017. Changes in shareholders’ equity and common book value per share are attributable to net income less dividends paid plus proceeds from the 2017 Equity Offering, net of the change in unrealized gain (loss) on investment securities.

During the third quarter of 2018, the Company declared a common stock dividend of $0.24 per common share. The dividend returned 37.5% of third quarter net income to common shareholders.

The Company’s regulatory capital ratios at September 30, 2018, remained stable as compared to the prior quarter and prior year:

 

Leverage Ratio was 8.18%, compared to 8.10% and 7.91% at June 30, 2018, and September 30, 2017, respectively.

 

Common Equity Tier 1 Capital Ratio was 9.81%, compared to 9.82% and 10.09% at June 30, 2018, and September 30, 2017, respectively.

 

Tier 1 Capital Ratio was 10.34%, compared to 10.37% and 10.69% at June 30, 2018, and September 30, 2017, respectively.

 

Total Risk-Based Capital Ratio was 12.58%, compared to 12.66% and 13.24% at June 30, 2018, and September 30, 2017, respectively.


Page 3

 


 

Credit Quality

Non-performing loans were $7.9 million at September 30, 2018, compared to $9.7 million at June 30, 2018, and $12.6 million at September 30, 2017. The ratio of non-performing loans to total loans was 0.26% at September 30, 2018, compared to 0.34% at June 30, 2018, and 0.48% at September 30, 2017.

The provision for loan losses in the quarter was $2.1 million, compared to $40 thousand in the second quarter of 2018 and $2.8 million in the third quarter of 2017. The second quarter 2018 provision was unusually low as a result of a combination of factors which include lower historical net charge-off experience, an increase in the collateral values supporting impaired loans, and improved qualitative factors which include but are not limited to: national and local economic trends and conditions, the regulatory environment and levels and trends in delinquent and non-accruing loans.

The ratio of allowance for loan losses to total loans was 1.14% at September 30, 2018, 1.17% at June 30, 2018, and 1.31% at September 30, 2017. The decline in 2018 is primarily attributable to a combination of growth in the loan portfolio and the release of reserves due to favorable asset quality trends and qualitative factors.

The ratio of allowance for loan losses to non-performing loans was 433% at September 30, 2018, 349% at June 30, 2018, and 273% at September 30, 2017. The increase in 2018 is the result of a reduction in non-performing loans, consistent with favorable asset quality trends.

Conference Call

The Company will host an earnings conference call and audio webcast on October 26, 2018 at 9:00 a.m. Eastern Time. The call will be hosted by Martin K. Birmingham, President and Chief Executive Officer, and Kevin B. Klotzbach, Chief Financial Officer. The live webcast will be available in listen-only mode on the Company’s website at www.fiiwarsaw.com. Within the United States, listeners may also access the call by dialing 1-888-346-9290 and requesting the Financial Institutions, Inc. call. The webcast replay will be available on the Company’s website for at least 30 days.

About Financial Institutions, Inc.

Financial Institutions, Inc. provides diversified financial services through its subsidiaries Five Star Bank, SDN, Courier Capital and HNP Capital. Five Star Bank provides a wide range of consumer and commercial banking and lending services to individuals, municipalities and businesses through a network of more than 50 offices throughout Western and Central New York State. SDN provides a broad range of insurance services to personal and business clients across 45 states. Courier Capital and HNP Capital provide customized investment management, investment consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans. Financial Institutions, Inc. and its subsidiaries employ approximately 700 individuals. The Company’s stock is listed on the Nasdaq Global Select Market under the symbol FISI. Additional information is available at www.fiiwarsaw.com.

