Five Star Bank’s parent company reported an 17 percent increase in its first-quarter net income from a year ago, to $7.2 million.
Warsaw-based Financial Institutions’ earnings per share increased 19 percent from a year ago, to 50 cents.
“We are building on the momentum of our solid performance last year,” said Martin K. Birmingham, president and chief executive officer of Financial Institutions, in a statement. “This is a strong start to 2014 and reinforces our confidence in the outlook for Five Star Bank.”
The bank’s net interest income from making loans and taking deposits was $23.3 million, an increase of about 2 percent from a year ago.
Kevin B. Klotzbach, executive vice president and chief financial officer, said the low interest rate environment continues to create lower net interest margins in the industry since the 2008 financial crisis. “Despite lower margins, we’ve been successful at increasing net interest income through growth in earning assets and the leveraging of our balance sheet.” The bank’s net interest rate margin, or profit margin on lending, was 3.52 percent in the first quarter, compared to 3.73 percent a year ago.
The bank’s non-interest income was down slightly to $6.4 million in the first quarter from a year ago. Last year’s total included a much higher net gain on securities.
Financial Institutions’ total loans were up about 8 percent from a year ago, despite a 13 percent drop-off in residential mortgages.