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Sep 30, 2023
Financial Institutions Q3 2023 Earnings Report
Financial results for the third quarter of 2023 were announced.
Key Takeaways
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.
Revenue by Segment
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.
Positive Outlook
- 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.
Challenges Ahead
- 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.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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