Non-GAAP Financial Information

This news release contains disclosure regarding tangible assets, tangible common equity, tangible common equity to tangible assets, tangible common book value per share, average tangible assets, average tangible common equity and return on average tangible common equity, which are determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes that these non-GAAP measures are useful to our investors as measures of the strength of the Company’s capital and ability to generate earnings on tangible common equity invested by our shareholders. These non-GAAP measures provide supplemental information that may help investors to analyze our capital position without regard to the effects of intangible assets.Non-GAAP financial measures have inherent limitations and are not uniformly applied by issuers. Therefore, these non-GAAP financial measures should not be considered in isolation, or as a substitute for comparable measures prepared in accordance with GAAP. The comparable GAAP financial measures and reconciliation to the comparable GAAP financial measures can be found in Appendix A to this document.


Page 4

 


 

Safe Harbor Statement

This press release may contain forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended that involve significant risks and uncertainties. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “preliminary,” or “range.” Statements herein are based on certain assumptions and analyses by the Company and factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: the Company’s ability to implement its strategic plan, the Company’s ability to redeploy investment assets into loan assets, whether the Company experiences greater credit losses than expected, whether the Company experiences breaches of its, or third party, information systems, the attitudes and preferences of the Company’s customers, the Company’s ability to successfully integrate and profitably operate SDN, Courier Capital, HNP Capital and other acquisitions, the competitive environment, fluctuations in the fair value of securities in its investment portfolio, changes in the regulatory environment and the Company’s compliance with regulatory requirements, changes in interest rates, general economic and credit market conditions nationally and regionally. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the SEC. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.

 

(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

 

*****

 

 

 

 

For additional information contact:

 

 

Kevin B. Klotzbach

 

Shelly J. Doran

Chief Financial Officer & Treasurer

 

Director Investor & External Relations

Phone: 585.786.1130

 

Phone: 585.627.1362

Email: KBKlotzbach@five-starbank.com

 

Email: SJDoran@five-starbank.com

 

 

 

 

 

 

Page 5

 


 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)

(Amounts in thousands, except per share amounts)

 

 

2018

 

 

2017

 

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

SELECTED BALANCE SHEET DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

117,331

 

 

$

89,094

 

 

$

122,914

 

 

$

99,195

 

 

$

97,838

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

458,310

 

 

 

492,228

 

 

 

510,197

 

 

 

524,973

 

 

 

551,491

 

Held-to-maturity

 

 

459,623

 

 

 

474,803

 

 

 

501,905

 

 

 

516,466

 

 

 

538,332

 

Total investment securities

 

 

917,933

 

 

 

967,031

 

 

 

1,012,102

 

 

 

1,041,439

 

 

 

1,089,823

 

Loans held for sale

 

 

3,166

 

 

 

2,014

 

 

 

1,523

 

 

 

2,718

 

 

 

2,407

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial business

 

 

537,942

 

 

 

507,021

 

 

 

464,139

 

 

 

450,326

 

 

 

419,415

 

Commercial mortgage

 

 

905,011

 

 

 

867,049

 

 

 

821,091

 

 

 

808,908

 

 

 

757,987

 

Residential real estate loans

 

 

507,598

 

 

 

489,940

 

 

 

477,935

 

 

 

465,283

 

 

 

446,044

 

Residential real estate lines

 

 

111,204

 

 

 

113,287

 

 

 

115,346

 

 

 

116,309

 

 

 

117,621

 

Consumer indirect

 

 

909,434

 

 

 

906,237

 

 

 

898,099

 

 

 

876,570

 

 

 

857,528

 

Other consumer

 

 

17,142

 

 

 

16,678

 

 

 

16,654

 

 

 

17,621

 

 

 

17,640

 

Total loans

 

 

2,988,331

 

 

 

2,900,212

 

 

 

2,793,264

 

 

 

2,735,017

 

 

 

2,616,235

 

Allowance for loan losses

 

 

33,955

 

 

 

33,955

 

 

 

35,594

 

 

 

34,672

 

 

 

34,347

 

Total loans, net

 

 

2,954,376

 

 

 

2,866,257

 

 

 

2,757,670

 

 

 

2,700,345

 

 

 

2,581,888

 

Total interest-earning assets

 

 

3,927,238

 

 

 

3,884,628

 

 

 

3,818,839

 

 

 

3,782,659

 

