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Bank's profit takes hit from acquisition, CEO retirement

Rochester Business Journal
October 25, 2012

Shares of Financial Institutions Inc. climbed nearly 2 percent by Thursday afternoon after the bank reported quarterly net income of nearly $3.9 million, a decline of 24 percent from a year ago.

The Warsaw, Wyoming County-based bank had earnings of 28 cents a diluted share, down from 37 cents a year ago. It announced its results after the markets closed Wednesday.

The bank’s income attributable to common shareholders for the third quarter of 2011 was $5.1 million, or 37 cents per diluted share.

The performance of the parent of Five Star Bank was affected pre-tax costs of $2.6 million, or 12 cents a share, related to the retirement of former President and CEO Peter Humphrey.

The company also incurred pre-tax costs of $1.9 million, or 9 cents a share, related to the acquisition and conversion of HSBC Bank USA N.A. and First Niagara Bank N.A. branches.

Net income, excluding the special charges net of tax, was $6.8 million, or 50 cents a share, available to common shareholders. Analysts projected earnings per share of 45 cents. Street estimates typically exclude special items.

“We are making steady progress in the implementation of our strategy for increasing our regional presence and strengthening the company’s financial position,” interim CEO John Benjamin said in a statement. “We have made meaningful strides in improving operations and the quality of our portfolio, while maintaining a strong capital position and continuing to increase shareholder value.

“We are very pleased with our margin stability, exceptional loan growth and the relatively low-risk profile of our balance sheet. With proper execution of our business plan, we believe that Financial Institutions has a promising future.”

Shares (NasdaqGS: FISI) were trading at 2:30 p.m. at $18.42, up from Wednesday’s close of $18.12.

(c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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