Financial Institutions reported a 12 percent increase in net income in the first quarter, as bank officials played up the results in the face of a proxy challenge to gain board seats.
The Warsaw-based parent company of Five Star Bank recorded net income of $7.6 million, compared with $6.8 million a year ago. “I think we’re making great progress against our strategies and our plans,” said Martin K. Birmingham, the bank’s president and CEO.
The bank’s net interest income from making loans and taking deposits rose by 7 percent from a year ago, to $24.7 million. Its non-interest income – including from sources such as the Amherst-based insurance agency Scott Danahy Naylon and Courier Capital Corp., which has offices in Buffalo and Jamestown – was $9.2 million, up by 11 percent from the year before.
Birmingham said of those two acquisitions: “It’s been a positive impact, and we’re experiencing growth year over year, certainly consistent with our plans.”
Kevin B. Klotzbach, the bank’s chief financial officer, said 98.6 percent of Courier customers surveyed have indicated they would remain with Courier under the new ownership. “We’re very encouraged by that,” he said.
The bank is facing a proxy fight. Two candidates were nominated for board seats by an affiliate of Texas-based Clover Partners. Four board seats are up for election at the bank’s annual meeting in June.
Financial Institutions said that it spent $360,000 on professional services in the quarter to “respond to the demands of an activist shareholder,” out of $1.4 million that it spent on that category altogether.
Birmingham said the bank is already seeing some impact from the planned KeyCorp deal for First Niagara Financial Group, even though that purchase is not yet complete. “We are seeing our fair share of that effect across an array of activities: consumer and commercial customers, as well as talent that is becoming available in the marketplace,” he said. “And we are engaged and focused in on trying to assure that we take advantage of those opportunities.”