 

 

3,708,385

 

Goodwill and other intangible assets, net

 

 

78,853

 

 

 

79,188

 

 

 

74,415

 

 

 

74,703

 

 

 

74,997

 

Total assets

 

 

4,258,385

 

 

 

4,191,315

 

 

 

4,152,432

 

 

 

4,105,210

 

 

 

4,021,591

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand

 

 

748,167

 

 

 

719,084

 

 

 

702,900

 

 

 

718,498

 

 

 

710,865

 

Interest-bearing demand

 

 

711,321

 

 

 

658,107

 

 

 

717,567

 

 

 

634,203

 

 

 

656,703

 

Savings and money market

 

 

988,486

 

 

 

1,012,972

 

 

 

1,052,270

 

 

 

1,005,317

 

 

 

1,050,487

 

Time deposits

 

 

1,037,755

 

 

 

872,004

 

 

 

907,272

 

 

 

852,156

 

 

 

863,453

 

Total deposits

 

 

3,485,729

 

 

 

3,262,167

 

 

 

3,380,009

 

 

 

3,210,174

 

 

 

3,281,508

 

Short-term borrowings

 

 

308,200

 

 

 

472,800

 

 

 

327,600

 

 

 

446,200

 

 

 

310,800

 

Long-term borrowings, net

 

 

39,184

 

 

 

39,167

 

 

 

39,149

 

 

 

39,131

 

 

 

39,114

 

Total interest-bearing liabilities

 

 

3,084,946

 

 

 

3,055,050

 

 

 

3,043,858

 

 

 

2,977,007

 

 

 

2,920,557

 

Shareholders’ equity

 

 

392,154

 

 

 

386,937

 

 

 

380,302

 

 

 

381,177

 

 

 

366,002

 

Common shareholders’ equity

 

 

374,825

 

 

 

369,608

 

 

 

362,973

 

 

 

363,848

 

 

 

348,668

 

Tangible common equity (1)

 

 

295,972

 

 

 

290,420

 

 

 

288,558

 

 

 

289,145

 

 

 

273,671

 

Unrealized gain (loss) on investment securities,

     net of tax

 

$

(12,885

)

 

$

(11,063

)

 

$

(8,503

)

 

$

(2,173

)

 

$

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

15,925

 

 

 

15,924

 

 

 

15,901

 

 

 

15,925

 

 

 

15,626

 

Treasury shares

 

 

131

 

 

 

132

 

 

 

155

 

 

 

131

 

 

 

136

 

CAPITAL RATIOS AND PER SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leverage ratio

 

 

8.18

%

 

 

8.10

%

 

 

8.11

%

 

 

8.13

%

 

 

7.91

%

Common equity Tier 1 capital ratio

 

 

9.81

%

 

 

9.82

%

 

 

10.09

%

 

 

10.16

%

 

 

10.09

%

Tier 1 capital ratio

 

 

10.34

%

 

 

10.37

%

 

 

10.65

%

 

 

10.74

%

 

 

10.69

%

Total risk-based capital ratio

 

 

12.58

%

 

 

12.66

%

 

 

13.09

%

 

 

13.19

%

 

 

13.24

%

Common equity to assets

 

 

8.80

%

 

 

8.82

%

 

 

8.74

%

 

 

8.86

%

 

 

8.67

%

Tangible common equity to tangible assets (1)

 

 

7.08

%

 

 

7.06

%

 

 

7.08

%

 

 

7.17

%

 

 

6.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common book value per share

 

$

23.54

 

 

$

23.21

 

 

$

22.83

 

 

$

22.85

 

 

$

22.31

 

Tangible common book value per share (1)

 

$

18.59

 

 

$

18.24

 

 

$

18.15

 

 

$

18.16

 

 

$

17.51

 

Stock price (Nasdaq: FISI):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$

33.70

 

 

$

34.35

 

 

$

33.00

 

 

$

34.10

 

 

$

31.15

 

Low

 

$

30.12

 

 

$

28.95

 

 

$

29.50

 

 

$

28.70

 

 

$

25.65

 

Close

 

$

31.40

 

 

$

32.90

 

 

$

29.60

 

 

$

31.10

 

 

$

28.80

 

 

                

 

(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this Non-GAAP measure.

