NASDAQ$FISI

Financial Institutions Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Financial results for the third quarter of 2023 were announced.

Financial Institutions, Inc. reported a net income of $14.0 million for Q3 2023, slightly up from $13.9 million in Q3 2022. Total deposits increased to $5.32 billion, and total loans reached $4.43 billion. The company's credit quality metrics remained strong, with annualized net charge-offs to average loans at 0.14%.

  • Total deposits increased by 5.6% from the previous quarter, reaching $5.32 billion.
  • Total loans increased by 0.8% from the previous quarter, reaching $4.43 billion.
  • Net interest income decreased by 1.6% from the previous quarter to $41.7 million.
  • Noninterest income decreased by 8.5% from the previous quarter to $10.5 million.

Headline financials

Total Revenue

$52.2M

Previous: $55.7M-6.4%
EPS (adj)

$0.88

Previous: $0.88+0.0%
Net Interest Margin

2.9%

Previous: 3.3%-11.3%
Leverage Ratio

8.2%

Previous: 8.3%-1.8%
CET1 Capital Ratio

9.3%

Previous: 9.8%-5.0%
Tier 1 Capital Ratio

9.6%

Previous: 10.1%-5.3%
Total Capital Ratio

11.9%

Previous: 12.5%-4.9%
Capital Expenditures

-$1.74M

Previous: -$5.64M+69.2%
Free Cash Flow

$56.8M

Previous: $112M-49.2%
Net Income

$14M

Previous: $13.9M+1.2%
Operating Income

$2.05M

Previous: $31.2M-93.4%
Gross Profit

$52.2M

Previous: $55.7M-6.4%
Cash & Equivalents

$192M

Previous: $119M+62.0%
Total Assets

$6.14B

Previous: $5.62B+9.2%
Stock-Based Comp

$721K

Previous: $662K+8.9%

Revenue & EPS history

Financial Institutions · Revenue · Quarterly

$52.2M

Q3 2023-6.4%vs Q3 2022
Beat estimate in 10 of 14 quarters(71%)
ActualEstimate

Revenue by segment

Financial Institutions · $10.2M total across 9 segments · Q3 2023

  • Investment Advisory
    $2.54M-6.5%
  • Card Interchange
    $2.09M
  • Insurance Income
    $1.68M+6.8%
  • Other
    $1.41M
  • Deposit Fees
    $1.21M
  • COLI Income
    $1.03M
  • Limited Partnerships
    $391K
  • Loan Servicing
    $135K
  • Tax Credit Loss
    -$333K

Forward guidance

Financial Institutions, Inc. anticipates margin stability moving forward, supported by successful deposit gathering and the capacity to reduce short-term borrowings. They are well-positioned heading into the fourth quarter with over $1.2 billion in available liquidity and approximately $1 billion in cash flow anticipated over the next twelve months.

Tailwinds

  • Continued focus on deposit gathering resulted in strong growth during the third quarter of 5.6%.
  • Retail, commercial, and Banking-as-a-Service lines of business all contributed to nonpublic deposit growth.
  • BaaS deposits totaled approximately $77 million as the company continues to gain momentum with fintech clients.
  • Hundreds of new customers were welcomed to Five Star Bank as a result of a new marketing campaign.
  • The company reduced short term borrowings by $304 million during the quarter, supporting margin stability moving forward.

Headwinds

  • Loan growth was softer in the third quarter, with commercial mortgage demand slowing due to economic conditions and higher pricing hurdles.
  • Funding costs continued to pressure net interest margin in the third quarter.
  • Noninterest income was down $980 thousand, or 8.5%, from the second quarter of 2023.
  • The pace of compression continues to moderate.
  • Shareholders’ equity has been negatively impacted since 2022 by an increase in accumulated other comprehensive loss associated with unrealized losses in the available for sale securities portfolio.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.8%

Avg return

Earnings day

+2.4%

Avg return

5 days after

+2.7%

Avg return

30 days after

64%

42 / 66 earnings

Positive

+12.3%

Q3 2020

Best reaction

-15.4%

Q1 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.5%-0.4%+3.5%
Q4 2025+0.2%+5.6%-4.7%
Q3 2025+9.4%+9.2%+11.3%
Q2 2025-2.3%-1.7%+2.5%
Q1 2025+5.8%+8.9%+6.9%
Q4 2024-2.9%+0.4%-15.2%
Q3 2024-6.2%-4.4%+8.9%
Q2 2024+8.6%+16.1%+9.2%
Q1 2024-1.0%-3.1%+1.2%
Q4 2023-6.7%-5.2%-18.3%
Q3 2023+0.0%+1.9%+14.9%
Q2 2023+9.4%+5.7%-2.4%
Q1 2023+0.4%-0.3%-4.4%
Q4 2022+2.3%+6.0%+3.5%
Q3 2022-1.0%-7.7%-3.0%
Q2 2022-0.5%-2.1%-0.7%
Q1 2022-1.1%-2.2%-2.0%
Q4 2021+1.9%+1.7%+0.5%
Q3 2021+2.4%+3.4%-0.3%
Q2 2021+0.7%+4.1%+10.1%
Q1 2021+5.4%+9.9%+8.2%
Q4 2020+1.2%+10.7%+21.0%
Q3 2020+12.3%+19.1%+32.1%
Q2 2020+4.5%+6.3%+17.3%
Q1 2020-15.4%-18.6%-14.2%
Q4 2019+2.4%+1.8%-10.6%
Q3 2019+3.1%+3.3%+5.8%
Q2 2019+4.2%+3.0%-1.4%
Q1 2019+0.6%+2.9%-3.5%
Q4 2018+0.4%+1.4%+11.1%
Q3 2018+4.1%+8.1%+9.6%
Q2 2018-0.9%-2.9%+0.3%
Q1 2018+0.3%+0.2%+2.5%
Q4 2017+2.3%+3.4%-0.2%
Q3 2017+4.2%+9.5%+6.8%
Q2 2017-2.6%-2.8%-9.4%
Q1 2017-1.9%-3.2%-10.0%
Q4 2016+3.2%+5.3%+8.3%
Q3 2016+2.4%+2.9%+16.1%
Q2 2016+0.3%-0.1%-1.7%
Q1 2016+3.0%
Q4 2015+0.4%
Q3 2015+2.4%
Q2 2015-0.8%
Q1 2015+2.7%
Q4 2014-1.4%
Q3 2014-0.9%
Q2 2014-3.8%
Q1 2014-0.5%
Q4 2013+1.1%
Q3 2013+3.8%
Q2 2013+0.3%
Q1 2013-2.3%
Q4 2012-0.2%
Q3 2012-2.8%
Q2 2012+0.9%
Q1 2011+0.6%
Q1 2012+4.3%
Q4 2010+1.7%
Q4 2009+1.7%
Q4 2011+1.7%
Q3 2010-4.4%
Q3 2011-4.4%
Q2 2011+1.6%
Q2 2010+1.6%
Q1 2010-1.9%

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