Profile: Financial Institutions Inc (FISI.O)
31 Jul 2015
Financial Institutions, Inc. (FII), incorporated on September 15, 1931, is a financial holding company. The Company provides an array of deposit, lending, insurance services and other financial services to individuals, municipalities and businesses in Western and Central New York through its wholly owned New York chartered banking subsidiary, Five Star Bank (the Bank). The Company operates through two segments: banking and insurance. The banking segment includes all of the Company's retail and commercial banking operations. The insurance segment includes the activities of Scott Danahy Naylon, LLC (SDN), a full service insurance agency that provides a range of insurance services to both personal and business clients.
The Company's indirect lending network includes relationships with franchised automobile dealers in Western and Central New York, the Capital District of New York and Northern Pennsylvania. FII provides a range of consumer and commercial banking and financial services to individuals, municipalities and businesses through a network of over 50 offices and a network of automated teller machines (ATMs) throughout Western and Central New York. The region includes the counties of Allegany, Cattaraugus, Cayuga, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Ontario, Orleans, Schuyler, Seneca, Steuben, Wyoming and Yates counties.
The Company offers a range of loans, including commercial business and revolving lines of credit, commercial mortgages, equipment loans, residential mortgage loans and home equity loans and lines of credit, home improvement loans, automobile loans and personal loans. The Company originates commercial business loans in its primary market areas and underwrites them based on the borrower's ability to service the loan from operating income. FII offers a range of commercial lending products, including term loans and lines of credit. Short and medium-term commercial loans, primarily collateralized, are made available to businesses for working capital (including inventory and receivables), business expansion (including acquisition of real estate, expansion and improvements) and the purchase of equipment. Commercial business loans are offered to the agricultural industry for short-term crop production, farm equipment and livestock financing.
The Company offers commercial mortgage loans to finance the purchase of real property, which generally consists of real estate with completed structures and, to a smaller extent, agricultural real estate financing. The Company originates fixed and variable rate one-to-four-family residential mortgages collateralized by owner-occupied properties located in its market areas. It offers a variety of real estate loan products, which are amortized over periods of up to 30 years. The Company offers a variety of loan products to its consumer customers, including home equity loans and lines of credit, automobile loans, secured installment loans and various other types of secured and unsecured personal loans. The Company also originates consumer automobile loans, recreational vehicle loans, boat loans, home improvement loans, closed-end home equity loans, home equity lines of credit, personal loans (collateralized and uncollateralized) and deposit account collateralized loans.
As of December 31, 2014, $261.4 million, or 68%, of its home equity portfolio was at fixed rates, while $125.2 million, or 32%, was at variable rates. Approximately 80% of the loans in its home equity portfolio are first lien positions at December 31, 2014. The other consumer portfolio totaled $21.1 million as of December 31, 2014, all but $1.0 million of which were fixed rate loans. As of December 31, 2014, the Company's total loans were $1.91 billion and residential mortgage loans were $100.1 million. As of December 31, 2014, the home equity portfolio consists of both lines of credit and loans. Home equities amounted to $386.6 million. As of December 31, 2014, FII's loans held for sale consisted of residential real estate mortgages and totaled $755 thousand.
As of December 31, 2014, the Company's composition of the securities available-for-sale and securities held to maturity security portfolios included the United States treasury securities; the United States Government agencies, which are securities issued by official Federal government bodies and the United States government sponsored enterprises; mortgage-backed securities; Investment grade municipal securities, including revenue, tax and bond anticipation notes, statutory installment notes and general obligation bonds; Certain creditworthy un-rated securities issued by municipalities; Certificates of deposit; Equity securities at the holding company level, and Limited partnership investments. As of December 31, 2014, its available for sale (AFS) investment securities portfolio totaled $622.5 million.
Sources of Funds
The Company's primary sources of funds are deposits, borrowed funds, scheduled amortization and prepayments of principal from loans and mortgage-backed securities, maturities and calls of investment securities and funds provided by operations. It maintains a range of deposit products and accounts to meet the needs of the residents and businesses. FII's products include an array of checking and savings account programs for individuals and small businesses, such as money market accounts, certificates of deposit, sweep investment capabilities, as well as Individual Retirement Accounts and other plan accounts. It has access to a variety of borrowing sources and use both short-term and long-term borrowings.
As of December 31, 2014, the Company's total deposits were $2.45 billion and its Certificates of deposit were approximately 24% of total deposits. As of December 31, 2014, the Company's non-public deposits represented 75% of total deposits and totaled $1.84 billion. It had no traditional brokered deposits at December 31, 2014. As of December 31, 2014, the Company's Reciprocal Certificate of Deposit Account Registry Service (CDARS) deposits and ICS deposits totaled $79.7 million and $67.1 million, respectively. It offers a variety of public (municipal) deposit products to towns, villages, counties and school districts within its market. As of December 31, 2014, FII's total public deposits were $607.5 million or 25% of total deposits. Its short-term Federal Home Loan Bank (FHLB) borrowings at December 31, 2014 consisted of $129.0 million in overnight borrowings and $166.3 million in short-term advances.
Financial Institutions Inc
220 Liberty St
WARSAW NY 14569-1465