 

Page 6

 


 

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)

(Amounts in thousands, except per share amounts)

 

 

Nine Months Ended

 

 

2018

 

 

2017

 

 

 

September 30,

 

 

Third

 

 

Second

 

 

First

 

 

Fourth

 

 

Third

 

 

 

2018

 

 

2017

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

SELECTED INCOME STATEMENT DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

111,306

 

 

$

95,343

 

 

$

39,035

 

 

$

36,868

 

 

$

35,403

 

 

$

34,767

 

 

$

33,396

 

Interest expense

 

 

20,772

 

 

 

12,488

 

 

 

8,214

 

 

 

6,783

 

 

 

5,775

 

 

 

5,007

 

 

 

4,958

 

Net interest income

 

 

90,534

 

 

 

82,855

 

 

 

30,821

 

 

 

30,085

 

 

 

29,628

 

 

 

29,760

 

 

 

28,438

 

Provision for loan losses

 

 

5,050

 

 

 

9,415

 

 

 

2,061

 

 

 

40

 

 

 

2,949

 

 

 

3,946

 

 

 

2,802

 

Net interest income after provision

    for loan losses

 

 

85,484

 

 

 

73,440

 

 

 

28,760

 

 

 

30,045

 

 

 

26,679

 

 

 

25,814

 

 

 

25,636

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

5,254

 

 

 

5,486

 

 

 

1,813

 

 

 

1,703

 

 

 

1,738

 

 

 

1,905

 

 

 

1,901

 

Insurance income

 

 

3,918

 

 

 

4,052

 

 

 

1,501

 

 

 

1,018

 

 

 

1,399

 

 

 

1,214

 

 

 

1,488

 

ATM and debit card

 

 

4,509

 

 

 

4,230

 

 

 

1,557

 

 

 

1,531

 

 

 

1,421

 

 

 

1,491

 

 

 

1,445

 

Investment advisory

 

 

5,934

 

 

 

4,357

 

 

 

2,245

 

 

 

1,911

 

 

 

1,778

 

 

 

1,747

 

 

 

1,497

 

Company owned life insurance

 

 

1,333

 

 

 

1,367

 

 

 

440

 

 

 

443

 

 

 

450

 

 

 

414

 

 

 

449

 

Investments in limited partnerships

 

 

1,019

 

 

 

91

 

 

 

328

 

 

 

123

 

 

 

568

 

 

 

19

 

 

 

(14

)

Loan servicing

 

 

396

 

 

 

348

 

 

 

78

 

 

 

203

 

 

 

115

 

 

 

91

 

 

 

105

 

Net gain on sale of loans held for sale

 

 

530

 

 

 

270

 

 

 

303

 

 

 

131

 

 

 

96

 

 

 

106

 

 

 

150

 

Net (loss) gain on investment securities

 

 

(88

)

 

 

600

 

 

 

(95

)

 

 

7

 

 

 

-

 

 

 

660

 

 

 

184

 

Net gain on derivative instruments

 

 

606

 

 

 

127

 

 

 

354

 

 

 

78

 

 

 

174

 

 

 

4

 

 

 

127

 

Net gain on other assets

 

 

49

 

 

 

25

 

 

 

37

 

 

 

9

 

 

 

3

 

 

 

12

 

 

 

21

 

Contingent consideration liability adjustment

 

 

-

 

 

 

1,200

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other

 

 

3,971

 

 

 

3,590

 

 

 

1,337

 

 

 

1,392

 

 

 

1,242

 

 

 

1,324

 

 

 

1,221

 

Total noninterest income

 

 

27,431

 

 

 

25,743

 

 

 

9,898

 

 

 

8,549

 

 

 

8,984

 

 

 

8,987

 

 

 

8,574

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

40,270

 

 

 

35,703

 

 

 

13,970

 

 

 

12,871

 

 

 

13,429

 

 

 

12,972

 

 

 

12,348

 

Occupancy and equipment

 

 

12,911

 

 

 

12,235

 

 

 

4,337

 

 

 

4,167

 

 

 

4,407

 

 

 

4,058

 

 

 

4,087

 

Professional services

 

 

3,132

 

 

 

3,229

 

 

 

1,353

 

 

 

896

 

 

 

883

 

 

 

854

 

 

 

1,157

 

Computer and data processing

 

 

3,884

 

 

 

3,691

 

 

 

1,291

 

 

 

1,358

 

 

 

1,235

 

 

 

1,244

 

 

 

1,208

 

Supplies and postage

 

 

1,545

 

 

 

1,496

 

 

 

485

 

 

 

548

 

 

 

512

 

 

 

507

 

 

 

492

 

FDIC assessments

 

 

1,486

 

 

 

1,366

 

 

 

498

 

 

 

480

 

 

 

508

 

 

 

451

 

 

 

440

 

Advertising and promotions

 

 

2,647

 

 

 

1,451

 

 

 

949

 

 

 

721

 

 

 

977

 

 

 

720

 

 

 

344

 

Amortization of intangibles

 

 

927

 

 

 

876

 

 

 

334

 

 

 

305

 

 

 

288

 

 

 

294

 

 

 

288

 

Goodwill impairment

 

 

-

 

 

 

1,575

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Other

 

 

6,271

 

 

 

5,728

 

 

 

2,304

 

 

 

2,099

 

 

 

1,868

 

 

 

2,063

 

 

 

2,103

 

Total noninterest expense

 

 

73,073

 

 

 

67,350

 

 

 

25,521

 

 

 

23,445

 

 

 

24,107

 

 

 

23,163

 

 

 

22,467

 

Income before income taxes

 

 

39,842

 

 

 

31,833

 

 

 

13,137

 

 

 

15,149

 

 

 

11,556

 

 

 

11,638

 

 

 

11,743

 

Income tax expense

 

 

7,807

 

 

 

9,365

 

 

 

2,560

 

 

 

2,979

 

 

 

2,268

 

 

 

580

 

 

 

3,464

 

Net income

 

 

32,035

 

 

 

22,468

 

 

 

10,577

 

 

 

12,170

 

 

 

9,288

 

 

 

11,058

 

 

 

8,279

 

Preferred stock dividends

 

 

1,096

 

 

 

1,097

 

 

 

365

 

 

 

366

 

 

 

365

 

 

 

365

 

 

 

366

 

Net income available to common shareholders

 

$

30,939

 

 

$

21,371

 

 

$

10,212

 

 

$

11,804

 

 

$

8,923

 

 

$

10,693

 

 

$

7,913

 

FINANCIAL RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic

 

$

1.95

 

 

$

1.44

 

 

$

0.64

 

 

$

0.74

 

 

$

0.56

 

 

$

0.68

 

 

$

0.52

 

Earnings per share – diluted

 

$

1.94

 

 

$

1.44

 

 

$

0.64

 

 

$

0.74

 

 

$

0.56

 

 

$

0.68

 

 

$

0.52

 

Cash dividends declared on common stock

 

$

0.72

 

 

$

0.63

 

 

$

0.24

 

 

$

0.24

 

 

$

0.24

 

 

$

0.22

 

 

$

0.21

 

Common dividend payout ratio

 

 

36.92

%

 

 

43.75

%

 

 

37.50

%

 

 

32.43

%

 

 

42.86

%

 

 

32.35

%

 

 

40.38

%

Dividend yield (annualized)

 

 

3.07

%

 

 

2.92

%

 

 

3.03

%

 

 

2.93

%

 

 

3.29

%

 

 

2.81

%

 

 

2.89

%

Return on average assets

 

 

1.03

%

 

 

0.78

%

 

 

1.00